FASTCAT
Compensation Plan
Happy Employees…Make Happy Customers!
Submitted by:
Ethan Becker-Menditto
Amie Brady
Chao-Ching Lien
Ulises Mariona
Carl Pitt
3/10/2013
Table of Contents
EXECUTIVE SUMMARY .........................................................................................................................................2
BUSINESS STRATEGY .............................................................................................................................................3
COMPENSATION STRATEGY ...............................................................................................................................3
INNOVATION ..............................................................................................................................................................3
COMPENSATION OBJECTIVES .....................................................................................................................................4
POLICY RECOMMENDATIONS ............................................................................................................................5
FLAT STRUCTURE ......................................................................................................................................................5
JOB-BASED PLAN .......................................................................................................................................................5
MULTIPLE PLANS .......................................................................................................................................................6
SINGLE PLAN .............................................................................................................................................................6
SAMPLE OF STRUCTURE .............................................................................................................................................7
MANUAL .....................................................................................................................................................................8
COMPENSABLE FACTORS ....................................................................................................................................9
BLANK SAMPLE ..................................................................................................................................................... 14
USE OF THE BLANK SAMPLE .................................................................................................................................... 15
THE PLAN ................................................................................................................................................................. 16
IMPLEMENTATION .................................................................................................................................................... 16
COMPETITIVE ADVANTAGE...................................................................................................................................... 17
DIRECTION OF THE COMPANY .................................................................................................................................. 17
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Executive Summary:
Fab 5 Consulting, Inc. has devised a plan, a compensation system that supports FastCat’s
business strategy, values, and other Human Resource (HR) systems. It promotes productivity
because it compensates employees based on their knowledge, skills, and performance in the
workplace. Implementing multiple plans will allow the company to meet all of the compensation
objectives. For that reason, we recommend a Job-Based plan as well as a online promotional
plan. Pursuing a loose strategy will allow flexibility within the organization. Furthermore, we
recommend pursuing a flat structure to complement the previous recommendation and to
promote teamwork and collaboration. We have constructed a manual to evaluate the value of
each job and to help determine the pay for each position. We chose the five most important
compensable factors driven to meet the company’s goals while creating rewards and incentives
for employees to promote desired behavior. The five compensable factors will be weighed as
follows: Education/Experience (20%), Innovativeness (20%), Teamwork (20%), Technical
Requirements (20%), and Responsibility Requirements (20%). Upon acceptance of proposal,
implementation will begin at the staff conference held at a later date. Further details about the
points highlighted in this summary are included in the following sections.
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Business Strategy:
Fab 5 Consulting, Inc. has constructed a compensation plan to increase employee satisfaction,
create incentives, and maintain cohesion through collaboration within the workplace with the
appropriate plan set forth. In congruence with innovative technology, superb communication,
and a motivated workforce, this company will be able to compete efficiently and effectively.
With that is mind, we recommend using a differentiation strategy. This strategy will promote the
highest levels of: education/experience, innovation, responsibility, technical knowledge, and
teamwork in the workplace.
Compensation Strategy:
It is our goal to add more value to the organization by attracting and motivating employees at all
levels. It is extremely important that this compensation strategy is based on internal alignment
throughout the entire organization because it will create cohesion and create incentives for
FastCat employees to strive to do their best. It is our plan to promote productivity by rewarding
employees based on their knowledge, skills, and abilities (KSAS) performed at the
workplace. This will inspire a rapid innovation of workers, the key to this organization’s
success, which will enable the company to continue to compete effectively within the healthcare
industry and retain its employees as well.
Innovation:
Innovation is one of the top compensable factors for FastCat because it is pivotal for the
company to drill deeper with its existing clients and attract new clients. FastCat values its
employees and understands that they are like the bread and butter of the organization. Engineers
that can come up with better and unique products can help them satisfy their customers base and
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expand as they hope, surpassing their already great reputation. Further, interdepartmental
relationships are also significant; therefore, teamwork will be another important factor that is
stressed. It is imperative that the engineers and the marketing department work well together to
minimize problems and better serve the clients’ needs, especially since the right products must
be produced for the right target market. Both of these factors are congruent with the strategies,
work, and values of the company. They are also consistent with the recommended objectives.
