FastCat

Compensation Plan

Happy Employees…Make Happy Customers!

Submitted by:

Ethan Becker-Menditto Amie Brady

Chao-Ching LienUlises Mariona

Carl Pitt

3/10/2013

Table of Contents

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

BUSINESS STRATEGY..............................................................................................................................................3

COMPENSATION STRATEGY................................................................................................................................3

INNOVATION................................................................................................................................................................3

COMPENSATION OBJECTIVES......................................................................................................................................4

POLICY RECOMMENDATIONS.............................................................................................................................5

FLAT STRUCTURE........................................................................................................................................................5

JOB-BASED PLAN........................................................................................................................................................5

MULTIPLE PLANS........................................................................................................................................................6

SINGLE PLAN..............................................................................................................................................................6

SAMPLE OF STRUCTURE..............................................................................................................................................7

MANUAL.......................................................................................................................................................................8

COMPENSABLE FACTORS......................................................................................................................................9

BLANK SAMPLE.......................................................................................................................................................14

USE OF THE BLANK SAMPLE.....................................................................................................................................15

THE PLAN..................................................................................................................................................................16

IMPLEMENTATION.....................................................................................................................................................16

COMPETITIVE ADVANTAGE.......................................................................................................................................17

DIRECTION OF THE COMPANY..................................................................................................................................17

Executive Summary:

1

Fab 5 Consulting, Inc. has devised a plan, a compensation system that supports FastCat’s

business strategy, values, and other Human Resource (HR) systems. It promotes productivity

because it compensates employees based on their knowledge, skills, and performance in the

workplace. Implementing multiple plans will allow the company to meet all of the compensation

objectives. For that reason, we recommend a Job-Based plan as well as a online promotional

plan. Pursuing a loose strategy will allow flexibility within the organization. Furthermore, we

recommend pursuing a flat structure to complement the previous recommendation and to

promote teamwork and collaboration. We have constructed a manual to evaluate the value of

each job and to help determine the pay for each position. We chose the five most important

compensable factors driven to meet the company’s goals while creating rewards and incentives

for employees to promote desired behavior. The five compensable factors will be weighed as

follows: Education/Experience (20%), Innovativeness (20%), Teamwork (20%), Technical

Requirements (20%), and Responsibility Requirements (20%). Upon acceptance of proposal,

implementation will begin at the staff conference held at a later date. Further details about the

points highlighted in this summary are included in the following sections.

Business Strategy:

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Fab 5 Consulting, Inc. has constructed a compensation plan to increase employee satisfaction,

create incentives, and maintain cohesion through collaboration within the workplace with the

appropriate plan set forth. In congruence with innovative technology, superb communication,

and a motivated workforce, this company will be able to compete efficiently and effectively.

With that is mind, we recommend using a differentiation strategy. This strategy will promote the

highest levels of: education/experience, innovation, responsibility, technical knowledge, and

teamwork in the workplace.

Compensation Strategy:

It is our goal to add more value to the organization by attracting and motivating employees at all

levels. It is extremely important that this compensation strategy is based on internal alignment

throughout the entire organization because it will create cohesion and create incentives for

FastCat employees to strive to do their best. It is our plan to promote productivity by rewarding

employees based on their knowledge, skills, and abilities (KSAS) performed at the

workplace. This will inspire a rapid innovation of workers, the key to this organization’s

success, which will enable the company to continue to compete effectively within the healthcare

industry and retain its employees as well.

Innovation:

Innovation is one of the top compensable factors for FastCat because it is pivotal for the

company to drill deeper with its existing clients and attract new clients. FastCat values its

employees and understands that they are like the bread and butter of the organization. Engineers

that can come up with better and unique products can help them satisfy their customers base and

expand as they hope, surpassing their already great reputation. Further, interdepartmental

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relationships are also significant; therefore, teamwork will be another important factor that is

stressed. It is imperative that the engineers and the marketing department work well together to

minimize problems and better serve the clients’ needs, especially since the right products must

be produced for the right target market. Both of these factors are congruent with the strategies,

work, and values of the company. They are also consistent with the recommended objectives.   

