Executive Summary - Weebly



[Type the document title]3799367-1136133[Type the document subtitle]Submitted BY:Ethan Becker-Menditto Amie BradyChao-Ching LienUlises MarionaCarl PittExecutive SummaryFastCat will design a pay package that sets us apart from competitors by encompassing a unique pay mix, and attractive pay levels. The pay mix includes base pay, short and long term incentives, benefits, and bonuses. Benefits are offered universally throughout but the other pay forms vary based on the job and goals of the organization to enhance such things as productivity, innovation, and teamwork. This proves best considering previous strategic decisions, and the cohesion with business and compensation objectives. Benchmarking is imperative to get a look at the competition in order to have an idea where and how FastCat fit. Included in this benchmark, jobs will be analyzed and matched, pay levels explored, competitor structure and pay mixes examined. Based on the research done on other companies we have decided to lead the market in the marketing department, match in administration, and lag in both technical and engineering departments. At different times the market, competitors, and employee desires amongst other things may cause the strategies to change so we are prepared to be flexible with such decisions by offering dissimilar pay mixes and altering the pay levels when necessary. Being involved in two relevant markets such as technology and medical makes it a little challenging to compare competitors and find the top employees. Understanding the market we are in helps to alleviate some problems. Problems may range from supply and demand in regards to jobs needed to be filled and potential employees that available and qualified to fill them. Along with supply and demand come how much we are willing to pay and how much they are willing to accept. This is an important reason for surveys and benchmarking mentioned earlier. We have been able to capture all information concerning this topic to make our decisions. One thing that was done was matching the jobs developed at FastCat with those of the competitors. In doing so we discovered our pay levels and pay mixes that keeps us competitive externally and aligned internally. An important way to make certain conclusions was to design surveys in order to gain an array of knowledge and stay competitive with hopes of catapulting FastCat’s success. Technology plays a major role in everything we do and expands our reach. Developing compensation metrics to analyze and compute data about jobs and pay from different sources is due to technology. Policy lines shown in the graphs explain the percentiles in respect to FastCat in the market for each of the departments. For example, we planned to lead the market in marketing and we are in the 75th percentile while in engineering we are lagging as planned in the 25th percentile. Therefore, the policy lines are consistent with the strategies. These strategies include offering greater incentives such as bonuses and stock to engineers to increase productivity, hence, lagging in base pay, which will match or surpass competitor’s total compensation given highly productive engineering. Particular jobs have certain grades that can be seen when viewing the graphs. Those jobs with the same grades are equal in base pay, e.g. senior fellow and visionary champion for administration duties. Recommend Strategy for CompetitivenessIn Phase I, we presented several recommendations for how to improve the internal structure of FastCat by focusing of its business strategy, values, and other Human Resource (HR) systems. The internal plan promoted five compensable factors determined: Education/Experience, Innovativeness, Teamwork, Technical Requirements, and Responsibility Requirements. In the next phase, we will explain how we analyzed the market and propose a few additional recommendations about how to compensate employees in comparison to the external market. It is important to evaluate the internal and external market in order to stay competitive in the market, however; it is important to remain within FastCat’s budget as well. Evaluating the AlternativesFastCat’s compensation strategy must adapt to the changes that continually take place in the marketplace in order to stay ahead of the curve. The company is expanding, however, based on our analysis, the company has expanded too rapidly without considering all other factors first. Strategic goals and direction could be an advantage for the company. In contrast, improperly implemented or wrongly directed decisions could also be extremely detrimental. Bad decisions about the future of a company jeopardize its position in the marketplace. For that reason, we suggest that the company adjusts and reinforces its proposed corporate pensation StrategyA comprehensive compensation strategy that is aligned with its corporate values and strategic objectives will in turn further the company’s sales and promotes future business. Currently, FastCat does not provide any incentives. If a company fails to recognize contributors efforts set forth, productivity could drop, and the internal climate of the company could change negatively. Short-turn and long-term rewards are a way to create incentives for employees and promote a greater atmosphere. Performance targets will be set for individual employees, teams, and the entire organization. If targets are met, incentives will be paid. By satisfying employees with its compensation packages will promote as well as support sustainability and longevity in the