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Jamie Wiley
Ol-325 Total Rewards
Professor Victor Wang
September 11, 2016
A Brief History of Compensation
Compensation has been in existence since there have been workers and employers. There
has been an ongoing evolution of pay for services rendered that is constantly changing to adapt
to the new norms of society. Monetary compensation is an advancement of the barter system
where goods were traded for service for other goods. Currency became the norm to exchange for
services and this is the format that we use to today. It took a long time for society to come to a
set standard for standardization of pay for jobs performed. It wasn’t until 1923 when the Federal
Classification Act of 1923 was passed which ranked various government jobs and then
established set salary levels for them (Compensation Administration, n.d.). While the standards
exist for developed companies, there are emerging third world countries that pay rates vs. work
performed are still compensated inequitably. This is often exploited by companies seeking to cut
payroll expense by
Monetary compensation is the primary way in which compensation is distributed for
services. Often set hourly rates, or yearly salaries, are extended to employees of companies for
the work performed by that individual for that company. The concept of internal consistency
eventually emerged and it became the standard of most businesses to establish a set pay scale for
various comparable positions within their organizations. The goal of internal consistency is to

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rationalize pay within and organization to achieve internal equity and consistency
(Compensation Administration, n.d.).
There is a strong need for competitive compensation policies within organizations. A
solid compensation package allows for greater external competitiveness when recruiting and
retaining talent. This is a key component in any businesses success. If you have an excellent,
competitive, and attractive benefits and compensation plan you are more likely to attract the top
talent and keep strong performers. Consistency and competitiveness are extremely important to
the growth and stabilization of any business. This is the key reason so much importance is put on
pay scales and benefits. Perks and benefits may have changed overtime to fit in with current
social norms but the general ideas are long entrenched into our society. It is important to know
where we have come from, to better adapt and change and remain competitive in our
compensation offerings to achieve out highest goals.
Executive Summary
There is a great demand in the market for digital music content. The industry has seen a
shift from the traditional physical product sales dominating to be outsold by digital content.
There are several competitors currently in the market, each with their own advantages and
disadvantages that would need to be assessed before designing operating systems and
determining compatibility. Compatibility will be a key area to focus on. Working on a platform
that is easily accessible and able to be used not only domestically and internationally should be
of paramount concern. ITunes is one of the largest competitors in the market, however they have
one disadvantage, they are not compatible with other all other systems. This a deficit that E-sonic
can use to its advantage. Identifying the countries that should be looked at first for global

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expansion would be an important first step. The global marketplace for digital content is large
and each county has its unique opportunities for securing a portion of that revenue.
It will be imperative to establish corporate infrastructure and reporting relationships early
to assist with acquiring talent. There is a large amount of competition for the desired labor pool
not only form the digital music marketplace but also form crossover technical, marketing, and
creative fields. Human resources acquisition of key personal will rely on offering superior
compensation packages. There is great opportunity to expand and gain a significant foothold in
the digital music market, but there are many steps that are crucial to successful entry.
Strategic Analysis
In 2015 the global music market saw a shift in the industry when digital music sales
overtook physical music sales for the first time ever (IFPI Global Music Report 2016, n.d.).
Digital music sales now account for 45 per cent of total music revenues. This is in comparison to
the 39 per cent attributed to physical sales. The total industry revenues increased 3.2 per cent to
15 billion. The resulted in the music industry’s first significant year-on-year growth in nearly
two decades. Digital sales now account for more than half the recorded music market in 19
markets (IFPI Global Music Report 2016, n.d.). E-sonic and its competition fall into NAICS
code 454390 Music & Messaging Services Other Direct Selling Establishments
E-sonic has six main competitors in offering online music sales. The first is ITunes,
which is apples online music platform. ITunes has a library of 25 billion songs and is back by
strong brand loyalty to Apple. ITunes also has significant resources to maintain and improve
their streaming services and boasts the largest database of any of the competition (Top 6 Online
Music Stores to Buy MP3 Music, n.d.). Another competitor to E-sonic is Spotify. Spotify is an
up and coming player in the industry and requires a subscription payment for unlimited music

