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FastCat Phase I

Implementing the Compensation plan


2016-06-27
IIM Ranchi PGDHRM
Akanksha Ojha Ajay Burman Aparna Yadav Niharika Pallavi Dasgupta Ronita Saha

CONTENTS

EXECUTIVE SUMMARY ......................................................................................................................... 2

RECOMMENDED STRATEGY AND OBJECTIVES .................................................................................... 4


Recommended Internal Structure ....................................................................................................... 7

Value Creator ............................................................................................................................................ 7


Value Enabler ............................................................................................................................................ 8

Grievance Redressal Process................................................................................................................ 9

Compensable Factors & their explanation ........................................................................................ 10


Internal Structure ............................................................................................................................... 16

Skill Based Evaluation - Value Creator Job Family .................................................................................. 16

Job Evaluation - Value Enabler Job Family .............................................................................................. 17

RECOMMENDED IMPLEMENTATION PLAN ....................................................................................... 20


Manual ................................................................................................................................................ 24

SUMMARY AND RATIONALE .............................................................................................................. 26

EXECUTIVE SUMMARY
FastCat is a provider of Software solutions to small and medium scale healthcare providers.
Presently they are facing tough competition from the bigger players who have started venturing into the
small and medium scale markets. FastCat needs to structure its organization so as to take over the
competition head-on and expand the existing business.
FastCat has the following objectives:

Expansion & Retention

a) Expanding customer base and retaining existing


ones
b) Improving customer satisfaction

c) Focus on retaining the existing employees

d) Attract global talent to support Global expansion


plan
Innovation & Creativity

a) Drive product innovation & breaking the silos within


the organization
b) Increase growth and revenue

c) Be at par with market competitors


Making employees informed of how they are paid
Cost containment - Employment cost
We have suggested a flexible structure with a mix of Flat and Hierarchical structure for the
growth of the organization. It provides flexibility to individuals as well the ownership for the product lies
with the product owner.
The organization has 24 distinct job positions defined for its staff. We have segregated these
tasks into two broad headings:
a) Technical
b) Administrative

The technical jobs are skill based specialized jobs. These are specialized jobs that need expertize
as FastCat caters to the specialized needs of its customers in the small and medium sized section of the
healthcare market. Administrative jobs have been categorized as job based.

Further, we have identified compensable factors for the benchmarked jobs and defined them as
per the requirements of the job role and the skill needed. We have then assigned weights to each of the
compensable factors and assigned these weights to each of the designation defined in the FastCat
structure. The cumulative scores have then been arrived at. The higher the Cumulative score, it shall
indicate that the responsibilities of the individual are more and shall be compensated higher.

RECOMMENDED STRATEGY AND OBJECTIVES


The success of organizations is highly dependent on the structure that it adopts. Structures vary
from company to company, depending upon the business it is involved in and the industry. The size of
the organization is also a determining factor for deciding on the structure that the organization will
follow. Also, a well-defined structure provides guidance to all employees by laying out official
relationships and reporting structure. It also creates accountability among the employees.

FastCat was founded in 2001 by three engineers in Minnesota who found themselves
unemployed as a result of the dotcom buzz. They had experience of working in cutting edge companies
as software engineers. Bringing together their experience and ideas together, they identified a niche
unexplored area, healthcare software support software for small and medium-sized medical facilities.
Before companies such as FastCat provided healthcare products, the processes for interfacing between
healthcare providers, patients and physicians was fragmented and frustrating for one and all. Tracking
patient data and insurance claims required a lot of paperwork and it added to the problems of
healthcare providers.

From its humble beginnings in 2001, FastCat was now a privately held firm that has grown to
200 employees with revenue of $36.5 million and net income of $8.9 million. By focusing on the small
and medium sized players, FastCat has now established itself in the healthcare sector that is still
untapped by the bigger players. FastCat has built a reputation for some of the best medical software
available today and it has built a customer base of smaller providers not served by the very large
healthcare software companies.
Over time, big players such as IBM, Oracle and SAP are trying to adapt their products for small
and medium scale medical service providers. To get ahead of others in competition, FastCat has built a
culture of innovation and communication to foster a spirit of growth and new ideas.

One of the major objectives of FastCat is to drive product innovation and break silos. For this,
we suggest a mix of flat and hierarchical organizational structure.

The organization is headed by the CEO, to whom product owners will report directly. Each and
every product will be headed by a product owner, who shall be responsible for successful delivery of the
product to the clients. This is a client facing role where the product owner shall interact with the clients
on their requirements. The product owners will have software teams working for various variants of the
products. FastCat specializes in medicare products of which there are multiple variants. So, each of the
engineering teams will be working on a product variant. Once the project has been delivered the
engineers can be reassigned to a different product variant. This will foster team spirit and innovation as
there will be exchange of ideas.

