Compensation Analysis

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A compensation program I designed for a theoretical company

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Compensation Analysis

  1. 1. A ne b g w e inning
  2. 2. Fast Cat Executive Summary Thec ng stothec m e a n s te y a d s ne to ha e o p ns tio tra g re e ig d :  Enc ura einno tio a e a io toinc a ere nue o g va n nd xp ns n re s ve s  He s p rt a info e p ye s lp up o nd rm m lo e  Inc a ee p ye s ns o c m itm nt re s m lo e e e f o m e  Inc a etheva c to e p o thefirma itsp d ts re s lue us m rs ut n nd ro uc  Be o einc a ing c m e cm re s ly o p titivetoo r firm in thes m ind try the s a e us  Enha ec to e fo us nc us m r c  Re p c a re o nizee o ina e p ye p rfo a e s e t nd c g xtra rd ry m lo e e rm nc
  3. 3. Ma As um tio Theinte l s tureo thefirmc m unic te in s p n: rna truc f o m a s w ts ha killsa va d b thefirma linkingtho ea ilitie tothe re lue y nd s b s firm sc nt a futureg a . ’ urre nd o ls
  4. 4. Internal Structure  I re o m nd tha thec m a m inta afle leinte l s tureto cm e t o p ny a ins xib rna truc a wthee p ye sro mto p rtic a in s ve l d re p g m a llo m lo e o a ip te e ra iffe nt ro ra s nd p je ts To d thisI s g s thre jo fa ilie : Sup o ro c . o ug e t e b m s p rt/Ad inis tive m tra , Sp c lis , a Ma g m nt. e ia ts nd na e e    inte l s tures uld b lo s ly c up d w a e a ria p y. The rna truc ho e o e o le ith n g lita n a
  5. 5. Job Based structure P cd ro e ure  Ma no und rs nd ho the a p id The fo ac m itte isne e s ry to he ny t e ta w y re a . re re o m e c sa lp w fa s a und rs nd o thes te y. ith irne s nd e ta ing f tra g Sing vs Multi P n fo Eva tio le . la r lua n  Eve nes uldb invo din theinte re tio c to e ne d a fe d a k ryo ho e lve rp ta n us m r e s nd e b c the fo w ne d littleb rrie tothe ec ns e inte c ns re re e e a rs s o um r ra tio .  Ma in afluids tures e p ye sc n w a m ny “ ts b s ha the inta truc o m lo e a e r a ha ” ut till ve ir o n s e ia in a a a w p c lty n re .  
  6. 6. Alignment A lo s ly c up d inte l s tureha b e e o g d fo firm tha o e o le rna truc s e n nc ura e r s t:  Re uirec ns nt inno tio q o ta va n  Re uires rt d s n to m rke c letim s q ho e ig a t yc e  Ha a e s n nviro e tha isinc a ing c m e nm nt t re s ly o p titive  Ne d to s rt w rkingin te m e ta o a s  Ne d to s rt w m ny ne p je tsa a o e e s ta ith a w ro c ll t nc  W ha hig va nc in ho jo sa p rfo e ill ve h ria e w b re e rm d All o w h a c nt g a to s c thefutureo Fa t C t f hic re urre o ls e ure f s a
  7. 7. Structure Thes tureisd s ne to re o nizew t isa d va to Fa t C t : truc e ig d cg ha d ing lue s a  Ma g m nt- c a ss te icva a fa ilia w there uire na e e re te tra g lue nd m r ith q d p c d sa s ro e ure nd killsne e s ry to re c p je t g a c sa a h ro c o ls  Sp c lty- the“ wm te ls o thec m a The p s e ss e ia ra a ria ” f o p ny. y o s s killsand a ilitie to a d va to thec m a b ne d g a ea d c n fo b s d lue o p ny ut e s uid nc nd ire tio r s te ica p a n. tra g p lic tio  Ad inis tive m tra /Sup o c ns t m s o s p rt. Do sno a d s te ic p rt- o is o tly f up o e t d tra g va b he se ryo s c e . lue ut lp ve ne uc e d
  8. 8. Internal Structure
  9. 9. Sample Positions
  10. 10. Issues considered W w nt toc a are uta n a ac ic e p ye In a d n to o e a e a re te p tio s ho e m lo r. d itio p nly nd ho s c m unic tingtoo e p ye sw m t a o e ureo p c e a fa ne tly o m a ur m lo e e us ls ns ur ra tic s re ir. Thefo w c nc rnsw a a b a is uew n re va tingtheinte l llo ing o e ill lw ys e n s he -e lua rna s ture truc :  C a re tingag s c ilinge c w te hno g a s la s e ffe t ith c lo ic l killsvs inte e o l s . rp rs na kills  C a re tings la g p w g nd rsa (no ino g up . a ry a s ith e e nd n)m rity ro s  Currently w m n e rn m retha m n a Fa t C t. o e a o n e t s a  Currently No ino g up m m e e rn m retha m rity g up n-m rity ro e b rs a o n ino ro mm e . e b rs  