corporation. Setting Pay-level Policy Setting the compensation policy is one of the most critical decisions in designing FastCat’s compensation plan because decisions regarding the pay-level, pay mix, and structures directly influence labor costs and signal FastCat values to the market. Collecting information and making judgments about the compensation paid by other employees will help FastCat gain a competitive intelligence. We propose a compensation strategy that will help FastCat employees achieve its performance objectives, reduce labor costs, retain talented individuals, and comply with legislative issues worldwide. Purpose of the SurveysCompensation surveys help firms adjust pay levels, design new forms and structures, address special situations, and estimate competitor’s labor costs. Compensation consultants should tailor the level of detail and data used in their surveys to meet their purposes. This requires creating new structures and establishing new pay levels. It is important that FastCat consider the external market before pursing the recommended strategies; the surveys will provide support for our recommendations and allow the company to make informed decisions via market analysis. It is important to evaluate all compensate measures and understand how other companies are compensating its workforce. Otherwise, our employees will eventually become our competition. Analyzing the MarketThe first step in phase II is to select the correct data to benchmark all of the jobs at FastCat. First, we will match all of the FastCat jobs as accurately as possible with the data provided under the benchmark jobs. Next, we will reintroduce the Job Evaluation (JE) points score for each job and use the information presented in Phase 1 in order to keep things as consistent as possible. As before, we will use the same structure previously provided and divided the jobs into four categories: Administrative, Engineering, Technical, and Marketing. Next, we will perform several surveys to delve deeper into the data and analyze other aspects of the market by determining the relevant labor markets occupation, geography, and competitors. Please find below FastCat’s market line, which provides a line-of-sight and signals success in our results.Figure. FastCat’s Market LineDesigning a SurveyDesigning a survey includes a number of steps:A. Select Benchmark Jobs and match survey jobs with FastCat jobsAfter reviewing the information for benchmark job provided by the software, we felt that it would be necessary to group some of the jobs together. Based on the criterion that was recommended for FastCat’s objectives and JE points determined in Phase 1, we believe that some of the jobs are valued the same, while others are slightly more or less. With that information in mind, we decided to group some of the jobs together into the same categories, such as the Project Support Assistant and Travel Coordinator, Administrative Aide & Training Assistant, and Administrative Assistant II and Green Guru. An overview of all of the survey jobs in the software matched with all FastCat job titles/positions located in figure 1.. Match with FastCat JobsSurvey JobFastCat MatchOffice Support 1 Project Support Assistant & Travel CoordinatorOffice Support 2 Administrative Aide & Training AssistantOffice Support 3 Administrative Assistant II & Green GuruOffice Support 4 Administrative Leader Office Support 5 Visionary ChampionOffice Support 6Senior FellowMarketer 1Marketing SupportMarketer 2Marketing Service RepresentativeMarketer 4Software Solution ConsultantMarketer 5Graphic Designer Marketing Manager 2 Client Account Leader Technician 1TechnicianTechnician 2Implementation ConsultantTechnician 3Quality Assurance AnalystTechnician 4Quality Assurance Analyst ATechnician 5Senior Quality Assurance TechnicianEngineer 1User Interface DesignerEngineer 2Usability EngineerEngineer 3Software User Interface ArchitectEngineer 4Software DeveloperEngineer Manager 1 Project Leader Please keep in mind, we are not suggesting that these jobs should be compensated the same; however, we would like to briefly note that these adjustments must been be taken into consideration and adjusted accordingly. We will go into further detail about these adjustments in the pay-level section. B. Selecting the Right CompetitorsInitially, we compared all of the companies in the market. Next, we decided to narrow our search and pick out the top four companies that were most similar to FastCat and in the same industry. Information for sixty companies in FastCat’s geographical area was provided by the software. There were small companies (less than 400 employees) medium companies (between 400 and 1,000), and large companies (over 1,000 employees). Several industries included computer and hardware, semiconductors, software, financial and manufacturing. We understand that FastCat is currently a small business; however, we felt that it would be best to compared the four companies that were medium-sized instead since productivity is steadily increasing. As a result, the new compensation strategy will need to be adjusted. Please find the summarized results below of the specific companies that we felt were the most comparable to FastCat’s operations. Table 1. Comparison of FastCat Competitors Compensation PackagesCompanyNetwork Services & Web Based ITROA Base Salary/ Compensation Benefits/ Base SalaryStock Options/ Base SalaryBonus/ Base Salary4Medical Technology Application & Software-11.980.870.140010Medical Technology Application Software -0.020.870.140.01033Medical Technology6.580.720.080.20.1247Health