The various products can share the same marketing team. This will streamline the workforce
required for marketing activities. With a workforce of 200 employees it is very important to utilize the
workforce in the best way possible. With such a small workforce, it is important to optimize the
formation of teams.

In the present structure of FastCat, there are 24 designations for 200 employees. According to
organization size, it is very difficult to manage so many different designations. To achieve maximum
benefits from the structure of the organizations and expand its market outreach, the related
designations should be merged. At lot of employees are considering leaving the organization. To curb
this, restructuring will be very helpful. It is difficult to manage so many designations for an organization
that is not in need of a tall hierarchical structure and has only 200 employees.

The workforce can be utilized for multiple projects depending upon their delivery timelines. This
leads to optimization of human resource. A tightly bound organization will not be able to provide the
autonomy that is required in an organization that thrives on innovation. A completely flat structure will
fail to cater to the needs of ownership that is needed in FastCat to deliver its products to clients. Hence,
the product Owners are accountable for managing the Product delivery timelines.
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A well-defined structure goes a long way in helping employees to set their career goals,
understand pay structures and clarity about work. Currently about 26% of the employees in FastCat are
not clear about their compensation policies. Clarity about role and its linkage to the compensation
policies will help employees understand about their remuneration.
A well set structure will help FastCat achieve its strategic goals in a more focused manner. The
employees need to interact freely to foster team work and innovation and the suggested structure helps
to promote the same. As the teams will be working across various projects, they will be aware of the
knowledge across various products variations and their skills can be utilized across various products.

The company will also implement new technology that will create a demand for new product types.
FastCat continues to strive to be the leader in innovative technology. Each department will work closely
together to generate new ideas, and to ensure that the company does not produce products that do not
have a ready market. The teams will also work with the established customer base to guarantee a
superior product. Therefore, communication will be a key factor in establishing teamwork. The company
already possesses the skill and technology to promote its software usage abroad. FastCat will implement
globalization by expanding the customer base to more countries outside of the United States. In order
to maintain the competitive advantage, FastCat will expand the current version of software to handle
more languages and currency. Our Company must better understand our changed customer base and
ensure each product created has a market demand. The company will redirect and re-energize our
employees to create highly committed employees who look towards the future og the company. This
will attract and retain talented employees. FastCat has identified three high-growths and underserved
industries: financial services, healthcare and insurance. It is believed that these industries are most
likely to purchase its software solutions. By targeting these industries, FastCat hopes to increase its
customer base and essentially our revenue.

Recommended Internal Structure


The main task at hand for FastCat is expansion of customer base as well as retention of old customers. In
order to expand customer base, they have to foray into new products. The employees need to be
innovative, creative and a strong understanding of customer needs. To retain old customers, the value
created by FastCat should be incremental day by day i.e. the software should be able to accommodate
their changing business needs. To cater to such change in the industry dynamics, the value creating
employees need to be motivated to offer such solutions to the clients. These new solutions for
customers will thrust FastCats presence in the market. To motivate them in acquiring new skill and keep
upgrading their personal self, their pay structure should value their skills. These employees will help
FastCat in surviving the competition set out by large companies. In order to focus on such value creating
jobs, we have segregated the 24 jobs mentioned into two groups - value creator and value enabler.
We have identified 11 value creator and 13 value enabler jobs in FastCat. For value creator jobs, we are
using Skill Based Evaluation. The Value enabler jobs are redundant in nature. They have fixed set of
duties and responsibilities to cater. So evaluating them on Job Based Evaluation is more suitable.

Value Creator

We have identified the 11 value creator jobs. While going through their Job Descriptions, we came to
know that only 8 out of the 11 jobs are those where quite a reasonable proportion of employees would
be working in those jobs. Such jobs are benchmark jobs in the value creator list. Their content are well
known and relatively stable over time. We went through the job content of these 8 jobs to analyse their
skills. The below jobs have been identified as Value Creator jobs:
Benchmark Jobs
Programmer Analyst
Project Leader
Software Engineer
Technician
Quality Assurance Analyst
Quality Assurance Analyst A
Senior Quality Assurance Technician

Non-Benchmarked Jobs
Graphics Designer
Senior Fellow
Software User Interface Architect
User Interface Designer

The importance of these value creator jobs are as follows:

1. These are basically the technical jobs, which directly contribute to the client delivery. They are
very critical for FastCat to be successful.
2. Employees in these jobs are very important as their knowledge of the FastCat product is a main
resource.
7

3. For FastCat to expand globally, their knowledge will be one of the main resource to train the
new joiners on the main FastCat Product. To scale rapidly, they will be a very crucial knowledge
resource for FastCat.
4. The domain knowledge of healthcare industry of current employees will be very useful in
understanding the client needs and their changing environments. They need to be retained as
their knowledge is very valuable.
5. They will be able to support new product development with their expertise in the healthcare /
medical industry.

