GROUP 3: ANKITA SHARMA-121309 HEMLATA JESWANI-121321 PREETI NERLEKAR-121337

ABOUT: Paper and wood products Market leader Large diversified group

INDUSTRY: Cyclical industry Competitive Highly capital intensive

WILLAMETTE INDUSTRIES
ORGANISATIONAL STRATEGY: -Integration and self sufficiency -Quality focused -Low cost

ORGANIZATIONAL CULTURE: -Autonomy -Employee oriented -Good to shareholders

PAY PHILOSOPHY Attraction

Retention

Lead or match the market

PAY ASSESMENT Seniority

based

Behavior based

PAY FORM

Monetary benefits Non-monetary benefits

 Decentralized

PAY PLAN DESIGN

Dynamic

Total Rewards
Total Compensation Cash Compensation Base Pay Benefits Retirem ent plans Stock Purchase Options Relational Returns Chall engi ng Work Learni ng Oppor tuniti es

Employ ment Security

Merit Pay

ORGANISATIONAL STRATEGY..

COMPENSATION STRATEGY..

Customer centric Quality focused Low cost

No per sale incentive

No short term incentives

Why long term incentives ?

Why not short term incentives?

Inter dependent nature of industry Cyclical nature of the industry. Capital intensive with long term investments. Encouragement of long tenure of the employees. Easy to understand and administer.

Conflicts between different business units. No individual control. ROI cannot be measured in short term. May bring in a feeling of insecurity and instability. Difficult to measure individual employee performance.

 With

the pressure for incentive pay growing from outside the organization; should it redefine its pay practices?

 The

organization should not redefine its pay practices.. Why should it not do so ? a) The nature of the industry does not support the pay practices followed by the competitors. b) Employees are satisfied with the current compensation system.

 Maslows

hierarchy theory

Herzberg Theory

Hygiene Factors

Satisfiers

 1. 2. 3. 4. 5. 6.

Principles of Dynamic Pay

Aligning of compensation with the organizations culture, values and strategic business goals Integrate pay with other people process Democratize the pay process Demystify compensation Measure Results Refine. Refine again. Refine more

There is no one size fits all strategy Short term incentives are not always the only way to motivate employees The alignment of compensation strategy to the corporate strategy is a key determinant in the success of the organization.

When changing its compensation strategy, an organization should consider both internal and external factors affecting it.