Compensation Objectives:
1. We plan to emphasize the importance of innovating high quality products to satisfy current
and potential client base to maintain reputation. We will achieve this by rewarding performances
proven to commit to its customers with high-value software on time and on budget.
2. Attract, retain, and motivate top talent. We will achieve this by maintaining the corporate
culture and values throughout the organization. Additionally, we will promote from within the
company before hiring outside parties to maintain unity.
3. Highlight a direct relationship of pay to personal, team, and FastCat‘s performance. We plan
to achieve this through recognition of performance excellence and learning achievements.
4. Promote internal equity. We plan to achieve this by widely communicating the organization’s
compensation practices so that they are clearly understood. Consultation and online material will
be available, if necessary.
5. We aim to cut fixed and variable costs by identifying different levels of responsibility and
accountability and adjusting costs accordingly.
4
Policy Recommendations:
We recommend pursuing a loose strategy for many reasons. First, a loose strategy will allow
flexibility within the company. Due to the need to be innovative and pursue new upcoming
products and services, this is vital to the growth of the company. Second, a loose strategy will
allow the company to develop new objectives and adjust the proposed plan as the organization
may change over time. In contrast, pursuing a tailored and tight strategy would limit the
company because it would deter empowerment because employees would be unable to make
decisions as they feel necessary. In turn, this would also limit an employee’s innovativeness.
Further, a tightly tailored strategy would give more precise instruction of what, how, and when to
do things; systematic directions are not conducive to the innovative and expansive business
strategy of FastCat. Innovation requires out of the box thinking and at times risk-taking, so a
loose strategy aligns best with FastCat’s current business strategy.
Flat Structure:
We recommend pursuing a flat structure because it supports fewer levels, equal treatment, teams,
and cooperation. All of these factors are important for a company that pursues innovative
projects. Additionally, this will reduce the levels of management employees must go through to
get an answer in regards to moving forward with projects and decisions and/or time sensitive
activities. A flat structure also complements our previous decision for choosing a loosely
tailored structure as well.
Job-Based Plan:
The process that we chose is the job-based plan, plus an innovative online promotional plan. We
chose this because we felt that this specific plan would help the company cut costs since it allows
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the company to pay for the specific jobs, rather than the person. Additionally, this will promote
fairness among the employees and enable the company to pursue its organizational strategies
simultaneously.
Multiple Plans:
There is some relevance in the jobs but also differences; therefore, we recommend implementing
multiple plans instead of a single plan. Multiple plans support the current strategy and will allow
the company to be more responsive to changes that FastCat is experiencing. The purpose is to
support and align the organizational goals. At FastCat, different job families in the organization
will have different motivational factors. For that reasons, by having multiple plans FastCat can
evaluate each job and motivate each employee in different ways based on their job descriptions.
Single Plan:
We considered implementing a single plan at first. However, we determined that a single plan
would limit motivation and group jobs together that should not be grouped. Although the
organization has some breadth of work… tasks and duties still vary. Additionally, single plans
do not make distinctions between job and responsibilities. As a result, this would limit FastCat
employees from acquiring new skills and wrongly discourage innovation.
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Sample of Structure:
Engineering Marketing Administrative Technical
Project Leader
230 pts
Client Account
Leader
230 pts
Senior Fellow
230 pts
Senior Quality
Assurance
Technician
220 pts
Software Developer
200 pts
Graphics Designer
200 pts
Visionary Champion
210 pts
Quality Assurance
Analyst A
150 pts
Software User Interface
Architect
190 pts
Software Solutions
Consultant
160 pts
Administrative Leader
160 pts
Quality Assurance
Analyst
140 pts
Usability Engineer
180 pts
Marketing Service
Representative
140 pts
Green Guru
130 pts
Implementation
Consultant
110 pts
User Interface Designer
170 pts
Marketing Support
100 pts
Administrative Assistant II
110 pts
Technician
90 pts
Training Assistant
110 pts
Administrative Aide
90 pts
Project Support Assistant
80 pts
Travel Coordinator
70 pts
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Manual:
1. Conduct Job Analysis: Top Management will be responsible for collecting and comparing
information for each position in regards to the job content for the specific jobs in their
departments to implement to current plan.