Value Enabler
Out of the 13 value enabler jobs, there are 3 jobs where quite a reasonable proportion of employees
would be working in those jobs. Such jobs are benchmark jobs in the value enabler list. Rest all 10 jobs
are non-benchmark jobs and they are in the organization for supporting the activities of value creator
jobs. Their jobs are also important as without them, it will be difficult for technical people to carry on
their activities. However, from the strategic point of view, their jobs are repetitive and clearly defined in
nature. No specialized skills are needed to execute those jobs. Thus, we have used job-based evaluation
for identifying the compensable factors here. The below jobs are identified as Value Enabler job:
Benchmark Jobs
Marketing Services Representative
Marketing Support
Software Solutions Consultant

Non-Benchmarked Jobs
Administrative Aide
Administrative Assistant II
Administrative Leader
Client Account Leader
Clinical Liaison
Implementation Consultant
Project Support Assistant
Training Assistant
Travel Co-ordinator
Visionary Champion

Grievance Redressal Process


The pay structure will be different for both the kinds of job. This will lead to some dis-satisfaction among
the employees. In order to address the dis-satisfaction, proper grievance redressal mechanism should be
in place at FastCat. As the organization is of size 200, direct interaction with managers on such issues is
possible. Face to face appeal of such matter will give a platform for human interaction to the employees.
Involvement of line managers in such processes are very necessary. HR manager comes into picture only
from the compensation policy explanation perspective. Below process can be used at FastCat to handle
employee grievances on pay related queries or issues:

1. The employee should first approach the line manager regarding any issue with compensation.
The communication can be done face-to-face or via email. This will enable the line manager to
have clarity on the employee issue beforehand and be cognizant of the matter.
2. After reading the compensation policy, the employee and line manager should meet and discuss
the issue. In case of any difference of understanding, the matter is made clear during the
conversation. It will help employee and the line manager to be on the same page. In case the
issue was with the employees understanding, the matter can get cleared and closed here.If
both line manager and employee are not able to come to a common understanding, they should
approach the Human Resources manager.
3. The Human Resources Manager will meet the employee and line manager. Before meeting, he
should collect the appropriate documents related to the issue. In the meeting, he will discuss
with both the stakeholders on their understanding and correct them.
4. In case the issue is found to be something that needs to be corrected, the line manager must
take the ownership of getting it resolved with the support of Human Resources Manager and his
superior.
5. If the issue is still not resolved, then the employee should report the matter to the supervisor of
the line manager and get it resolved.
6. Employee should be made aware of the fact that s/he should not approach the supervisor till he
had not made the communication process complete with the line manager.
7. All the emails/letters/application should be kept safely till the matter is not satisfactorily closed.

Compensable Factors & their explanation


The compensable factors for Technical jobs are as follows:

Technical Skills: The ability of an individual to apply knowledge and capabilities to perform specialized
and specific tasks.

Technical skills have been assigned the highest weight age of 25%, this is because the jobs in the
technical category rely heavily on the knowledge acquired while in graduation and work experience.
These jobs also depend on the computer expertise of a person. Most positions within the technical
family are responsible for maintaining computer systems and creating and delivering healthcare support
software to clients.
Technical Skills

Degree Description
1 Proficient in Microsoft PC applications, Strong basic mathematics and computer skills, familiarity with
common testing concepts, basic knowledge of HTML, web authoring tools, knowledge management
systems

2 Knowledge in areas like C#, C++, Java Enterprise Edition/AJAX, Microsoft NET, Visual Basic, strong technical
ability and logic, using software specifications, create, modify, test, update and maintain software code
3 Knowledge of requirements unique to healthcare industry, experience of establishing methodologies and
processes, implementation of projects, well developed skill sin Microsoft Transaction Server (MTS) XML,
ASP, Lotus Notes, ERP (Oracle, SAP, PeopleSoft)
4 Develop software test plans, ensure hardware-software compatibility, organize and label data, strong
design skills, knowledge of medical/healthcare systems, XML, UNIX OS, Shell, PERL, Solaris, Linux, Create
build scripts, VB6, HTM:DHTML/XML
5 Understanding of multiple testing tools such as Visual test, SQA, Silk Performer, knowledge of databases
such as SQL Oracle, MS Access, Familiarity with VB, ASP, ADO/OLE-DB, IIL, knowledge of testing FastCat
software using testing strategies such as regression testing, compatibility resting, functionality and
usability testing, use of both manual and automated testing

Innovation: The ability of an individual to create new products, methods, technology and ideas and

also the ability to modify existing products in a way that can meet customer demands in new and easier
ways, in other words it is the degree of inventiveness of a job.

