PPM&PPL COMP PROJECT

*Determine the Appropriate Pay Policy Mix and Pay Policy level for E-sonic Job Structure

Using Intrinsic Compensation:

Intrinsic rewards reflect employee psychological mindset that result from performing their jobs through effective job design demonstrate respect for employees and fostering, a supportive and engaging working environment managers promote in compensation, compensation professional, although concerns with employee’s motivation created through in reward, specialized in development of effective and military reward strategies.

CASE BASE STUDY: Introduction

This simulation teaches fundamentals of compensation system design the

long exercise. Acting as a recently hired compensation consulting team, your

group will assist the bourgeoning online music firm, e-sonic, to develop an internally.

consistent and market competitive compensation system that recognizes t

of individual contributors. The following introduction offers a background of

your new client in addition to a description of a e-sonic business objectives and a project

outline. The authors of this casebook wish you well in your studies and hope that you.

find the simulation both educational and enjoyable.

Company Background: E-Sonics

Sonic Records, a market-leading recording studio and

house, has witnessed declining demand for music CDs. Five years ago, So

experienced record-breaking revenues totaling over $15 billion. However, a

few years, CD burning, international piracy, and a shift in consumer preferences.

reduced revenues more. A recent market survey at universities across the

nation (a key demographic for Sonic Records) revealed that over 80 percent of students have not purchased a CD in the last seven years. According to the survey, students either burned friends’ copies of CDs, illegally, downloaded m websites, or purchased tracks legally from online music portals for down music players.

Although the past few years’ declining sales have been disheartening, some positive

advances in the fight against international piracy recently bolstered music revenues

across the industry. The RIAA (Recording Industry Association of America) initiated lawsuits against hundreds of individuals and pirate files-sharing websites. The results so far have been positive. Fear of litigation has deterred illegal download volume. Further, the exceptionally successful launch of a number of on-line sites selling legal music downloads has demonstrated strong consumers demands. In fact, a recent computer company’s on-line music store launch resulted in astounding sales. According to the computer firm CEO “We had hoped to see a million songs in the first six-months,” but we did that in the first six days.

Sonic Records, having experienced tremendous success in the recording and music distribution industry over the past 30 years, realized that the rules of the game were changing. No longer would music be distributed solely through the traditional retail store channel. Consumers desired instant delivery of music online and expected a selection of thousands of artists’ work at their fingertips. Further, consumers expected this music to be portable. Today’s listeners didn’t want to be constrained by the physical limitations of a CD. They wanted digital files that could be easily and legally transferred from computer to portable music player to home receiver interchangeably.

Copyright 2020 Pearson Education, Inc.

When formulating E-sonic’s compensation plan, it is essential to include a pay-for-knowledge program with merit-based pay initiatives. E-sonic promotes continuous knowledge enhancement among its staff via pay-for-knowledge initiatives.

E-Sonic’s HR staff prioritize choosing people with exceptional marketing expertise, proficient computer software development talents, and exemplary customer service abilities for each role. E-sonic considers these positions essential to its success.

*Administrative Assistant

*Customer service:

*Executive Assistant:

*Office Manager

*Writer: Creative Director, Director of Marketing, Software Specialist, Software Engineer

Internally consistent compensation systems clearly define the relative value of each job among all jobs within a company. This ordered set of jobs represents the job structure or hierarchy. Companies rely on a simple, yet fundamental, principle for building internally consistent compensation systems: Employees in jobs that require greater qualifications, more responsibilities, and more complex job duties should be paid more than employees whose jobs require lesser qualifications, fewer responsibilities, and less-complex job duties. Internally consistent job structures formally recognize differences in job characteristics, which therefore enable compensation managers to set pay accordingly.

**************************************************************************

Textbook Reading: Cite textbook and outside source.

Pay mix policies refer to the combination of core compensation and employee benefits components that make up an employee’s total compensation package. In Chapter 1 , we identified and briefly described the various elements of core compensation and employee benefits; then we discussed core compensation elements fully in Chapters 3 , 4 , and 5 . We will review the main elements of employee benefits in Chapters 9 and 10 .

Pay Policy Mix may be expressed in dollars (or other currency as relevant) or as a percentage of total dollars allocated for an employee’s total compensation. The following is an example of a pay policy mix: An appropriate pay mix for policy purposes, it makes sense to consider guidelines for jobs within a structure (for example, managerial, administrative, or sales) because of the common job content and worker requirements of jobs within a structure. For example, in a technology company, a greater portion of bonus compensation might be allocated to engineers than to administrative staff.

