Executive Summary
Our recommendation for FastCat is a flexible structure that will assist in helping us attain our objectives. To achieve these objectives we suggest four job families: administration, project management, software, marketing and quality assurance. We suggest a job-based internal structure for all departments as it best suits the overall objectives of the company.
Recommend Strategy and Objectives
FastCat’s essential objectives include striving to constantly improve performance through generating revenue, maximizing profits, and achieving optimal customer satisfaction; reducing employment costs; providing motivation to employees; maintaining legal compliance; ensuring a competitive advantage in the industry with its compensation model. With these established goals, the internal structure is designed to support the objectives.
The structure will provide flexibility in terms of which each department reports to in the upper levels. This implies that broader roles are assigned to employees aligning with the objective of providing employees more discretion. Broader roles indicate that employees take on a variety of responsibilities and are trained in different aspects. This in turn will create increased versatility and productivity in each employee’s performance hence decreasing employment costs. This flexible structure will support autonomy and empowerment amongst employees to generate positive employees’ work ethic and innovation thus increasing motivation. Innovation is a central component to contributing to success shown through performance and customer satisfaction.
Creating a flexible structure enables employees to gain autonomous control over their work because they will be reporting to less layers of the organization to constantly gain approval for their performance. This will lead to more efficient processes in the company in hopes to provide customer satisfaction to increase profits. This loosely coupled structure will also allow for constant innovation and change in the company so it can keep up with industry trends and stay competitive.
Adaptation is crucial for achieving objectives. Complying with not only legal laws but offering justice in employees’ perception is important. Demonstrating procedural and distributive fairness in the treatment of employees and the compensational pay model is crucial. With a flexible job structure, it supports this because clear job descriptions are given but at the same time, innovation is valued and therefore rewarded.
The fact that the system is difficult to imitate establishes competitive advantage. To compliment this flexible layout is the flat organizational structure. It will aid in succession planning and provide a comprehensible overview of how FastCat is divided into departments to portray a flatter organizational structure. Embracing a less hierarchical structure values the differences in individual employee skills, responsibilities, and contributions to FastCat.
Internal alignment defines the relationships between the jobs within FastCat. This is the most crucial component to support the organization’s strategy and workflow to achieve objectives. Employees need to view the compensation as fair in order to be motivated to translate their performance into positive outcomes. Integrating a flatter organizational structure supports FastCat’s strategy of continuously maintaining employee motivation through innovation and adaptability.
Each layer of the organization is compensated accordingly by observing the required knowledge and skills an employee is expected to possess. This ensures fairness while maintaining individual creativity and innovation. The flatter organization is to encourage an innovating mentality across the whole organization. Striving to meet all the objectives through establishing a less tailored and hierarchical structure will help achieve the overall internal alignment strategy.
Recommend Internal Structure
When designing and developing a compensation system, in order to ensure success the compensation plan must align with company objectives. Fast cat is an innovative company that relies on critical thinkers, analytical personal, problem solvers, and are successful based on the overall organizational commitment of their employees. The process used to design a successful plan for Fast cat started with aligning the organizational objectives with a compensation strategy.
The final outcome of the compensation plan is a job- based structure using key elements of both job value and job content to determine compensable factors, weights, and degrees for the point method of evaluation. By analyzing the job descriptions a final decision could be made to determine overall weights of compensable factors based on value and importance to the company. The levels of degrees were formulated to allow for possible pay grades to be established depending upon certain skills, responsibilities, internal/external communication levels, and duties and tasks that are required for the employee to perform.
Fast cats success depends on maintaining a single plan to encourage internal alignment and employee satisfaction with the evaluation process. In a single plan all jobs are evaluated at the same time and under the same requirements. This promotes and boosts employee morale because of a fair process.
Many of the jobs have common skills and are not very diversified in terms of duties, working conditions, and responsibilities therefore making a single structure a suitable fit under a job based evaluation using the point method. The compensation plan best aligned with FastCat’s strategic direction applies a job-based internal structure. This recommendation is based on sound compensation, job evaluation and organizational design principles. These principles have been applied in the context of FastCat’s business strategy in the current and future economic and regulatory environment, its guiding mission statement, and on the views of its key stakeholders (Executives, Employees and Customers).
It has been structured to maintain the integrity of critical and core job profiles required to deliver against this strategy while focusing on factors which significantly differentiate FastCat from its competitors. This new plan comprises four key compensable factors: the tradition factor of skills/knowledge plus the introduction of three new factors: innovation/creativity; collaboration/teamwork; and customer focus in terms of sales, service and quality. Together, the four factors are further segmented into thirteen associated sub-factors (See Appendix A: List of Compensable Factors at FastCat).
This new plan is designed to reduce overall salary costs while enabling FastCat to introduce market competitive, pay-for-performance practices and refocus its workforce on the values that matter most to FastCat and its stakeholders. This plan will be instrumental in the improvement of employee retention. Traditionally, FastCat has always valued the skills and knowledge of its workforce, compensating its employees almost solely on knowledge, problem solving, interpersonal and communication skills, analytical decision making and people and operational management.