Innovation too has been assigned the highest weight age of 25%, this is because in order to compete in
the market with large players FastCat was aiming to provide new cutting edge technology to their
customers, they were also planning to improve the implementations of their already existing products to
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provide solutions to the unique needs of their customers. So FastCat depends heavily on the ability of its
employees to think out of the box and provide new ideas.
Degree
1
2
3
4

Innovation
Description
Flexible, Open & Receptive to new ideas and approaches
Contributes new ideas in the daily tasks
Encourages contribution of new ideas from team members
Design, recognize & promote innovative software solutions

5 Anticipates new directions in technology

Communication: The ability of an individual to express himself/herself clearly to all stakeholders of the
company. The expression may be required in the form of written or verbal means to inform, describe,
explain, negotiate or complete essential job responsibilities. The stakeholders may be people within the
organization or people outside the organization such as suppliers, potential future employees,
government representatives, competitors, customers, etc.
Communication has been assigned the second highest weight of 15%, this is because the employees
need to communicate effectively with clients and physicians. If employees do not communicate
effectively with customers then they may leave FastCat and go to its competitors to receive better
customer service. If the employees are able to build relations with customers through affective
communication then customers will be willing to pay a premium for FastCats products. So it is the next
important factor after technical skills and innovation.
Degree

Communication

Description

Good written and verbal communication

Ability to communicate well at all levels - cross functional, Organization and Client levels

2
3
4

Ability to communicate well in technical environment


Communicate effectively and interact with cross functional teams
Excellent verbal and written communication skills at organization level

Interpersonal and Team Skills: Interpersonal skill is the ability of an individual to interact with others

properly and to get along with others while getting the job done. Team skill is the ability of an individual
to work co-operatively in a team.
Interpersonal and team skills has been assigned a weight of 15%, this is because FastCat is a flat
organization which focuses on innovation and hence it is essential for the employees to interact with
each other and with clients effectively and work effectively within a team. He weight is not as high as
innovation and technical skills since technical workers need to focus more on the products of FastCat.
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Degree

Interpersonal & Team Skills


Description

Work as a part of a team and assist team members

3
4

Willing to coach and share experience


Able to create a culture of empowerment and motivate team members to contribute to
the team
Provide supervision and direction to the team, resolve issues and break barriers within a
team, clarify roles and relationships within a team

Lead a team, facilitate coordination within a team, collaborate with other teams

Multitasking: It is the ability of an individual to perform multiple tasks at the same time and the ability
to prioritize work properly.

This factor has been given a weight of 10%, this is because FastCat focuses on efficiency and hence it is
important for its employees to prioritize their work in such a manner that they can provide speedy
solutions to their customers
Degree

Description
1 Ability to prioritize work

Multi-tasking Skills

2 Ability to accomplish multiple task simultaneously


3 Ability to adapt to changing priorities
4 Work on several projects as once

5 Ability to assist subordinates in prioritizing and scheduling of tasks

Analytical Skills: The ability of an individual to visualize, articulate conceptualize and solve problems by
making realistic and practical decisions from the available information.

Analytical Skills has been assigned a weight of 10%, the employees involved in technical jobs besides
being technically proficient also need to be able to understand the unique problems of their customers
and solve those problems by conceptualizing software which will tackle those problems.
Degree
1
2
3
4
5

Analytical skills
Description

Meticulous about detail


Ability to analyze and summarize data which will lead to improved software analysis
Analyzing Market data for FastCat products
Understand Client needs and behavior, provide technical solutions
Advanced market research skills, ability to use advanced packages, problem solving using technology
12

Administrative: The compensable factors for administrative jobs are as follows:

Communication: The ability of an individual to express himself/herself clearly to all stakeholders of the
company. The expression may be required in the form of written or verbal means to inform, describe,
explain, negotiate or complete essential job responsibilities. The stakeholders may be people within the
organization or people outside the organization such as suppliers, potential future employees,
government representatives, competitors, customers, etc. The two dimensions of communication are
Impact on Customer and Verbal and Written ability.
a) Impact on Customers: Involves negotiation and interacting with clients and building of strong
long term client relationships.
It has been assigned a weight of 20%.
b) Communication: Involves written and oral communication and presentation skills of a person.
It has been assigned a weight of 15%.