Insurance Systems 18.210.790.140.050.08Decide which pay forms to compare:The Base/Total Compensation percentage in the marketplace is .80. Companies 4, 10, 33,47 compensation percentages are very close to this figure. Using this figure will help us match the market more closely. Decide which Compensation Metric to Use: After reviewing the external data we decided to vary the forms of compensation by using different pay-levels and pay-mix for each department. By using different compensation metrics will allow us to grab a better grasp of the market. FastCat should have a different pay level policy for different types of work (i.e. pay above the market for engineers and markets and match the market for administrative and technical work. Figure. FastCat job Based on JE pointsD. Understanding the Results:By entering in all of the jobs at FastCat we can see a perceptive of FastCat overall position relative to the market. Using the Market Measure base wage mean the R-squared was a little shy of 0.5, which is what we were trying to accomplish. Based on FastCat’s base pay, there are many positions that meeting and lagging the market, while other positions are leading the market. Please find the summarized results of FastCat in the market in comparison with its competitors. At first, this chart may seem unfair. However, we plan to make any necessary adjustments via mixed pay-level. We would rather FastCat employees be satisfied with their full compensation plan, rather than just certain aspects of it. Provided below is a regression graph of all of the jobs at FastCat in comparison to the external market. E. Evaluate the “fit” between FastCat and its market:We would explain the short and long-term incentives as well as the rewards and benefits provide for each department more in detail throughout the rest of the analysis.Here is a brief synopsis of our plans:Engineers and Marketing departments - leading the market with higher incentives in the short and long-term based on their performance. Technical and Administrative departments - match the market Engineer DepartmentIn the Engineering department we would like to lag pay to increase productivity by offering higher incentives in the short and long-term. For instance, lump sum bonuses will be granted for individual performance achievements to recognize short-term achievements. These bonuses will increase productivity and allow the engineering department to see better future rates based upon their production. In this case, the base pay will be lagging but the potential amounts of overall compensation could be higher based on high productivity, which will allow the employee to obtain the lump sum bonuses as well as provided employee stocks. Stock options will be used as long-term incentives and give the engineers a real sense of ownership of the company. In turn, engineers’ investment in the company increases the innovation and quality of work. The more productive employees are, the higher the revenue for the company, and the greater their return. Further, we chose not to match or lead base pay because we did not want to attract newer employees and possibly upset current employees. If we offer a higher base pay, we will be unable to offer higher incentives for employee performance. Not to mention it will increase overall fixed labor costs. Only 38% of the employees in the database received long-term incentives, **% of the employees were …….Provided below is a regression graph of the engineering DEPARTMENTS MARKETLINEHindsightThere were some adjustments made after reviewing the market data that we originally unforeseen. We decided that our Visionary Champion and Senior Fellow salaries need to be adjusted. The Visionary champion base pay will need to be adjusted slightly less since it is currently leading the market in base pay. Further. will make comparatively that same since the Senior fellow lags market. Synopsis of the Engineering department: Lag the market for base, plus bonus and stock options for excellence!!! Please find the summarized results of the Engineering department below.Table 1. Engineering Department Salaries Engineer FunctionSurvey jobTotal PointBase Salary Bonus/Stock optionTotal compensationProject LeaderEngineer Manager 1230$109,322.195%/10%$125,720.50Software DeveloperEngineer 4200$88,442.535%/8%$99,940.06Software User Interface ArchitectEngineer 3190$73,471.844%/5%$80,084.31Usability EngineerEngineer 2180$64,858.563%/4%$69,398.66User Interface DesignerEngineer 1170$53,112.982%/4%$56,299.76Administrative: We plan to match the market in the administrative market due to the way jobs are structured. We felt that match the market in order to retain and make the employees feel appreciated. It makes it very difficult for us to provide employees with incentive pays due to the kind of jobs that they are required to do, therefore; we will focus on offering higher benefits and non-incentive pay. For instance, we will offer merit pay for long-term pay increases based upon longevity inside the jobs and better job tenure the longer the individual is working the higher their long term salary will become. Please find below the summarized results of the external administrative salaries. Administrative Department Matching the Marketing Administrative FunctionSurvey jobTotal PointBase SalaryBonus/ Stock OptionsTotal CompensationSenior FellowOffice support 6230$54,405.616%/ 1%$64,173.19*Visionary ChampionOffice support 5210$54,330.816%/ 1%$64,992.99Administrative LeaderOffice support 4160$46,938.954%/ 1%$56,798.31Green GuruOffice support 3130$39,592.463%/ 