Team F |
Compensation and Rewards |
Spring 2011 |
FastCat’s priority is to increase revenue and the new pay structure will accomplish that goal in the long run. The new, cost containment, policy rewards, among other things, behavior aligned with FastCat’s objectives. This in turn will increase revenue, innovation, and customer satisfaction. This new system will need to be assessed over time to make improvements.
Choosing a multiple job structure with a person-based pay will allow FastCat to utilize a hybrid structure. We have decided to lead with pay in the more critical jobs and match with the remainder jobs which include low skill or are entry level ...view middle of the document...
Our green circle employees deviated from our expected structure and JE points needed to be adjusted. For example, Senior Fellow, one of FastCat’s most vital positions, was only valued at 285 initially; the position has been adjusted to 420 to reflect its importance and correct the implied deviant salary.
Individuals with positions that are highly valued at FastCat need to be rewarded (Appendix 3.1.1). Individuals in this position operate with the economic theory in mind and are expected to be the leaders and their decisions perpetuate FastCat’s success.
Red circle employees’ salaries were lowered accordingly. Upon evaluating the jobs, some were trivial; these positions have had salary deductions. For example, jobs that required only a high school diploma or an associate degree were being paid above the industry standard. More extensive cuts were made for underperformers or individuals with less seniority (Appendix 3.1).
Many red circle employees were from Grades 1 and 2. We ensured that entry level positions, and positions with ample qualified candidates were adjusted to reflect their importance to FastCat. These jobs are necessary, however, the individuals holding these positions were overpaid and we decided simply to match industry standards.
In the event that we lose too many employees, FastCat may consider hiring interns and/or using contingent workers. Another alternative is to combine job descriptions and tasks for some of the Grade 1 positions. This will control future costs as these workers would not be eligible for merit and bonuses.
FastCat reputation and size will encourage some employees to stay; however, turnover from these decisions is inevitable. With increasing revenue and saving costs as goals, it is important to remember that there is several qualified candidates external job market. For the employees who remain, a team oriented culture needs to be instilled; this will be difficult as moral may be lowered when employees see their friends and coworkers attrite. To offset this, we have designed a merit and bonus plan.
The merit pay will increase FastCat expenses; however, it will be worth the cost as the employees who received pay increases will receive raises based on merit. Only 68% of FastCat’s employees will receive merit pay; that is a $28,769 increase. Providing bonuses for workers, who perform their jobs effectively, according to measurable criteria, should increase overall performance within FastCat.
According to the original merit plan, the rating system used valid and valuable criteria but the uneven distribution suggested its extreme leniency. Over 68% of the employees exceeded expectations (Appendix 3.2.1 – 3.2.2). To correct this, FastCat should implement a 360 degree feedback program. This will not only encourage teamwork, but it will give employees clarity and challenge them to improve. This directly supports FastCat’s goals of controlling costs, increasing revenue, and creating a team...