Fast Cat: Phase 3 Essay

2870 Words Oct 21st, 2013 12 Pages
Compensation structure for FastCat

Executive summary
In Phase I we looked at the descriptions of sample jobs at FastCat and proposed a structure for the jobs based on the concepts of internal equity and organizational objectives of innovative product design, improved marketing and cost competitiveness. Based on the content and value of the job descriptions available we had created a tailored and hierarchical structure, which supported the organization strategy, work flow and motivates behaviour towards organization’s objectives.
In Phase II we ensured external competitiveness by analyzing the external market survey data on total compensation and pricing FastCat’s structure in accordance with it. We mapped FastCat’s jobs with
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Merit Pay
a. We were already lagging behind the market to begin with. Unless we give an increase in the basic we might lose the high performers to the competitors in the market.
b. Since we have a very well defined job description for each of the employees, measuring individual contribution against the expectations of the organization would not be difficult. Hence implementing merit pay to reward exceptionally performing employees would not be a difficult proposition. 2. Bonus through Profit Sharing
a. Bonus through Profit Sharing treats the entire organization as one unit. Since everyone shares the company’s performance, there is increased motivation for collaboration among the different departments of the organization.
b. The overall profit would be a function of the customer’s satisfaction level. Hence a profit sharing based bonus would ensure that the employees keep the interest of the customers in mind while designing or implementing the software.
c. This will also ensure that employees seek for more innovative products and more profitable geographies to increase the net profit.
d. Since this is a variable pay and not a permanent increase, it does not ensure a long term commitment and is not reflected in the fixed costs of FastCat.

Assessment of Current Salaries
The salaries of 25 FastCat employees were analysed based on their compa ratios, and the grades and ranges that were
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