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streaming and boasts a regarded user interface. AmazonMP3 is another challenger in the market.
They are Amazon’s branch that offers music sales. AmazonMP3 offers songs at a low price and
has a library of more than 16 million songs (Top 6 Online Music Stores to Buy MP3 Music,
n.d.). With Amazons financial resources that they have available they are a serious rival.
Beats Music is another new arrival in the online music industry. They offer 20 million
songs in their database and no ads which is popular with the public. Beats music is also well
regarded for having ease of compatibility with many systems. Rhapsody and EMusic are the
final 2 competitors in the market. EMusic is primarily a specialty music purveyor and is more of
a niche market where Rhapsody, formally Napster, has a large database with 30 million songs
and is highly compatible with most systems (Top 6 Online Music Stores to Buy MP3 Music,
n.d.). ITunes is the strongest competitor in this market with the largest music database and
incredibly loyal band following.
Foreign demand is an increasing market with excellent earning potential. There are
currently nine emerging countries that are key to expanding and capitalizing on international
music sales. India is the first with a 1.2 billion population. There is the opportunity to not only
sell current us music content but to expand and offer Bollywood offerings as well (Knopper,
2015). Brazil is the next country with 100 million. Android and Google play have an advantage
in this market as all local smartphones have the android operating system (Knopper, 2015). This
would be a factor once system design and compatibility issues are addressed. Sweden has a large
music loving population and is the home country of Spotify (Knopper, 2015). This is a factor to
consider when entering this market. Brand loyalty may be a factor that works against new
competitors in the market. China is the third country with a booming demand for digital music
content. Expanding to China is problematic at best with its communist government and many

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restrictions. However, there is limited market competition and the largest competitor in the
market, ITunes, is not available in the country. Japan is an unusual country as it prefers CDs.
This makes it a challenging market to enter. This trend may be changing as it did in the US and
would likely be worth the effort and resources to pursue.
Russia is a country that has a high demand for streaming music and digital content. The
demand outmatches that of the United States (Knopper, 2015). Piracy is a huge concern when
dealing with Russia and securing products should be a priority. Germany is a great potential
market to expand into, however they tend to favor local over global so a partnership with a local
digital site may be warranted (Knopper, 2015). The final 2 countries are Mexico and Colombia.
Mexico has a population of 122 million and its close cultural ties to the United States makes it a
market that should be explored (Knopper, 2015). Colombia digital music consumption increased
85 between 2012 and 2014 and would make it a market primed for entry as a digital music
company (Knopper, 2015).
In the digital music marketplace employment has dropped. Which would have the
potential for a new company to acquire new talent with prior experience, possibly at reduced
rates. The rates have dropped from 73.6 in 2013 to 63.8 in 2015. Annual labor compensation
spiked in 2014 but returned to normal in 2015 at less than it was in 2013 (BLS, n.d.). With the
reduced costs of labor and the pool of experienced employees back in the market there is ample
opportunity to try to acquire new, experienced talent without having to offer overly lavish
compensation packages. Packages should still be appealing enough as there is the need to hire
key marketing and technical positions that would need incentive to join the company.
The demand of digital music content is an expanding market and has excellent future
prospects. There is potential allow for direct digital and video streaming of live events and

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concerts. This could be a significant source of new revenue. The expanding global market, while
there are some challenges, offers potential for large market shares of resources. E-sonic would
need to establish which markets would offer the most amount of gains for the least amount of
expense to start with. Entering the more difficult markets has potential but could carry significant
unforeseen costs.
From a functional standpoint it will be crucial to select a platform that allows for the
greatest reach to consumers. Creating an operating system with an easy interface and the ability
to be used on many systems and devices is the ongoing need of customers in the digital music
sales market. There is a need for e-sonic to establish a strong technical infrastructure to support
its growing business. There needs to be a strong system with significant redundancies. The
market is not kind to disruptions in service and every effort needs to be made to ensure the
system has great stability. Expandability is also key, there would need to be the option of
adapting the system to other languages and country requirements. Efforts must be made to
protect copyrights in countries that do not honor US copyrights prior to entry into those markets.
Corporate structure and reporting relationships should be established early on prior to mass
recruiting.
Human resource staffing of the appropriate talents will be vital to stability and
expandability of the brand. Job analysis of all key areas would be essential to hiring efforts to
ensure the correct individuals are being hired. Creative and technical positions will be in high
demands. Marketing positions will be needed and expertise in the global market will be needed
for further expansion. Compensation schemes will be a key component in attracting the best
individuals. There is a large pool of competition in the marketplace as well as crossover markets