2. Determine Compensable Factors: To complement our strategic goals/ compensation
strategy, we are implementing that the competency sets will be innovation, technical knowledge,
education/ experience, team orientation, and most importantly responsibility.
3. Determine Scale & Weights of Factors: Each competency set will be worth twenty-percent
out of one-hundred percent. Further, the point value associated will each degree (1-5) will be 10,
20, 30, 40, and 50, respectively.
4. Communicate Plan & Train Users: We will use the manual to help guide the process of
implementation and to communicate our rationale for the pay levels of each position. Then,
additional materials (Powerpoints and reference guide, etc.) will be distributed to each employee
and will also be available online to increase the understanding of this plan. Lastly, each
employee may request additional information, materials, or training, if necessary.
5. Evaluate Effectiveness of Plan: We will conduct an employee survey of understanding,
procedural justice, and outcome justice of the compensation plan. We will also actively
communicate with the head of each department and gather feedback at all levels of the
organization. Further, we plan to explain the process for resolving disputes and appeals as well.
This plan is simple and easy to implement, which will also allow flexibility to make any
necessary changes for future changes within the organization.
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Compensable Factors:
(20%) – Innovativeness Requirement refers to the self-motivation that the employee distributes
to work.
Degree
Innovativeness Requirements
1
Employee performs routine tasks with limit or no innovation required.
2
Employee performs required work with knowledge of the organizational process,
but with limited innovation needed to perform job duties.
3
Employee possesses critical thinking skills, such as the ability to understand theories
that are more complex and the ability to assess, evaluate, and implement theories
and processes. Employees are actively involved in tasks that require moderate levels
of innovation.
4
Employee abilities include challenging assumptions and effectively communicate
advanced work process throughout the organizations. Must demonstrate high levels
of critical thinking/reasoning and innovation is frequently used.
5
Employee demonstrates leadership qualities in regards to innovation, has the ability
to identify and solve current and potential problems that arise. Must possess superior
critical thinking/reasoning skills and demonstrate leadership qualities. Innovation is
essential and used multiple times throughout the day.
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(20%) – Education/Experience refers to the quality that the employees familiar with the job
offered as well the experience that the employee posses for the position.
Degree
Education/ Experience Requirements
1
High School Diploma/ GED, Minimal Related Experience
2
Associate’s Degree 1-3 Years of Experience
3
Bachelor’s Degree w/ 1-3 Years of Experience
4
Bachelor’s Degree w/ 4-7 Years of Experience
5
Master’s Degree or Bachelor’s Degree w/ 8+ Years of Experience in computer
science, business, or related field
10
(20%) – Team Work Requirement refers to the ability to perform in a work-related team
Degree
Team Work Requirements
1
no requirement to perform in a team
2
ability to perform in a team with collaboration
3
ability to lead a team and assist to other team members
4
ability to lead a team and assist to other teams
5
ability to lead and control multiple teams in the organization
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(20%) – Technical Requirement refers to the ability to work on specific technologies in order
to perform the work.
Degree
Technical Requirements
1
Proficiency with MS software such as Word, Excel and Power Point
2
Advance use of MS software plus the ability to function web components.