Regulatory changes resulting from the introduction of the HiTech Act, part of the American Recovery and Reinvestment Act, have created a major boom opportunity for the industry; however it has also introduced a substantial risk to FastCat. As a consequence of these changes, the war for top talent will escalate as new entrants emerge and the big players begin to diversify their customer base and invade what has formally been considered a niche customer market for FastCat. However, skilled talent has become table stakes across the industry and no longer is sufficient to set FastCat apart from its competition. As a result, this plan has reduced its weighting to 30%. Innovation is FastCat’s single greatest competitive differentiator.
It has traditionally enabled FastCat to offer custom solutions to its customers thereby creating a niche market. Feedback from customers, interviews with Executives and employee opinion feedback have all stressed the importance of innovative solutions to the mutual success of the customers’ and FastCat business success. Innovation and creativity is a source of pride for all FastCat employees. To accelerate the required cultural shift, align with the business strategy and mission statement and to focus the workforce on this strength, innovation has been given the highest weighting at 40%. Without innovation, FastCat revenue stream will continue to erode.
The remaining two compensable factors, collaboration/teamwork and customer focus (sales, service and quality) are equally weighted at 15%. Both are fundamental job requirements, strongly support the strategic direction, are emphasized in the mission statement and highly valued by our customers. Given their importance to the future success of FastCat, alignment with employee compensation is highly recommended. Cultural change will not occur without this alignment. Each sub-factor has been divided into four unique degrees, based on an Enterprise standard we have established for job evaluation.
On two occasions, two roles were so close in job point value and accountabilities they have been merged into single roles. Quality Assurance Analyst (35.75) and Quality Assurance Analyst A (37.75) have been merged. Administrative Aide (31.25) and Administrative Aide II (35.75) have been merged. Results of the job-point evaluation for each FastCat job are available in the (Appendix C– Job Points. See job structure chart on next page.
The resulting 5 level structure, which includes the Senior Fellow, is a much flatter organization. This will enable management to minimize overall salary costs. This is important given the increased financial pressure we have been put under by our customers to lower costs and prove our pricing offer is better than our competitors. It will also free up dollars to increase the salaries of the high demand, senior hot-skill talent and to buy new talent/skills from the market, for example, contracting and legal contract development. This in turn should stabilize retention of this hard to replace talent. In addition, the 5 level structure falls within the 7 level industry best practice standard.
This flat structure will better enable FastCat to retain its nimble execution capabilities, seen as a strength by our Executives and a competitive advantage against the big players targeting our existing customer base and competing with new customer opportunities. This new compensation plan will better position the newly engaged FastCat workforce to drive market expansion and achieve greater share of wallet from existing customers.
Description of Characteristics
Minimal to Basic knowledge of office procedures, applications and support tools. Learns on the job but has a significant learning curve to progress in role. High School Diploma is minimum educational requirement. Learning is mostly experiential or education based but minimal exposure.
Has specific skills and knowledge to carry out the specific accountabilities of the role. Has basic Company knowledge on how things work and how to make things happen. Is often expected to train others and ensure cross-training has been effective. Is expected to independently continue to learn how to improve performance on the job and to better understand how work related to that in other functional areas. Learning is mostly experiential, some exposure or education based. Related University Bachelor’s Degree is minimum educational requirement.
In-depth knowledge on the company’s product offering, strong knowledge on business priorities, organization and people across the organization. In-depth knowledge within functional area of the organization. Is known industry wide as an expert and is often engaged internally and externally for thought leadership. Frequently engages in knowledge transfer activities to help others accelerate their learning curve and are a mentor and coach to high performers within the company. Learning is experience and exposure related. Related University Bachelor’s Degree is minimum educational requirement and more often than not, especially in highly technical areas,
requires post-secondary education. Is dedicated to continuous learning.
In-depth knowledge on most functional areas within the organization. Is known industry wide as an expert and is often engaged internally and externally for thought leadership. Is able to leverage a network of SMEs and experts internally and externally. Is often requested to participant in or lead external thought forums or conferences and has a global reputation within the industry. Shares expertise and wisdom with senior customer Executives. Exposure is one of the most critical types of learning styles. Post-secondary University Degree is minimum educational requirement. Is dedicated to continuous learning. Is passionate about continuous learning and create a learning culture.
Factor: Skills
Sub-factor: Problem Solving
Degree
Point
Value
Description of Characteristics
1
25
Has basic problem solving skills but does not conduct work independently. Must raise all issues and problems to more senior individual on team for investigation and resolution. Any issues involved in are short term is nature and present little risk to the organization if not addressed in a timely fashion. 2
50
Frequently confronts problems in day to day work, including those not covered by job routines. Identifies issues independently, investigates simple to semi-complex problems and takes to resolutions. Go in for consultation with manager when large problems are discovered and may need assistance to solve them. Helps others address their issues and problems and work on teams and collaborates with others on more complex, higher risks problems. 3
75
Addresses large complex problems frequently, many of them involving the expertise of subject matter experts from across the organization. Often required to attend cross function sessions to discuss implications of high risk, high reward problems and issues. Often represents interests of functional area on cross-functional committees. Uses independent judgment to make decisions where alternatives are limited that is subject to review only in the final stages.
Is brought in to solve complex, whole system and strategic issues having a potential significant impact on the organization. Often makes the final decision with and without the counsel of others. Takes an end-to-end approach when addressing issues and alternatives. Delegates highly technical problems to those with specialized expertise and works closely with senior management team to plan cost effective solutions that align to the strategic direction of the company.