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that tap the same labor pool. It will be critical to hiring success to have a desirable compensation
package in place.
Internally Consistent Job Structures
Bellow you will find a summation of the open positions within e-sonic. The first part of
this analysis contains written job requirements for creating internally consistent job structures.
This covers the four open positions within e-sonic; Administrative Assistant, Executive
Assistant, Office Manager, and Copy Writer. Administrative Assistant and Copy Writer are both
entry-level positions where the Executive Assistant and Office Manager positions require
advanced skill sets and requirements.
Administrative Assistant
The Administrative Assistant is an entry-level position that supports the various business
units and departments in e-sonic. Duties include daily administrative support duties including but
not limited to travel scheduling, managing meeting invitations, clerical administrative support,
filing, answering phones, data entry and general correspondence. Strong multi-tasking skills are
essential. Administrative assistants will support individual business units and report directly to
the Office Manager position. Exceptional computer skills are a must. A bachelor’s degree is
desired with preference to a degree in business administration. A minimum 1-2 years
administrative, customer service, or recording technology industry background preferred.
Executive Assistant
The Executive Assistant will be required to perform all duties required by the
administrative assistant position but with additional responsibility. This positions supports both

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mid and top level management positions at e-sonic. A bachelor’s degree is required with
preference to a degree in business administration. A minimum 2-5 years administrative, customer
service, or recording technology industry background is required. Exceptional computer skills
and interpersonal skills are essential. Strong financial analysis skills are a must.
Office Manager
The Office Manager is the highest level administrative position at e-sonic and requires a
seasoned administrative professional with a minimum 10 years’ experience. This position
encompasses all the duties of both administrative assistant and executive assistant. A bachelor’s
degree is required with preference to a degree in business administration. Administrative and
customer service, or recording technology industry background is required. Exceptional
computer skills and interpersonal skills are essential. The office manager position includes basic
market analysis skills. Strong financial analysis skills are a must. This position supports senior
most management and is responsible for managing all administrative staff.
Copy Writer
The Copy Writer position is an entry level position within e-sonic. This is an internal
position and requires a bachelor’s degree in marketing, advertising or creative function. Copy
writing candidates will be required to submit a portfolio of their work at time of interview. No
prior is required however recording technology industry background and prior experience is
preferred. Strong computer skills are essential. Strong verbal and writing skills are required.
Good Time-management skills are required. The copy writer position will be required to conduct
research and interviews related to their work. Strong interpersonal and organizational skills are a
must.

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The company job structure featured bellow shows the company’s job structure hierarchy.
This information will be useful in establishing compensation plans and is provided for sake of
comparison. The bottom tier of each division are entry level positions that require a minimum
of a bachelor’s degree and varying degrees of related experience. As positions move up the chart
they each require more specific requirements such as education levels and years of experience.
The first group to review is the administrative division. Administrative assistants
perform clerical and administrative duties. They organize files, prepare documents, schedule
appointments, and support other staff. As of May 2015 the median annual wage for secretaries
and administrative assistants was $36,500 (Secretaries and Administrative Assistants, n.d.).
Executive Assistants provide the same services but are required to perform additional duties and
pay would need to scale to reflect that. The Office Manager position is the senior most position
and is a manager level position within the organization. The Office Manager is responsible for
Operations
Sales and
Marketing Administrative IT Benefits
Directorof
operations
Directorof Sales
and Marketing Directorof IT
Manager of
Benefits
Operations
Manager SalesManager Office Manager
Manager of
IT
SeniorHR
manager
Operations
Analyst
SeniorCopywriter
Editor
Executive
Assistant IT Analysist
Operations
Assistant Copywriter
Administrative
Assistant IT Assistant
HR
Administrative
Assistant

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managing all levels of administrative positions below them. They require advanced management
skills and need to be compensated accordingly.
Administrative
Compensable factor
Relative Percentage
Value
Administrative and Management
Knowledge 30
Computer Application Knowledge 25
Time Management Skills 25
Writing ability 10
Interpersonal skills 10
Above is a Point Evaluation chart for the administrative division as well as the
organization grid of the administrative division ranked from highest to lowest. A point evaluation
method is one in which all compensable factors are accounted for in establishing the worth of a
given position. The factors that are usually included are skill, responsibility, effort, and working
conditions (Job Evaluation: Methods: Point Method, n.d.). All positions require strong
administrative skills but the office manager position encompasses greater responsibility for
managing staff in addition to their other duties and is the senior most position.
Administrative
Office Manager
Executive Assistant
Administrative Assistant

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The copy writing position in an entry level position within the marketing group but does
require a bachelor’s degree in a related degree program and an established portfolio. The median
annual wage for writers and authors, which would include copywriters, was $60,250 as May
2015 (Writers and Authors, n.d.).Bellow we provide a Point Evaluation chart for the marketing
division as well as the organization grid of the marketing division ranked from highest to lowest.
Marketing
Directorof SalesandMarketing
SalesManager
SeniorCopywriterEditor
Copywriter
Marketing
Compensable factor
Relative Percentage
Value
Writing skills 30
Proof reading skills 20
Computer application Knowledge 15
Presentation Skills 20
Time management skills 15
Adminstrative
Assistant$
Executive
Assistant$$
Office
Manager $$$

