We recommend a single internal structure that includes all job families, and uses the same job point evaluation plan to evaluate all positions. The single structure will allow us to evaluate employees on an equal level and it will be easier for the employees to follow. The job point evaluation consists of a grand total one thousand points with 25% weighted towards Education, 20% weighted towards Experience, Technical, and Creativity/Innovativeness, and lastly 15% weighted towards Skills & Abilities.
The recommended internal alignment for FastCat would be to have a single structure based on compensable factors relevant to their success. Each factor has different levels based on the requirements needed for the factor. For example, there are only three levels for creativity, while there are five levels for experience (Refer to Exhibit 1 in the Job Manual). This allows FastCat to cover the entire company with the factors chosen, yet still be specific enough for the individual jobs. This design will help FastCat direct employee goals towards company goals, and still be fair to the employees. It also will help FastCat be more cost-effective, in that the jobs will be thoroughly evaluated based on the levels they receive for each factor. There are five factors chosen to be the most important for FastCat they are: Education, Experience, Technical, Creative/Innovative, and Skills & Abilities. The first factor, Education, was chosen because of FastCat’s need for highly educated people.
The software that FastCat designs calls for specific knowledge that a degree can provide. Experience was chosen because of its importance to FastCat. Almost every job at FastCat requires at least some experience in that certain area; therefore experience was deemed extremely important for FastCat. Technical ability refers to the amount of impact an error would make for FastCat. For example, an Administrative Assistant miss-spelling something will not have a huge impact on FastCat’s business, however, a Technical Marketing Consultant going after the wrong segment will have a profound impact on FastCat. The Creative/Innovative factor for FastCat is also extremely important. The mission statement for FastCat even states that “We must produce innovative, high-quality solutions.”
Last, Skills & Abilities was chosen because of the range that the factor could cover, as well as the fact that we can select the most important items relative to FastCat. This internal alignment will allow FastCat to strictly define some factors, while leaving other factors more loosely defined, in order to support employee development. This system will also be extremely simple for employees to follow, and to see the way that the system has been set up, in order to ensure fairness. The structure will also be similarly easy to administer, as well as to communicate to employees. It will be easy to administer because the jobs are already evaluated, and will not change anytime in the near future. Another reason why it will not be difficult to administer is because employees will be able to see the differences in pay, and why they are the way they are. The recommended way of communicating this plan to employees is by giving each employee a copy, and then holding several small meetings in which employees can ask questions about the new structure.
Rationale for Recommendations
The recommendations we proposed for FastCat will benefit the company for its future success, and will help the company regain its competitive edge, while also achieving its compensation objectives. The first recommendation is for FastCat to use a single internal structure. Since the company is currently undergoing some restructuring, this system will be easy to help reorganize those departments, and it provides for a much less bureaucratic working environment. Also, a single internal structure will allow for better management because rather than having the manager’s focus on trying to organize and understand two or more structures; they can simply focus on one. Second, we recommend that FastCat use a job point evaluation system. By using this point system the company can clearly state what they feel are important skills, and can place a numeric value to them. This way the most qualified employees are easily identified, and the employees can be correctly compensated for their work. This system will also help direct employees towards FastCat’s objectives.
Lastly, we recommend that Fast Cat include five compensable factors that will help the company get back in all consumers’ evoked set. The five compensable factors we recommend would be Education, Experience, Technical (error), Creative/Innovative, and Skills & Abilities. To help Fast Cat in its future success they are going to need highly educated people who have the experience in the market, but make little technical errors in doing their job. Also, they will need people who are creative/innovative to help create new products, but these people must also posses the skills and abilities necessary to complete their job. This system will also help direct employees towards FastCat’s objectives. By placing emphasis on creativity and technical ability, FastCat can direct employee behavior towards their objectives. Overall, these recommendations will help Fast Cat achieve their compensation objectives, because the single internal structure is easy to understand and organize, the job point evaluation and compensable factors will help to select the correct amount of compensation for each job.
However, while there are many benefits to these recommendations there are some risks associated with them. Listed below you will find some of the risks, and potential solutions for the risks, associated with the proposal for FastCat. Risk 1: Since it is recommend that FastCat use a single internal structure some employees may feel they will not be recognized for achieving certain goals. Potential Solution 1: FastCat can have some other ways of recognizing employee’s when they achieve goals. For example, FastCat having Employee of the Month, Profit Sharing, Gain Sharing, or just recognition for employees by management or the President of FastCat. Risk 2: Managers and/or employees may feel that it is not fair to place them on the same level as non-managerial or managerial employee. Potential Solution 2: Explain to employees how the point system works, and why they are on the same level. Especially emphasize the Skills & Abilities Level 2 and above Ranks, where managerial skills are listed. This will show the employees that FastCat is paying more for managers.
However, there may be another factor that places the employee and manager within the same point range. Risk 3: If an employee ranks high on the job point evaluation then he/she may feel as if they are indispensable. This could cause them to not be focused or to slack off on their responsibilities. Potential Solution 3: FastCat could occasionally remind employees that their compensation is based on the fact that they are doing their job. If an employee believes he/she is indispensable, and therefore either slacks off or becomes not focused; then maybe FastCat should remind them of employment at will. Risk 4: Since FastCat does value creativity and innovation, employees who are in positions where creativity and innovation are not needed could feel that any ideas they do have would not be very important.
Potential Solution 4: FastCat could have a suggestion box, or encourage all employees that have an idea to tell their superior. FastCat would need to tell employees something to the effect of: there are no bad ideas, just ones that are not yet developed. This would encourage employees to voice any ideas they have, and feel like their ideas are valued. Overall, our recommendations provide more benefits than risks to the company, benefits such as: helping FastCat to be successful in the future, helping the company regain its competitive edge, while also achieving its compensation objectives. However, as with all things, there are some risks, but as long as FastCat is aware of those risks and handles them promptly they should have no problem succeeding using our recommendations.