  11. 11. Ma As um tio Our g a c n b a hie dif thee p ye s in s p n: o ls a e c ve m lo e kno w t ise e te o the a w Thisc n b d new a w ha xp c d f m nd hy. a e o ith c ao le r utlineo c m e a lefa to a ne w thefirm sg a . f o p ns b c rs lig d ith ’ o ls
  12. 12. Management Goals Enc ura e o g:  Op n a ho s c m unic tio to e p ye s e nd ne t o m a ns m lo e  Sup o a re a te mw rk p rt nd w rd a o  Sup o ris ta rsa inno tiveid a p rt k ke nd va es  Sup o e p ye sin a a p c (p rs na a b ine s p rt m lo e ll s e ts e o l nd us s )  Sup o c m unic tio a o a h e rtsto c to e (d c rs p rt o m a ns nd utre c ffo us m rs o to a p tie ) nd a nts  
  13. 13. Job Evaluations
  14. 14. Sample Job Evaluation Calculation Total JE Degree =Weight x points Compensable Factor Weight (1-5) Degree = Sum of W*D Work Conditions •What kind of environment will the employee spend most of her time? •Who/what will the employee be interacting with 75% of the time? 1 200 200 865 •How stressful are these conditions to the employee? Skill •What kind of skill level is required for the employee to complete their tasks? 1 150 150 •How much experience/education is needed for the employee to succeed? •How often will the employee need to update their skill base? Effort How much effort is necessary for the employee to successfully go beyond firm goals and enhance Fast Cat’s competitiveness? 3 80 240 What is the magnitude of the consequences from passive activity to the firm’s strategic goals? Responsibility How much responsibility does the position entail? How many subordinates depend upon the positions responsiveness and support? 1 275 275 What is the magnitude of consequences from irresponsible actions on subordinates and the firm’s goals?
  15. 15. Ma As um tio P y isa oaw y to c m unic tew t thefirm in s p n: a ls a o m a ha va sa a tsa am tiva r fo inc a ingp rfo a e lue nd c s o to r re s e rm nc .
  16. 16. Pay Structure TheEg lita n P y Struc a ria a tureise o g d fo nc ura e r:  Firm tha w nt to fo te te mw rk a thea s p n istha e ua p y s t a s r a o nd s um tio t q l a w le d to e p ye s p rt a s tis c n ill a m lo e up o nd a fa tio  Allo e p ye sto b re p ns lefo b a e ra eo ta ksa m re w m lo e e s o ib r ro d r ng f s nd o fre d mfo ho to a c m lis the * eo r w co p h m  It a o ha b e re te to g a r p rfo a ew n c s c lla o tio a ls s e n la d re te e rm nc he lo e o b ra n nd s ringo kno le g isre uire . But w s w nt am s a etha ha f w de q d e till a es g t o a tio l va sind ua s rg niza na lue ivid l killsa c ntrib ns nd o utio .
  17. 17. Grades & Ranges  In a c rd nc w o o o g a to p m tefle ility, w ea fe e c o a e ith ne f ur o ls ro o xib id nd w r g d sa s g s d w la e p y ra e . ra e re ug e te ith rg r a ng s  It a o he sc m unic tethem s a etha a o o e p ye sa e ua ls lp o m a es g t ll f ur m lo e re q lly va d b p c m rejo sin thes m g d . lue , y la ing o b a e ra e
  18. 18. Ma As um tio Fa t C t m t c ntinuetoke p a e o the in s p n: s a us o e n ye n e rna m rke in o e toc ntinueto a c to ta nt, he xte l a t rd r o ttra t p le lp e o g c nt e p ye sto lo lly m inta p p r nc ura e urre m lo e ya a in ro e p rfo a ea re a c m e e rm nc nd m in o p titivein theind try. us
  19. 19. Competitor Snapshot
  20. 20. Market Pay  Thefo w g p s w thec nt m rke p y fo b nc a d J b llo ing ra h ho s urre a t a r e hm rke o Eva tio p ints Thethre b nd a o s g s d Ba sfo J b lua n o . e a s re ur ug e te nd r o e lua n p intsa itsto p y w va tio o nd a ithin them rke a t.