Communication has been assigned a weight of 35% for administrative employees. Communication has
been given the highest weightage since the administrative people are value enablers and being value
enablers their primary role is to support the value creators. Without proper communication skills this
relationship will not survive and it will hamper the ability of both the value creators and value enablers
to serve their customers.

Communication
Degree Impact on Customer
Communication
1 No/Little interaction with customers
Able to communicate effectively, both written
and orally, enter customer leads into database
2 Understanding client needs, need based
interaction, clarify the terms of contract
with clients

3 Demonstrate fastcat software to potential


clients,develop accurate input for client
proposals
4 Recognize and promote technical solutions
that will be useful to multiple customers,
conflict resolution
5 Proactive interactions with clients,
negotiation, establishing long term
relationship with clients

Good presentation skills, develop a


communication strategy for a specific product
to improve customer awareness and impact
sales
Communicate with team members, support
team decisions, influencing others to take
specific decisions
communicate with customers to gather
information and fully understand nature of
requests, negotiation with other departments
and customers
ability to build consensus on important
matters, conflict resolution

Problem Solving: The ability of an individual to understand and work through the details of a problem
and arrive at a solution.

13

Problem solving skills has been assigned a weight of 25% as this basic skill is required by all admin
employees.
Degree

Problem Solving

Description
1 Takes initiative to solve work related problems
2 Eager to learn continuously to find solutions

3 Encourage team members to provide multiple solutions

4 Resolve complex issues by collaborating with multiple teams


5 Solve client related issues in tight deadlines

Know-how: Know-how is the depth and breadth of knowledge that an employee must possess to carry
out his tasks. Know-how includes the educational qualification, experience and general knowledge
about the industry in which the company operates.
Know how has been assigned a weight of 20% for administrative employees. Knowledge is the
foundation skill of all employees hence it has been assigned a weight of 20%.
Know-how

Degree Description
1 Basic understanding of the healthcare field
2 Advanced knowledge of the healthcare field and knowledge of fast
cat software

3 Specialized knowledge in the healthcare field and knowledge of cross


functional fields
4 Cross functional knowledge in the relevant field,relevant experience
and knowledge of cross functional fields
5 Advanced level of cross-functional knowledge, professional
experience in industry

Team Work: Team skill is the ability of an individual to work co-operatively in a team.

Team Work has been assigned a weight of 20%. This has been given this weightage as it is very
important to work in tandem with the team.
Degree

Description

Team Skills
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1 Performs individual task, work with team members in the project

2 Promote co-operation within team members and with other teams

3 Takes initiative for sharing information with the team and collaborates with the team
members
4 Project Leader, Supervises the activities of the team members

5 Project Management , Serve as liaison between multiple teams

15

Internal Structure

Skill Based Evaluation - Value Creator Job Family


TECHNICAL

COMPENSABLE FACTORS
Factor

Weight

Technical Skills
Innovation
Communication

25%
25%
15%

Interpersonal &
Team Skills
Multi-Tasking
Analytical Skills
Total Score

15%
10%
10%

100%

Programmer
Analyst

Weight

Technical Skills
Innovation
Communication

25%
25%
15%

Interpersonal &
Team Skills
Multi-Tasking
Analytical Skills
Total Score

15%
10%
10%

100%

Project Leader

Software
Engineer

Technician

Degree Total Degree Total Degree Total Degree Total


2
50
3
75
4
100
1
25
2
50
4
100
1
25
1
25
2
30
3
45
2
30
2
30
1

15

60

15

15

10

20

10

10

10
165

20
320

10
190

TECHNICAL

COMPENSABLE FACTORS

Factor

BENCHMARK JOBS

Quality
Assurance
Analyst

BENCHMARK JOBS
Quality
Assurance
Analyst A

Senior Quality
Assurance
Technician

Degree Total Degree Total Degree Total


5
1
2

125
25
30

5
1
2

125
25
30

5
1
4

125
25
60

20

30

50

1
1

15

225

10

3
1

45

265

10

4
2

60

340

TECHNICAL

COMPENSABLE FACTORS
16

20

20
125

NON BENCHMARK JOBS

Factor

Technical Skills
Innovation
Communication
Interpersonal &
Team Skills
Multi-Tasking
Analytical Skills
Total Score