2%$48,882.77Administrative Assistant 2110Training AssistantOffice support 2110$31,132.573%/ 2%$39,030.98Administrative Aid90Project Support AssistantOffice support 180$29,210.621%/ 2%$35,531.93Travel Coordinator70We have decided not to lag the market because this will not attract or retain good employees due to competition. Further, we do not want to lead the market because the focus of FastCat is on innovation and product design. Leading the market in administrative pay will not leave room for growth and development.Marketing: We recommend the market in base wage for the marketing department, however, leading the market in total compensation in order to maximize the ability to attract and retain quality employees and minimizes employee dissatisfaction with pay. Due to FastCat competing with higher other companies we want to attract the best marketers in the market in order to increase our brand name and also increase the marketing talent on our team. We recommend implementing a policy line with 5 percent of the market. This will help us in the long-term by enhancing our marketing department. Figure. Marketing Department Leading the Market in base pay. We choose do not want to lag the market because offering a lower base pay will not be as effective in regards to motivation. We also do not recommend matching the market because we want to provide employees with an incentive to remain with our company. Figure 1. Reveals the Marketing departments figures summarized.Marketing Department Leading the Market Salaries:Marketing FunctionSurvey jobTotal PointBase SalaryBonus/ Stock OptionTotal CompensationClient Account LeaderMarketing Manager 2230$140,225.566%/ 4%$156,016.08Graphic DesignerMarketing 5200$123,491.3214%/ 6%$155,994.23Software Solution ConsultantMarketing 4160$95,044.2811%/ 4%$108,008.51Marketing Service RepresentativeMarketing 2140$68,205.8214%/5%$77,369.29Marketing SupportMarketing 1100$53,452.0814%/ 8%$62,213.73Technical: We would want to lead the market in order to maximize the ability to attract and retain quality employees and minimizes employee dissatisfaction with pay. By doing so, we will have higher and better business professionals that could teach the younger individuals in our technical department how to increase efficiencies and overall increase knowledge and productivity.Due to Fast cat competing with higher other companies we want to attract the best technical worker in the market. Just like we have stated in Marketing we do not want to lag the market in our technical department because offering a lower base pay will not be as effective in regards to motivation. We do not want to match the market because we want to provide employees with an incentive to remain with our company.Integrate the External and Internal Structure We integrated FastCat internal structure via the use of grades and ranges/bands and zones. This structure was the most accommodating. Initially we decided to make a few preliminary judgments based on what we have learned in the Compensation textbook. However, sometimes strategies change a bit after performing a market analysis and analyzing the market. Technician Department Lagging the MarketTechnician FunctionSurvey jobTotal PointBase SalaryBonus/ Stock OptionsTotal CompensationSenior Quality Assurance TechnicianTechnician 5220$58,047.5011%/ 4%$69,242.75Quality Assurance Analyst ATechnician 4150$48,596.558%/ 6%$61,065.11Quality Assurance AnalystTechnician 3140$41,092.677%/ 7%$53,122.04Implementation ConsultantTechnician 2110$32,278.596%/ 8%$41,389.12TechnicianTechnician 190$29, 539.083%/ 0%$35,252.23Future Recommendations Markets continue to fluctuate; therefore, FastCat’s must evaluate and adjust compensation plans continuously at least once per year at the most. For that reason, it is the upmost importance that FastCat monitor its external market. In fact, we recommend signing up for our monthly, quarterly, or yearly reports to receive the most up-to-date information about the market. In the event that any changes may occur, please feel free to contact us with further assistance. Sometimes it is best to make small incremental changes to compensation plans rather than drastic changes. This allows the company to make the necessary adjustments that they see fit, while maintaining employee satisfaction. It is expect that changes will continue to arise due to the fast-paced environment and complex industry that FastCat is involved. Finalizing FastCat’s Compensation PlanFastCat will use a variety of pay forms for each departments. Some groups must be group together as explained earlier in the beginning of Phase 2. We recommend making the necessary changes in order for FastCat to sustain its current market position, especially since current labor costs are extremely high. If these issues are not addressed to the market fixed labor costs will continue to increase, which will burden the company financially. Further, the company will be unable to successfully expand to other geographic locations. We believe that overall, our propose compensation strategy approach better well-matched for FastCat after considering its values, objectives, and overall mission of the company. Further, the company will be able to support its performance objectives, attract and retain talent, control labor costs, and comply with legislation, while maintaining a stable place in the market. In Phase III, we will discuss further develop the proposed incentives plans in order to complete FastCat’s total compensation plan. ................
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