Eight Crossings, a company providing outsourced support services, faced pressure to reduce employee pay due to competition and advancements in technology while maintaining quality. CEO Patrick Maher decided to cut employee pay by 5% but maintained open communication through email, which allowed for continued retention of a high-quality workforce despite concerns about attracting new talent. The company's previous pay structure, which included bonuses based on job complexity, was more aligned with its objectives than the current structure after the pay reduction.

1. CASE STUDY:
CHANGING THE PAY
LEVEL AT EIGHT
CROSSINGS

2. Eight
Crossings?

3. Eight Crossings is a privately-held
company, active in business products
and services industry performs
especially offsite support services for
physicians, attorneys, and self-
publishing authors.

4. CEO : Patrick Maher
Founded : 2001
Location : Sacramento, California
Service : Provide quality outsourced support
for administrative communications, such as managing
dictation/transcription, typing, editing, printing, phone
answering, and content research.
Employees : 85 transcribers
Annual income: $20,000 to $70,000

5. Issues of the Company

6. CHANGING THE PAY LEVEL ?

7. The Pay:
• 5% above the average of the
industry.
• Pay was according to the number of
lines per text, hours worked and how
complex the task was.

8. • Clients’ pressure to Patrick Maher to
reduce the fees because of the company
competition.
• Improvement in Voice Recognition
Software.
• Maher cannot cut the costs in overhead
and materials because it is already in
minimum costs.
• Nearly all it is costs are related to labor.

9. But….
Cutting fees meant cutting
payroll or stop earning a
profit.

10. Maher…
However,
continue
paying at the
same rate
Considered
about
Boilerplate Text
Decided to cut
pay by 5%
Communicate
with the
employees in
22 locations
Choose to
communicate
electronically
by e-mail
Employees
expressed
understanding

11. Questions and Discussion

12. How did the change in pay level at
Eight Crossings affect the ability to
attract and retain a high-quality
workforce?

13. The change in pay level did not
affect the ability of the company to
retain the high-quality because…

14. The employees understood
the changes after CEO
Maher explained the
situation of why the pay
level had to be cut.
It still has some
advantages for
employees that would
be better rather than
move to other company.
Maher deciding to
stay committed to
his workforce in
the U.S.
He is still paying
the market rate
to the
employees.

15. However, the ability to attract
the high-quality workforce is
still to be determined.

16. Do you think the company’s
pay structure was better suited
to its objectives before or after
the reduction in the pay level?
Why?

17. The company’s pay structure was better
suited to its objectives before reduction
in the pay level because of…

19. Bonus gives more motivation
for the employees by pay
varied based the complexity of
the job to get more work done
by receiving on average 5%
bonus per assignment.
According to Reinforcement Theory,
it uses rewards and punishments
that follow a person’s behaviour as a
way to shape that individual’s future
behaviour.

20. How would you evaluate the company’s
method of communicating the change in
pay level? What improvements to that
process can you suggest?

21. From the way company method of
communicating, using email is correct
and effective because workers are
located in different places 22 locations.
But actually, it is not an advance way.

22. Suggestion
Companywide conference call or
conference meeting over the web.
A video of the CEO announcement
about the changing pay level.

23. Conclusion

24. Maher
ensures…
He already
found the
best way to
communicate
with all of the
employees
No
workers
were laid
off
No
workers
should
leave the
firm
They did not
need to use
outsourcing
to solve this
problem.
The
company
makes
profit

25. Thank you