3
Advanced functioning in wed components plus solving technical issues
4
Advanced using in existing technologies to conduct the analysis and edit program
5
Create and maintain program while updating existing program
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(20%) – Responsibility Requirement refers to the responsibility scale that the nature of job
provides to the employees
Degree
Responsibility Requirements
1
Operation level that reports directly to one manager
2
Operation level that reports to multiple managers as needed
3
Lower managerial level that assist to the operation in a proficiency way
4
Middle managerial level that operates one function while supporting other functions
of work
5
Upper managerial level that making decisions and strategy of the organization
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Blank Sample:
Job Title:
Competency Set Weight Degree 1 Degree 2 Degree 3 Degree 4 Degree 5
Education
Experience
20%
10 pts
20 pts
30 pts
40 pts
50 pts
Innovation
20%
10 pts
20 pts
30 pts
40 pts
50 pts
Knowledge
20%
10 pts
20 pts
30 pts
40 pts
50 pts
Team Work
20%
10 pts
20 pts
30 pts
40 pts
50 pts
Responsibility
20%
10 pts
20 pts
30 pts
40 pts
50 pts
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Total
( W * D)
Use of the Blank Sample:
To align with our new compensation structure with organization strategy, FastCat should first
determine the essential job functions before implementing the job-based pay system. Despite the
old structure, new compensation will be the base pay, plus a bonus. Different functions will
have different market-driven base pay with related innovation bonus to those innovated
employees. Each function will have the innovation bonus in two ways. First, the innovation
check will attach onto its job performance routinely. An increasing of the innovation point will
direct add to its rewarding paycheck. In addition, the innovation bonus that encouraged for
functions. For example, the technical function will have its considered base pay plus the
innovation bonus on qualified problem-solving excellence, while administrative function will
reward the employees on process-solving excellence. On the other side, marketing functions will
reward to the successful marketing campaign by highly retaining on the brand loyalty.
Engineering function will establish its bonus on program-development excellence. The
evaluation is open to managerial level for further encouraging action. Taking consideration of
non-asset reward, FastCat will recruit internally to satisfy the position needed in time. Further,
the managerial job offering will be considered internally as one of the non-asset bonuses prior
open to the market. All other non-asset bonuses may reply through announcement.
Appeals Process:
The appeal process will apply when employees have any concern or question about the reward.
File the necessary documentations directly to the managerial level is required. Base on the
materials provided, the manager has the responsibility to either answer the concern in detail or
report to the HR department for more details. To avoid the play of favoritism, employee
deserves to file the second-time concern direct to HR department. For those who filed the
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concern to HR, HR has the authority to classify the investigation. Also, the false concerns will be
added to job performance. Employees who file a claim directly to any other authority before
filing to manager will also result a mark on job performance. All appeal process has to follow as
listed above. There is no exception.
The Plan:
Our decisions will help FastCat to generate solutions for its customers because it allows our
employees to think creatively and innovatively to figure out solutions for consumer demands.
They will help us compete in the market because we are stressing the importance of high-quality
operations and services. We are letting our employees be creative and come up with new ways
to make our product and services better. This helps to motivate our employees to want to be
better and adds value to our organization. Our plan also aims to cut costs and expenses, which
allows re-invest more money in the innovation of our software systems and foundation. This
plan signals our company’s values because it stresses employee rewards and incentives based on
innovation and teamwork.
Implementation:
This plan will be administered via staff conference at a date to be determined. There will also be
an email sent out about the upcoming plan. Management and HR will also be available to field
any questions or concerns about the plan. This plan will be maintained over time by monthly
employee performance reviews with thoughtful recommendations for any employee
improvement that may be needed. This plan is able to handle new jobs as they are created. We
will gain an understanding of the plan by highlighting the goals of FastCat and how each
employee is needed for the company to be successful. We will gain acceptance by creating a
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sense of value and fairness in our plan in the eyes of our employees. Managers should consider
our recommendations because they can help motivate employees to put more effort into their
work and improves productivity. This plan provides fair incentives to employees that entice
them to think creatively and bring their own personal thoughts to the table.
Competitive Advantage:
It is our intention to promote long-term relationships and an outstanding rapport with clients and
customers, not only in excellence of service/innovative technologies, but by rewarding the
desired skills and performance. With that in mind, we recommend focusing on the triple-bottom
line. This is extremely important when considering the rapid increase in technology and intense
competition. For these reasons, we feel that focusing on a increasing employee satisfaction is the
upmost importance and will also result in having a satisfied customer base. Hence, Happy
employees make happy customers.
Direction of the Company:
We feel that ease of administration could be a potential issue of this new plan. It could be hard
to get employees to understand that they are being evaluated based on innovation and teamwork
requirements. However, to mitigate this problem, we have HR representatives that employees
can go to with further questions about this new plan. Managers will also able to be available to
discuss the specifics about performance evaluations and potential improvements. Further,
employees may also seek answers online at their own convenience. Based on our
recommendations, we believe that FastCat will be able to deliver exceptional products and
services to its clients and customers, while empowering its employees with a competitive, yet
affordable compensation plans.
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