Weight

25%
25%
15%
15%
10%
10%

100%

Graphics
Designer

Senior Fellow

Software user
Interface
Architect

Degree Total Degree Total Degree Total Degree Total


4
2
2

100
50
30

1
5
4

25
125
60

3
5
5

75
125
75

2
2
3

50
50
45

20

40

30

10

1
1

15

225

10

75

355

30

4
4

60

405

40

Job Evaluation - Value Enabler Job Family


ADMINISTRATIVE

COMPENSABLE FACTORS

Factor
Know-How
Communication
Impact on
Customer
Communic
ation

Team Work
Problem Solving
Total Score

Weight
20%
35%

Marketing
Services
Representative
Degree
2

BENCHMARK JOBS
Marketing
Support

Software
Solutions
Consultant

Total Degree Total Degree Total


40
1
20
4
80

20%

60

20

80

15%

30

15

60

25%

25

50

100

20%
100%

User
Intrerface
Designer

40
195

17

40
145

20

340

1
1

15

180

10

ADMINISTRATIVE

COMPENSABLE FACTORS
Factor
Know-How
Communication
Impact on
Customer

Communication

Team Work
Problem Solving
Total Score

Weight

NON BENCHMARK JOBS

Administrative Administrative Administrative


Aide
Assistant II
Leader
Degree

Total

Degree

Total

Degree

Total

20%

20

20

20

15%

30

30

45

25%

50

50

50

20%
35%

20%

100%

Know-How
Communication
Impact on
Customer

Communication

Team Work
Problem Solving
Total Score

Weigh
t
20%
35%

20
140

20

40
160

60

80
255

ADMINISTRATIVE

COMPENSABLE FACTORS

Factor

20

Client
Account
Leader

Deg
ree
5

NON BENCHMARK JOBS


Clinical Liason

Total Degree Total


100

60

Implementation
Consultant
Degree

Total

40

20%

100

60

40

15%

75

30

45

25%

75

25

50

20%
100%

100
450

18

20
195

60
235

ADMINISTRATIVE

COMPENSABLE FACTORS
Project
Support
Assistant

Training
Assistant

Travel Coordinator

40

40

20

100

20%

40

40

20

80

15%

30

30

15

45

25%

50

50

25

100

Factor

Weight

Know-How
Communication
Impact on
Customer

20%
35%

Communic
ation
Team Work
Problem
Solving
Total Score

NON BENCHMARK JOBS

20%
100%

Visionary
Champion

Degree Total Degree Total Degree Total Degree Total

20
180

19

40
200

20
100

60

385

RECOMMENDED IMPLEMENTATION PLAN

We have recommended FastCat to use two structures separately (Technical and


administrative). The benefit of having two structures is that:-

1. It is the best way to ensure that all jobs are accurately described on factors that are
important and specific to the work within particular job structure.
2. It will enhance the communication between the departments of the organization. By
implementing this compensation plan FastCat communication will be enhanced because
the two job families will have employees that work closely within family.
3. It will help in equitable treatment among employees. Since similar jobs will be grouped
together and positioned according to the job level. Employees will not compare their
jobs with someone having different jobs
4. Since transparency and accountability will be present in compensation structures which
will ultimately result in employee satisfaction within the company and help the
companies increase the retention of their employees.
5. The employees will have a sense of commitment to FastCat and will be more
determined to increase their individual as well as group productivity.