Compensation Objectives:

1. We plan to emphasize the importance of innovating high quality products to satisfy current

and potential client base to maintain reputation. We will achieve this by rewarding performances

proven to commit to its customers with high-value software on time and on budget.

2. Attract, retain, and motivate top talent. We will achieve this by maintaining the corporate

culture and values throughout the organization. Additionally, we will promote from within the

company before hiring outside parties to maintain unity.

3. Highlight a direct relationship of pay to personal, team, and FastCat‘s performance. We plan

to achieve this through recognition of performance excellence and learning achievements.

4. Promote internal equity. We plan to achieve this by widely communicating the organization’s

compensation practices so that they are clearly understood. Consultation and online material will

be available, if necessary.

5. We aim to cut fixed and variable costs by identifying different levels of responsibility and

accountability and adjusting costs accordingly.

Policy Recommendations:

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We recommend pursuing a loose strategy for many reasons. First, a loose strategy will allow

flexibility within the company. Due to the need to be innovative and pursue new upcoming

products and services, this is vital to the growth of the company. Second, a loose strategy will

allow the company to develop new objectives and adjust the proposed plan as the organization

may change over time. In contrast, pursuing a tailored and tight strategy would limit the

company because it would deter empowerment because employees would be unable to make

decisions as they feel necessary. In turn, this would also limit an employee’s innovativeness.

Further, a tightly tailored strategy would give more precise instruction of what, how, and when to

do things; systematic directions are not conducive to the innovative and expansive business

strategy of FastCat. Innovation requires out of the box thinking and at times risk-taking, so a

loose strategy aligns best with FastCat’s current business strategy.     

Flat Structure:

We recommend pursuing a flat structure because it supports fewer levels, equal treatment, teams,

and cooperation. All of these factors are important for a company that pursues innovative

projects. Additionally, this will reduce the levels of management employees must go through to

get an answer in regards to moving forward with projects and decisions and/or time sensitive

activities. A flat structure also complements our previous decision for choosing a loosely

tailored structure as well.

Job-Based Plan:

The process that we chose is the job-based plan, plus an innovative online promotional plan. We

chose this because we felt that this specific plan would help the company cut costs since it allows

the company to pay for the specific jobs, rather than the person. Additionally, this will promote

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fairness among the employees and enable the company to pursue its organizational strategies

simultaneously.

Multiple Plans:

There is some relevance in the jobs but also differences; therefore, we recommend implementing

multiple plans instead of a single plan. Multiple plans support the current strategy and will allow

the company to be more responsive to changes that FastCat is experiencing. The purpose is to

support and align the organizational goals. At FastCat, different job families in the organization

will have different motivational factors. For that reasons, by having multiple plans FastCat can

evaluate each job and motivate each employee in different ways based on their job descriptions.

Single Plan:

We considered implementing a single plan at first. However, we determined that a single plan

would limit motivation and group jobs together that should not be grouped. Although the

organization has some breadth of work… tasks and duties still vary. Additionally, single plans

do not make distinctions between job and responsibilities. As a result, this would limit FastCat

employees from acquiring new skills and wrongly discourage innovation.

Sample of Structure:

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Engineering Marketing Administrative Technical

Project Leader230 pts

Client Account Leader230 pts

Senior Fellow230 pts

Senior Quality Assurance Technician220 pts

Software Developer200 pts

Graphics Designer200 pts

Visionary Champion210 pts

Quality Assurance Analyst A150 pts

Software User Interface Architect190 pts

Software Solutions Consultant160 pts

Administrative Leader160 pts

Quality Assurance Analyst140 pts

Usability Engineer180 pts

Marketing Service Representative140 pts

Green Guru130 pts

Implementation Consultant110 pts

User Interface Designer170 pts

Marketing Support100 pts

Administrative Assistant II110 pts

Technician90 pts

Training Assistant110 pts

Administrative Aide90 pts

Project Support Assistant80 pts

Travel Coordinator70 pts

Manual:

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1. Conduct Job Analysis: Top Management will be responsible for collecting and comparing

information for each position in regards to the job content for the specific jobs in their

departments to implement to current plan.