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For the copywriter position, the strongest required skill would be writing skills.
Presentation and Proofreading skills are a close second. The copywriter is an entry-level
position that has no staff reporting into them and as such management skills are not necessary,
although time-management skills are crucial. The Copy Writer is the lowest paid position within
the marketing division and is on par with the administrative assistant position within the
administrative branch.
External Competitiveness
The structure of e-sonic is one that necessitates the need for a pay-policy that is tailored
to the specific divisions within the company. An either or approach would not be recommended
as it impacts the firm’s ability to stay competitive. When determining the pay-policy mix for the
administrative branch it is logical to differ it from the more competitive departments pay scale
such as the marketing department. The marketing branch, for example, is a results oriented
department and would operate well using an incentive-based pay program such as compensation
for individual sales goals. The administrative branch is support staff and could not be measured
by the same guidelines as the marketing department, or any other competitive goal oriented
division.
Copy writer $
Senior
Copywriter
Editor $$
Sales Manager
$$$
Director of Sales
and Marketing
$$$

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Merit based pay
Pay for
Performance
Administrative assistant $200 $200
Executive assistant $200 $200
Office manager $200 $200
Merit Basedraisesover10
years $2,000
Pay forperformance are one time paymentsandare not cumulative over
time
The most reasonable pay-policy for the administrative branch would be a merit based pay
scale. A merit based pay-policy for the administrative branch would the most equitable based on
job responsibility. Merit based pay scale has the benefit to the employee of being cumulative
over time. As the chart above illustrates a merit raise of $200 increases the employee’s potential
earnings over a 10 year period to an additional $2000. A pay-for-performance bonus would
afford the employee a one-time pay out but would not be cumulative. Pay-for-Performance
bonuses are also taxed at a higher rate. The two factors that will be looked at for deciding merit
increases for administrative staff will be Market Price and Internal Value. The market value is
the employee’s worth in the current job market and the internal value measures the employee’s
worth to the organization (Lee, 2010).
The Administrative branch has 3 pay grade ranges. The 4th pay range/grade is used only
for the senior most company executives. The positions as previously noted are administrative
assistant, executive assistant, and office manager. The administrative assistant falls in the
company’s grade one range, the executive assistant in grade two, and finally the office manager
which is the highest level of the administrative branch falls in range three. The office manager

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is the only role within the administrative branch that requires management of individuals and
scales for a higher compensation for this reason.
0
20000
40000
60000
80000
100000
120000
Grade/Range 1 Grade/Range 2 Grade/Range 3 Grade/Range 4
ANNUALSALARY
Pay Grades and Ranges
`
-100000
-50000
0
50000
100000
150000
200000
0 500 1000 1500
Salary
Job Evaluation Points
Market Pay Graph
Annual Salary Predicted Annual Salary Market Pay Line
Administrative Range
Administrative Assistant 1
Executive Assistant 2
Office Manager 3
Market Pay Line
y = 132.33x+ -49049.51
r2 =.56

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As the above graph shows the administrative assistant position which is an entry level
position that requires limited degree and experience requirements. The starting salary range is
50k annual salary. This range is commensurate with entry level positions in comparable
industries though running to the higher end of the range but much lower than the maximum. The
results were collected using a 2% cost of living increase which is slightly higher than 2015 1.7%.
Comparison was made to similar industries that were non-unionized. The Executive assistant
position requires additional responsibilities, training, and skill sets which are above and beyond
those required by the administrative assistant position. The starting pay for the Executive
Assistant position will be 80k. This would place it between the median 77k and 3rd Quartile of
89k. This is a competitive rate that will allow room for increases and raises based on a merit
based pay-policy.
The senior most position within the administrative branch is the office manager position.
This is not a senior executive position but is on the same level as departmental managers. The
starting pay is 115k. Like the executive assistant position the pay rate falls in-between the
median of 108k and the 3rd quartile of 129k. This will allow for plenty of room for merit
increases over time. All three administrative positions will offer reasonable starting salaries
based on industry data. Staying above the median but bellow the maximum allows e-sonic to
offer competitive salaries without overextended the budget and damaging the company’s bottom
line. The salary ranges including low, median, high range are listed below.