  21. 21. P lic 1 = 3 % a o m rke ra o y 0 b ve a t te P lic 2 3 % b lo m rke ra o y = 0 e w a t te
  22. 22. Market Pay Thefo w g p iss ila to thep vio . It: llo ing ra h im r re us  Om o s g s d b nd fo Fa t C t its ur ug e te a s r s a  Inc e thera ne J d tap intss g s d fo theFa t C t p s ns lud s w wE a o ug e te r s a o itio C ntly Fa t Ca is± 3 % thec nt m rke ra . urre s t 0 urre a t te
  23. 23. P lic 1 = 3 % a o m rke ra o y 0 b ve a t te P lic 2 3 % b lo m rke ra o y = 0 e w a t te
  24. 24. Fast Cat Pricing
  25. 25. Pay Snapshot of Fast Cat Employees*
  26. 26. Scorecard Re w vie : C ntly the a s ve l Is ue tha tro lingFa t C t. So eInc e urre re re e ra s s t ub s a m lud : 4. De re s re nueg w c a ing ve ro th 5. Inc a ingLa o C s re s b r o ts 6. De re s re nued to ne p d ts c a ing ve ue w ro uc 7. C to e uns tis dw Fa t C t re re e tive a p d ts us m rs a fie ith s a p s nta s nd ro uc 8. An inc a e ne d fo te m o a o e p ye s re s d e r a w rk m ng m lo e Thec ng sto thec m e a n s te y a d s ne to ha e o p ns tio tra g re e ig d : • Enc ura einno tio a e a io to inc a ere nue o g va n nd xp ns n re s ve s • He s p rt a info e p ye s lp up o nd rm m lo e • Inc a ee p ye s ns o c m itm nt re s m lo e e e f o m e • Inc a etheva c to e p o thefirma itsp d ts re s lue us m rs ut n nd ro uc • Be o einc a ing c m e cm re s ly o p titiveto o r firm in thes m ind try the s a e us • Enha ec to e fo us nc us m r c • Re p c a re o nizee o ina e p ye p rfo a e s e t nd c g xtra rd ry m lo e e rm nc The fo I ra d Fa t C t a fo w b c us the isro mfo m h im ro m nt. re re te s a s llo s e a e re o r uc p ve e
  27. 27. Considerations  Thec nt w ig s uld b fre ue urre e hts ho e q ntly a jus d to re c thec nt Fa t d te fle t urre s C t p rfo a ein re tio to o g a . Fo e m le Inno tio c ntly a e rm nc la n ur o ls r xa p , va n urre c rrie them s w ig b c us it d c e c theb tto lineo the a s o t e ht e a e ire tly ffe ts o m f cma o p ny.
  28. 28. Scorecard  If thes g s nsa im le e d thefo w s p s p w b the ug e tio re p m nte , llo ing na ho ill e futureo Fa t Ca a le d to b tte re ultsa c m a p rfo a e f s t nd a e r s nd o p ny e rm nc .
  29. 29. C a d b C s a raSa s re te y a s nd ile
  30. 30. Appendix 1: Job and Job number for the “Total Newly Assigned JE Points” Chart. Management 14 Senior Fellow 6 Green Guru 10 Project Manager 23 User Interface Architect 18 Software User Interface Architect 24 Visionary Champion 16 Software Developer 22 Usability Engineer 4 Client Account Leader 15 Sr Qual Assurance Tech Specialists 13 Quality Analyst A 17 Software Solutions Consultant 19 Technician 8 Marketing Services Rep 12 Quality Assurance Analyst 9 Marketing Support 5 Graphics Designer 7 Implementation Consultant 20 Training Assistant Administrative/Support 3 Office Leader 21 Travel Coordinator 1 Admin Aide 11 Project Support Assistant 2 Administrative Assistant II
  31. 31. Appendix 2: Job and employee number for the Fast Cat Charts Created by MS Access. Management 1,2 Senior Fellow n/a Green Guru 3 Project Manager n/a User Interface Architect 4,5 Software User Interface Architect n/a Visionary Champion 6,7 Software Developer 8,9 Usability Engineer 16, 17 Client Account Leader 10, 11 Sr Qual Assurance Tech Specialists 12, 13 Quality Analyst A 18, 19 Software Solutions Consultant 14, 15 Technician 20, 21 Marketing Services Rep n/a Quality Assurance Analyst 22, 23 Marketing Support n/a Graphics Designer n/a Implementation Consultant n/a Training Assistant Administrative/Support 24 Office Leader n/a Travel Coordinator 25 Admin Aide n/a Project Support Assistant n/a Administrative Assistant II

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