2. Determine Compensable Factors: To complement our strategic goals/ compensation

strategy, we are implementing that the competency sets will be innovation, technical knowledge,

education/ experience, team orientation, and most importantly responsibility.

3. Determine Scale & Weights of Factors: Each competency set will be worth twenty-percent

out of one-hundred percent. Further, the point value associated will each degree (1-5) will be 10,

20, 30, 40, and 50, respectively.

4. Communicate Plan & Train Users : We will use the manual to help guide the process of

implementation and to communicate our rationale for the pay levels of each position. Then,

additional materials (Powerpoints and reference guide, etc.) will be distributed to each employee

and will also be available online to increase the understanding of this plan. Lastly, each

employee may request additional information, materials, or training, if necessary.

5. Evaluate Effectiveness of Plan: We will conduct an employee survey of understanding,

procedural justice, and outcome justice of the compensation plan. We will also actively

communicate with the head of each department and gather feedback at all levels of the

organization. Further, we plan to explain the process for resolving disputes and appeals as well.

This plan is simple and easy to implement, which will also allow flexibility to make any

necessary changes for future changes within the organization.

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Compensable Factors:

(20%) – Innovativeness Requirement refers to the self-motivation that the employee distributes

to work.

Degre

e

Innovativeness Requirements

1 Employee performs routine tasks with limit or no innovation required.

2 Employee performs required work with knowledge of the organizational process,

but with limited innovation needed to perform job duties.

3 Employee possesses critical thinking skills, such as the ability to understand theories

that are more complex and the ability to assess, evaluate, and implement theories

and processes. Employees are actively involved in tasks that require moderate levels

of innovation.

4 Employee abilities include challenging assumptions and effectively communicate

advanced work process throughout the organizations. Must demonstrate high levels

of critical thinking/reasoning and innovation is frequently used.

5 Employee demonstrates leadership qualities in regards to innovation, has the ability

to identify and solve current and potential problems that arise. Must possess superior

critical thinking/reasoning skills and demonstrate leadership qualities. Innovation is

essential and used multiple times throughout the day.

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(20%) – Education/Experience refers to the quality that the employees familiar with the job

offered as well the experience that the employee posses for the position.

Degre

e

Education/ Experience Requirements

1 High School Diploma/ GED, Minimal Related Experience

2 Associate’s Degree 1-3 Years of Experience

3 Bachelor’s Degree w/ 1-3 Years of Experience

4 Bachelor’s Degree w/ 4-7 Years of Experience

5 Master’s Degree or Bachelor’s Degree w/ 8+ Years of Experience in computer

science, business, or related field

10

(20%) – Team Work Requirement refers to the ability to perform in a work-related team

Degre

e

Team Work Requirements

1 no requirement to perform in a team

2 ability to perform in a team with collaboration

3 ability to lead a team and assist to other team members

4 ability to lead a team and assist to other teams

5 ability to lead and control multiple teams in the organization

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(20%) – Technical Requirement refers to the ability to work on specific technologies in order

to perform the work.

Degre

e

Technical Requirements

1 Proficiency with MS software such as Word, Excel and Power Point

2 Advance use of MS software plus the ability to function web components.

3 Advanced functioning in wed components plus solving technical issues

4 Advanced using in existing technologies to conduct the analysis and edit program

5 Create and maintain program while updating existing program

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(20%) – Responsibility Requirement refers to the responsibility scale that the nature of job

provides to the employees

Degree Responsibility Requirements

1 Operation level that reports directly to one manager

2 Operation level that reports to multiple managers as needed

3 Lower managerial level that assist to the operation in a proficiency way

4 Middle managerial level that operates one function while supporting other functions

of work

5 Upper managerial level that making decisions and strategy of the organization

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Blank Sample:

Job Title:

Competency Set Weight Degree 1 Degree 2 Degree 3 Degree

4 Degree 5 Total( W * D)

EducationExperience 20% 10 pts 20 pts 30 pts 40 pts 50 pts

Innovation 20% 10 pts 20 pts 30 pts 40 pts 50 pts

Knowledge 20% 10 pts 20 pts 30 pts 40 pts 50 pts

Team Work 20% 10 pts 20 pts 30 pts 40 pts 50 pts

Responsibility 20% 10 pts 20 pts 30 pts 40 pts 50 pts

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Use of the Blank Sample:

To align with our new compensation structure with organization strategy, FastCat should first

determine the essential job functions before implementing the job-based pay system. Despite the

old structure, new compensation will be the base pay, plus a bonus. Different functions will

have different market-driven base pay with related innovation bonus to those innovated

employees. Each function will have the innovation bonus in two ways. First, the innovation

check will attach onto its job performance routinely. An increasing of the innovation point will

direct add to its rewarding paycheck. In addition, the innovation bonus that encouraged for

functions. For example, the technical function will have its considered base pay plus the

innovation bonus on qualified problem-solving excellence, while administrative function will

reward the employees on process-solving excellence. On the other side, marketing functions will

reward to the successful marketing campaign by highly retaining on the brand loyalty.

Engineering function will establish its bonus on program-development excellence. The

evaluation is open to managerial level for further encouraging action. Taking consideration of

non-asset reward, FastCat will recruit internally to satisfy the position needed in time. Further,

the managerial job offering will be considered internally as one of the non-asset bonuses prior

open to the market. All other non-asset bonuses may reply through announcement.

Appeals Process:

The appeal process will apply when employees have any concern or question about the reward.

File the necessary documentations directly to the managerial level is required. Base on the

materials provided, the manager has the responsibility to either answer the concern in detail or

report to the HR department for more details. To avoid the play of favoritism, employee

deserves to file the second-time concern direct to HR department. For those who filed the

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concern to HR, HR has the authority to classify the investigation. Also, the false concerns will be

added to job performance. Employees who file a claim directly to any other authority before

filing to manager will also result a mark on job performance.  All appeal process has to follow as

listed above. There is no exception.

The Plan:

Our decisions will help FastCat to generate solutions for its customers because it allows our

employees to think creatively and innovatively to figure out solutions for consumer demands.

They will help us compete in the market because we are stressing the importance of high-quality

operations and services. We are letting our employees be creative and come up with new ways

to make our product and services better. This helps to motivate our employees to want to be

better and adds value to our organization. Our plan also aims to cut costs and expenses, which

allows re-invest more money in the innovation of our software systems and foundation. This

plan signals our company’s values because it stresses employee rewards and incentives based on

innovation and teamwork.

Implementation:

This plan will be administered via staff conference at a date to be determined. There will also be

an email sent out about the upcoming plan. Management and HR will also be available to field

any questions or concerns about the plan. This plan will be maintained over time by monthly

employee performance reviews with thoughtful recommendations for any employee

improvement that may be needed. This plan is able to handle new jobs as they are created. We

will gain an understanding of the plan by highlighting the goals of FastCat and how each

employee is needed for the company to be successful. We will gain acceptance by creating a

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sense of value and fairness in our plan in the eyes of our employees. Managers should consider

our recommendations because they can help motivate employees to put more effort into their

work and improves productivity. This plan provides fair incentives to employees that entice

them to think creatively and bring their own personal thoughts to the table.

Competitive Advantage:

It is our intention to promote long-term relationships and an outstanding rapport with clients and

customers, not only in excellence of service/innovative technologies, but by rewarding the

desired skills and performance. With that in mind, we recommend focusing on the triple-bottom

line. This is extremely important when considering the rapid increase in technology and intense

competition. For these reasons, we feel that focusing on a increasing employee satisfaction is the

upmost importance and will also result in having a satisfied customer base. Hence, Happy

employees make happy customers.  

Direction of the Company:

We feel that ease of administration could be a potential issue of this new plan. It could be hard

to get employees to understand that they are being evaluated based on innovation and teamwork

requirements. However, to mitigate this problem, we have HR representatives that employees

can go to with further questions about this new plan. Managers will also able to be available to

discuss the specifics about performance evaluations and potential improvements. Further,

employees may also seek answers online at their own convenience. Based on our

recommendations, we believe that FastCat will be able to deliver exceptional products and

services to its clients and customers, while empowering its employees with a competitive, yet

affordable compensation plans.

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