Communicating Compensation plan to employees:-

In order for the plan to be effective, it must be communicated in a manner most accepted by
the employees. Because FastCat is a smaller organization, we feel that the most effective
communication should be passed down through the hierarchy and communicated directly
through the project leaders and heads of departments. This will ensure that the new job
structures are carefully examined and portrayed individually in a personal manner in which the
changes are most likely to be perceived.
Clearly communicating compensation plans to employees is worth the effort. It can lead
to harder-working, more loyal and satisfied employees. Explaining compensation to an
employee should be simple. The following are a few ideas on how to communicate your
compensation plan to employees:1. Pay Grades
We have designed the pay structure by looking at the positions in the company and identifying
such basic factors as education needed, tasks involved, skills used and abilities required. Then
positions are slotted into pay grades along with other jobs that are similar in scope and
responsibility. Developing a pay range makes compensation more clear because it delineates to
the worker what their base compensation will be and the potential for earnings growth within
the position. A transparent compensation model can make communicating with employees
somewhat daunting, because they might feel that they know better what positions belong in
which ranges, and have a hard time looking at their own position objectively. But, this type of
transparency works well because employees know immediately from the start what their base
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income is. This method of delineating and communicating compensation grades works for most
positions.
2. Compensation at the Start
Employees can be motivated by knowing there is a lot of room to grow in their industry or job
Position. The pay they start out at can be influenced by how much their base salary can grow.
For example, their pay may start low but have a lot of room to expand with experience. Or, if
more years of work wont make them better at their job, they may get their highest pay right
from the start. Its important that they understand this fact.
3. Identifying Wage Differentials
Wage differentials are those differences in wages between various workers, groups of workers,
or even differences between workers within a career field. For example, a worker with many
more years of experience than another worker, although both of their jobs require the identical
tasks, may make significantly more than a worker who is just beginning in the same field.
Although not always confined to experience, there are certain qualities in a worker
experience, education, certifications - that might create wage differentials within the same job
field. It is important, in some manner, to identify and document when a wage differential is
appropriate, so as to prevent both confusion and a sense of inequity on the part of those who
dont understand it. So what we did is, group of workers who have specialties on some skills on
which company relies on, we assigned compensable factors based on their skills. The
compensable factors can help set apart those who are considered more advanced in their
career expertise.
4. Benefit Summaries:The average employee has a very foggy view of what the business spends on their behalf for a
benefit.. How well do our employees understand their total compensation - the amount of
money spent on them by the company outside of base salary? To communicate total
compensation to employees, we are using what is sometimes referred to as an annual benefit
summary. What this summary does is provide a detailed list of costs incurred by the
organization to retain, train, support, and reward a member of that organization.. This tool is
useful for communicating compensation to employees, and sometimes eye opening for the
employee, especially when they see how much an organization spends on fringe benefits. Of all
the suggestions we have made to clarify and communicate the compensation plan to our
employees, the summary of benefits is perhaps the most straightforward. Beyond preparing a
summary, following points we have taken into consideration: Refining the compensation plans based on the positions that account for education, skills,
tasks and responsibilities in such a way that they make sense to an outside observer.
Explaining the benefit packages in a manner that reminds employees that they are not
intrinsic to the position itself.
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Assigning an HR professional or accounting professional, to explain compensation plans to


employees. This not only increases the employees insight into what their company provides
them, but also provides the resourcing professional a chance to gauge the current applicable
compensation plans against various job niches and titles.

The generic system will be sent out both electronically and in paper format to all employees in
its entirety and each employee will receive a copy of the evaluation conducted for their position
so they are fully aware of the results. The HR department will distribute the completed copies
to every employee with an appointment card providing them a time to come in and receive the
evaluation breakdown specific to their current position from the HR department.
By following these steps, FastCat ensures that employees understand the system as a whole, as
well as individually. Allowing them to ask questions and review the system will assure the
acceptance of the plan throughout the organization, and will allow for a smooth transition into
the new program.

Reliability and Competitiveness:-

The FastCat compensation plan is specific to the organization. Managers will re-evaluate the
plan at arranged intervals to ensure its continuing effectiveness within the evolving
organization and to maintain fairness. Taking previous information that is still valid which
meets the companys goals and revising them will not only provide ease of gathering
information, but will ensure that they are more specific in detail. This will benefit the company
because it will be continually evaluated to ensure FastCat maintains competitive wages by
prioritizing positions within the company that are most important to achieving the companys
objectives, strategy and goals.

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IMPLEMENTATION PLAN
Implementing the new structure cannot be process just said and given away. It needs majorly
administration and should be explained the process with complete clarity and prove to be bestfit for the employees. It must be administered with not just clarity but taken care of its
applicability and uniformity throughout.
Thus to look into administration and fit the same that the Employees Manual must be
distributed to act as an aid to the organization and exemplify the vision of the compensation
strategy of the organization. The plans compensable factors are to be derived from alignment
with strategy and industry benchmarks. Emphasis is put into factors specifically important to
job descriptions.
To provide the importance of the impact of the plan it needs to be communicated to the
employees. We know FastCat is a small organization, the most effective communication cab be
communicated directly through the project leaders and heads of departments. This will ensure
that any new job structures are carefully examined and portrayed individually in a personal
manner in which the changes and knowhow of the plan can be conveyed.