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As important as it is to be competitive in initial offerings when filling positions, it is
crucial to think long term as well. Keeping below the 3rd quartile will allow for ample room for
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
0 200 400 600 800 1000 1200 1400
SALARY
JOB EVALUATION POINTS
Pay Policy Lines e-sonic vs industry
At Market Pay (Average) Market Lead (Highest Quartile) Market Lag (Lowest Quartile)
Range 1 2 3
Minimum Pay
44,736.42 73,557.98 100,519.89
Midpoint
46,973.24 77,235.88 108,058.88
Maximum Pay
49,210.07 80,913.78 115,597.88
Median
46,973.24 77,235.88 108,058.88
Job Minimum 1st
Quartile
Average Median 3rd
Quartile
Maximum
Administrative
Assistant 36,848.72 42,862.56 47,028.82 46,973.24 51,143.50 58,993.59
Executive
Assistant 53,762.54 63,123.72 78,383.65 77,235.88 89,154.60 117,886.32
Office Manager
62,175.23 71,711.87 105,546.28 108,058.88 128,630.26 160,380.85

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raises to aid in employee retention. This will work towards reducing employee turnover and help
foster company loyalty and longevity. The competitive starting salaries coupled with fair merit
based pay increases overtime will be attractive to potential employees. As a company there is
also the possibility of incorporating a gain share option that could be added to the other pay-
policies would add value in terms of recruiting and promote an environment of employees that
are invested in the success of e-sonic.
e-sonic Recommendations
e-sonic is facing strong competition in the market and will need to tailor an equally
aggressive benefits and compensation package to be externally competitive . e-sonic has many
positions that need to be filled, so we have established a baseline model for creating internally
consistent job structures to aid in the creation of a compensation plan tailored to meet the needs
of their emerging business. This is a crucial first step in the process of producing an overall solid
and competitive compensation structure within the organization. Using this system will offer a
rock solid foundation on which to build this new endeavor.
We have explored have broken down by divisions the various positions and their related
skill sets. We have done this to assign value to those activities and to see where each position lies
within the company’s job structure. This allows for consistency in applying compensation for
similar levels of knowledge and skillsets equally, regardless of division. We have opted to
suggest a pay-scale starting between the median and 3rd quartile established by industry
standards. This will afford the company the ability to be competitive and still allow for growth to
be rewarded.
In regards to raise and bonus pay scales we would recommend a diverse plan that would
suit the individual divisions. The departments that would require aggressive competitiveness,

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such as sales and marketing or product development, should look at instituting a pay-for-
performance plan what would foster a competitive environment. However, branches like
administration and finance, would be better served with a merit based pay scale. A companywide
gainsharing program is also something of merit that would allow for greater employee
commitment and morale, though may be cost prohibitive early on. It is important to remember to
be competitive in offering compensation packages to attract and retain the best caliber of
employee possible but not to the detriment of the company’s bottom line. We feel that the
recommendations that we have proposed for internally consistent job structures and external
competiveness will allow for the creation of a generous compensation program that will allow e-
sonic to recruit and retain the best talent.
The largest factor that needs to be remembered when establishing any compensation plan
for e-sonic is that there are a great many competitors in the market all vying for the same talent
pools. This would need to be of the utmost importance when factoring how generous, or how
frugal, a course to take. There is great opportunity to offer a substantial but not overly lavish,
plan that allows for excellent external competitiveness and still protecting company profit
margins.

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References
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Administration.html
IFPI Global Music Report 2016. (n.d.). Retrieved September 11, 2016, from
http://www.ifpi.org/news/IFPI-GLOBAL-MUSIC-REPORT-2016
Job Evaluation: Methods: Point Method. (n.d.). Retrieved September 25, 2016, from
http://www.hr-guide.com/data/G414.htm
Knopper, S. (2015, February 26). Streaming Music Companies Battle for International Ears.
Retrieved September 11, 2016, from http://www.rollingstone.com/music/news/streaming-
music-companies-battle-for-international-ears-20150226
Secretaries and Administrative Assistants. (n.d.). Retrieved September 25, 2016, from
http://www.bls.gov/ooh/office-and-administrative-support/secretaries-and-administrative-
assistants.htm
Top 6 Online Music Stores to Buy MP3 Music. (n.d.). Retrieved September 11, 2016, from
https://imusic.iskysoft.com/download-music/buy-mp3-music.html
Writers and Authors. (n.d.). Retrieved September 25, 2016, from http://www.bls.gov/ooh/media-
and-communication/writers-and-authors.htm