Pay Policy Level decision :

Government in the United States is organized at three levels roughly defined by geographic scope. A single federal government oversees the entire United States and its territories. The clear majority of laws that influence compensation were established at the federal level. Next, individual state governments enact and enforce laws that pertain exclusively to their respective regions (e.g., Illinois and Michigan). Most noteworthy are differences in state minimum wage laws, which we will discuss shortly. Finally, local governments enact and enforce laws that are most pertinent to smaller geographic regions (e.g., Champaign County in Illinois and the City of Los Angeles). Many of the federal laws have counterparts in state and local legislation. State and local legislation may be concurrent with federal law or may exist in the absence of similar federal legislation. Wherever inconsistencies in federal, state, or local laws exist, the law that provides individuals the greatest benefit generally prevails. For example, in addition to federal minimum wage legislation, many states also have minimum wage laws. In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.Federal laws that apply to compensation practices are grouped according to four key themes. Table 2-2 lists the laws associated with each theme:

· Income continuity, safety, and work hours

· Pay discrimination

· Accommodating disability and family needs

· Prevailing wage laws

Using Published Compensation Survey Data: Companies usually rely on existing compensation surveys rather than creating their own. Using published compensation survey data starts with two important considerations:

· Survey focus: core compensation or employee benefits

· Sources of published compensation surveys

Survey Focus: Core Compensation or Employee Benefits: Human resource professionals should decide whether to obtain survey information about base pay, employee benefits, or both. Companies historically competed for employees mainly based on base pay. Many companies offered similar, substantial benefits packages to employees without regard to the costs. Companies typically did not use benefits offerings to compete for the best employees.

Times have changed. Benefits costs are now extremely high, which has led to greater variability in benefits offerings among companies. As of September 2017, companies spent an average $18,000 per employee annually to provide discretionary benefits. 3 In 2017, discretionary benefits accounted for as much as 24.4 percent of employers’ total payroll costs. When we factor in legally required benefit costs as well, total employee benefits account for 31.7 percent of total compensation costs. That is a huge cost to employers, one that has been rising rapidly, 4 but one that cannot be avoided. Benefits have become a basis for attracting and retaining the best employees, particularly as noted earlier in this chapter. As a result, employers are likely t

*Determine the Appropriate Pay Policy Mix and Pay Policy level for E-sonic Job Structure

Using Intrinsic Compensation:

Intrinsic rewards reflect employee psychological mindset that result from performing their jobs through effective job design demonstrate respect for employees and fostering, a supportive and engaging working environment managers promote in compensation, compensation professional, although concerns with employee’s motivation created through in reward, specialized in development of effective and military reward strategies.

CASE BASE STUDY: Introduction

This simulation teaches fundamentals of compensation system design the

long exercise. Acting as a recently hired compensation consulting team, your

group will assist the bourgeoning online music firm, e-sonic, to develop an internally.

consistent and market competitive compensation system that recognizes t

of individual contributors. The following introduction offers a background of

your new client in addition to a description of a e-sonic business objectives and a project

outline. The authors of this casebook wish you well in your studies and hope that you.

find the simulation both educational and enjoyable.

Company Background: E-Sonics

Sonic Records, a market-leading recording studio and

house, has witnessed declining demand for music CDs. Five years ago, So

experienced record-breaking revenues totaling over $15 billion. However, a

few years, CD burning, international piracy, and a shift in consumer preferences.

reduced revenues more. A recent market survey at universities across the

nation (a key demographic for Sonic Records) revealed that over 80 percent of students have not purchased a CD in the last seven years. According to the survey, students either burned friends’ copies of CDs, illegally, downloaded m websites, or purchased tracks legally from online music portals for down music players.

Although the past few years’ declining sales have been disheartening, some positive

advances in the fight against international piracy recently bolstered music revenues

across the industry. The RIAA (Recording Industry Association of America) initiated lawsuits against hundreds of individuals and pirate files-sharing websites. The results so far have been positive. Fear of litigation has deterred illegal download volume. Further, the exceptionally successful launch of a number of on-line sites selling legal music downloads has demonstrated strong consumers demands. In fact, a recent computer company’s on-line music store launch resulted in astounding sales. According to the computer firm CEO “We had hoped to see a million songs in the first six-months,” but we did that in the first six days.