It is necessary to understand the job descriptions and analysis to gain the clarity throughout
the life of the organization, as there are regular changes any organization faces with time. As
there is focus on the external environment and the job inside we should not be so focussed that
we do not consider about the employees individual skills and thus disturb their satisfaction in
their working in the organization.
We need to use these strengths and capabilities for the future by adding to the benchmarked
compensation plan and keep it flexible enough to be customized as per the need.
A lot of managers in the organization like line managers being the front facing role of the
management and undergo a lot of training thus are expected to let the plan being flexible to
handle any change.
We need compensable factors which can be openly and easily applied to a wide proportion of
employee population. As our learning from the class focuses we need to identify and create the
compensable factors such that we need to focus on the maximum population of the
organization to fall into the defined and designed compensable factors for the employees. We
cannot consider the structure to be seen by the employees to be too dynamic in its structure as
our focus is on the defining of compensable factors for employees to feel associated and relate
to it.
We know that our organization is continuously growing and changing and thus the structure
should be such that the entire current and future employees associate with it well.

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Manual

We divided the positions in the company and came out with compensable factors under
Administrative and Technical Skills. Two systems are required due to the drastic differences
between the jobs offered by FastCat and the skills necessary to succeed in these positions. The
great majority of jobs fit well into one of these two categories, eliminating the need for
additional categories. We found the compensable factors as the one in which the maximum
roles could fit it and thus defined the percentages as follows:

These factors under Technical Skills as: Innovation (25%), Technical Skills (25%),
Communication (15%), Interpersonal and Team skills (15%), Multi- Tasking (10%) and Analytical
Skills (10%). And Under Administrative Skills as: Know How (20 %). Communication (35%,
divided amongst Impact on customer (15%), Verbal and writing ability (10%)), Team Work (20%)
& Problem Solving (25%).
Technical Job family

COMPENSABLE FACTORS
Factor
Technical Skills
Innovation
Communication
Interpersonal &
Team Skills
Multi-Tasking
Analytical Skills

Total Score

Weight
25%
25%
15%
15%
10%
10%

100%

COMPENSABLE FACTORS

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Factor

Weight

Know-How
Communication
Impact on
Customer
Communication

20%
35%

Team Work
Problem Solving

20%

Total Score

20%
15%
25%

100%

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SUMMARY AND RATIONALE


FastCat has grown to a 200 employee company to be able to serve the growing market better. An
analysis of the market conditions and the strategy of FastCat made us come up with the objectives. The
objectives are aligned to their strategy, as mentioned in the strategy and objectives section above. Thus,
the above compensation plan meets the objective of FastCat becoming the leader of creativity and
innovation, promoting communication internally and customer focus. By rewarding behaviors associated
with innovation, the organization aligns its compensation system with this strategy and profits from the
flexibility of its workers. Furthermore, FastCats compensation efforts will gear employees efforts
towards a cooperative, teamwork oriented environment. This will prove to be a valuable tool as the
organizations marketing efforts and research regarding customer needs will have to be communicated
to the engineering department on a continuous basis in order improve customer satisfaction while
maintaining the leading edge in product offerings. As FastCats compensation system meets and
exceeds those of its competitors, the brightest and most talented individuals will be attracted to what
the organization can offer to them in return for their work and will ease FastCats recruiting and
retention efforts while maintaining an innovative pool of employees. FastCat also sees the need in
developing a knowledgeable workforce. In turn, a more knowledgeable, helpful workforce translates
into a more knowledgeable and delighted customer. Therefore, the compensation objectives will aim to
retain employees and promote from within, allowing the organization to benefit from the positive
implications of a well-developed workforce that truly knows the company.
The Pay structures have been defined in such a way that value enablers and value creators have been
clubbed into different pay structures. This helps FastCat achieve its objective of being fair to employees
and makes sure that these jobs are valued equitably. The compensable factors for both these pay
structures differ so that they balance the factors that are important for these jobs. This becomes more
accurate because of the job positions entail different compensable factors for each the family. Apart
from this it is important for FastCat to make sure its employees view this plan as fair for which
communication is the key. Therefore, an extensive communication plan at all levels will be taken up in
such a way that the managers convey the factors to the subordinates and team.

Also, we have focused on the other objective of fostering communication in teams. To break the silos
and improve the team work in the organization as it grows bigger, the compensation plan values team
work. This has been valued at all levels so that the culture of cohesion and team spirit can be imbibed in
the organization. The new people joining the organization and the existing employees alike will be
motivated to coach, mentor and bond in the team.
Customer focus is a prime objective for FastCat as it competes with big players in the market. If it has to
grow fast and maintain the niche area it serves, an excellent customer satisfaction is must. Thus
customer centricity has to be built at every level and for both the job families. Since the job families
differ in the way they interact with the customers, the compensable factors have been designed
differently for both.
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This system will effectively support the objectives of the company by creating an equitable working
environment designed to increase motivation and foster fresh thinking. Survival in a high growth
market, that is so competitive mandates that innovation and creativity are valued more. This is another
area that the compensation plan focuses on.

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