Sonic Records, having experienced tremendous success in the recording and music distribution industry over the past 30 years, realized that the rules of the game were changing. No longer would music be distributed solely through the traditional retail store channel. Consumers desired instant delivery of music online and expected a selection of thousands of artists’ work at their fingertips. Further, consumers expected this music to be portable. Today’s listeners didn’t want to be constrained by the physical limitations of a CD. They wanted digital files that could be easily and legally transferred from computer to portable music player to home receiver interchangeably.

Copyright 2020 Pearson Education, Inc.

When formulating E-sonic’s compensation plan, it is essential to include a pay-for-knowledge program with merit-based pay initiatives. E-sonic promotes continuous knowledge enhancement among its staff via pay-for-knowledge initiatives.

E-Sonic’s HR staff prioritize choosing people with exceptional marketing expertise, proficient computer software development talents, and exemplary customer service abilities for each role. E-sonic considers these positions essential to its success.

*Administrative Assistant

*Customer service:

*Executive Assistant:

*Office Manager

*Writer: Creative Director, Director of Marketing, Software Specialist, Software Engineer

Internally consistent compensation systems clearly define the relative value of each job among all jobs within a company. This ordered set of jobs represents the job structure or hierarchy. Companies rely on a simple, yet fundamental, principle for building internally consistent compensation systems: Employees in jobs that require greater qualifications, more responsibilities, and more complex job duties should be paid more than employees whose jobs require lesser qualifications, fewer responsibilities, and less-complex job duties. Internally consistent job structures formally recognize differences in job characteristics, which therefore enable compensation managers to set pay accordingly.

**************************************************************************

Textbook Reading: Cite textbook and outside source.

Pay mix policies refer to the combination of core compensation and employee benefits components that make up an employee’s total compensation package. In Chapter 1 , we identified and briefly described the various elements of core compensation and employee benefits; then we discussed core compensation elements fully in Chapters 3 , 4 , and 5 . We will review the main elements of employee benefits in Chapters 9 and 10 .

Pay Policy Mix may be expressed in dollars (or other currency as relevant) or as a percentage of total dollars allocated for an employee’s total compensation. The following is an example of a pay policy mix: An appropriate pay mix for policy purposes, it makes sense to consider guidelines for jobs within a structure (for example, managerial, administrative, or sales) because of the common job content and worker requirements of jobs within a structure. For example, in a technology company, a greater portion of bonus compensation might be allocated to engineers than to administrative staff.

Pay Policy Level decision :

Government in the United States is organized at three levels roughly defined by geographic scope. A single federal government oversees the entire United States and its territories. The clear majority of laws that influence compensation were established at the federal level. Next, individual state governments enact and enforce laws that pertain exclusively to their respective regions (e.g., Illinois and Michigan). Most noteworthy are differences in state minimum wage laws, which we will discuss shortly. Finally, local governments enact and enforce laws that are most pertinent to smaller geographic regions (e.g., Champaign County in Illinois and the City of Los Angeles). Many of the federal laws have counterparts in state and local legislation. State and local legislation may be concurrent with federal law or may exist in the absence of similar federal legislation. Wherever inconsistencies in federal, state, or local laws exist, the law that provides individuals the greatest benefit generally prevails. For example, in addition to federal minimum wage legislation, many states also have minimum wage laws. In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.Federal laws that apply to compensation practices are grouped according to four key themes. Table 2-2 lists the laws associated with each theme:

· Income continuity, safety, and work hours

· Pay discrimination

· Accommodating disability and family needs

· Prevailing wage laws

Using Published Compensation Survey Data: Companies usually rely on existing compensation surveys rather than creating their own. Using published compensation survey data starts with two important considerations:

· Survey focus: core compensation or employee benefits

· Sources of published compensation surveys

Survey Focus: Core Compensation or Employee Benefits: Human resource professionals should decide whether to obtain survey information about base pay, employee benefits, or both. Companies historically competed for employees mainly based on base pay. Many companies offered similar, substantial benefits packages to employees without regard to the costs. Companies typically did not use benefits offerings to compete for the best employees.

Times have changed. Benefits costs are now extremely high, which has led to greater variability in benefits offerings among companies. As of September 2017, companies spent an average $18,000 per employee annually to provide discretionary benefits. 3 In 2017, discretionary benefits accounted for as much as 24.4 percent of employers’ total payroll costs. When we factor in legally required benefit costs as well, total employee benefits account for 31.7 percent of total compensation costs. That is a huge cost to employers, one that has been rising rapidly, 4 but one that cannot be avoided. Benefits have become a basis for attracting and retaining the best employees, particularly as noted earlier in this chapter. As a result, employers are likely t