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bus571_compensation_strategy_project_4-30-12.docxBUS 571 Compensation and Benefits
Compensation Strategy Project
Techtron Corporation is a developer and manufacturer of electronic window systems for small and medium-size automobiles. It has several international customers, including Vauxhall Motors (UK) and General Motors Holden Ltd. (Port Melbourne, Australia). Techtron has recently landed a contract to produce electronic window systems for the Hyundai Sonata, manufactured in Montgomery, Alabama. They have nearly completed a manufacturing facility within the suburban perimeter of the largest city in your state, and the senior leadership and support staff are in place. The company is now ready to begin the recruiting and hiring process for production floor employees.
Here is the projected income statement for Techtron in its first year:
Revenues (from sales and all sources) $35,000,000
Manufacturing expenses:
Cost of materials (10,000,000)
Cost of manufacturing operations (2,000,000)
(includes all plant and equipment
maintenance and depreciation) (12,000,000)
Administrative Costs and Overhead
Administrative Overhead and Expense (1,000,000)
Research and Development (1,000,000)
Employee Expenses (10,500,000)
(target is 30% of sales over time) (12,500,000)
Capital Budget
Capital purchases (2,000,000)
Loans payable (4,000,000)
(for the first seven years, then
dependent on plant expansion) (6,000,000)
___________
Projected Pretax income for the first year of startup 4,500,000
Depending on tax policy of state and federal governments,
net income may be used for additional research and development,
capital purchases, reduction of debt, dividends, and/or retained earnings.
The company projects that sales for years 2-6 will increase by 2%, 4%. -3%, 3%, and 4%.
The company projects that materials and overhead costs will rise by approximately the current rate of inflation (about 2.4%) for years 2-6.
Techtron will require approximately 140 hourly production technicians, 3 production supervisors, 2 manufacturing engineers, 1 process engineer, and 1 computer technician for their floor operations. Minimum qualifications and job descriptions for these jobs are as follows:
Hourly production technicians: Responsible for production and assembly of electronic window system components and subassemblies. Responsible for quality control of manufactured products. Minimal educational requirement is an associate’s degree in business or manufacturing technology; applicants must have general mathematics skills and be able to interpret control charts and basic computer output. Prior experience valued but not required.
Production supervisor: Responsible for supervision of manufacturing processes, including troubleshooting problems and interfacing between production technicians and other company functions such as HR, Information Systems, etc. Minimal educational requirement is a BA degree in industrial management or quality management; applicants must have general mathematics skills and be able to interpret control charts and basic computer output. Three years of supervisory experience at the manufacturing floor level with JIT systems is required.
Manufacturing and Process engineers: Responsible for (but limited to) production scheduling, overview of quality systems, safety systems and ergonomics, and cost management within a JIT production system. The successful applicant should be an innovative thinker who anticipates problems and looks for ways to maximize production efficiency. Minimal educational requirements include BA degrees in manufacturing or process engineering, with a minimum of five years of successful experience in the multiple functions of a robotics-based JIT manufacturing system.
Computer Technician: Responsible for floor support of robotics, data management, and software maintenance for a JIT components manufacturing system. The successful applicant should be an innovative thinker who anticipates problems and looks for ways to maximize production efficiency. Minimal educational requirements include an associate’s degree (BA preferred) with majors in software support or database support, with a minimum of three years of successful experience in JIT manufacturing support.
Requirements for the Compensation Strategy
As the HR compensation strategist for Techtron, your task is to develop a compensation strategy for the production employees at the new facility, which is located within the suburban perimeter of the largest city in your state. Some factors you will need to consider when developing this compensation strategy are:
1) The compensation bandwidth for employees performing similar functions at companies of similar size in the employment area in which the plant will be located.
2) The union status of your state. It is the intent of Techtron for this facility to be non-union, but whether your state is a union shop state (like New York) or a right to work state (like Alabama) will affect your compensation strategy. Specifically, if your compensation plan is competing with the compensation of area union employees, their pension may be a defined benefit pension as opposed to a 401K. You are not required by law to provide any pension benefits in any state.
3) The legislation in your jurisdiction regarding partner benefits or gay marriage will affect your benefits strategy.
4) There are no laws in any state regarding a requirement to perform performance evaluations as the basis of compensation adjustment, but you desire to make a performance evaluation the basis of compensation adjustment as well as promotion consideration. What are the relevant policies on performance evaluations among other companies similar to yours in your area?
5) Your compensation and benefits plan and your evaluation plan must be cost-effective and sustainable.
The requirements of the proposal include:
1) An introduction to your proposal that will preview what information will be presented and the overall goal of the compensation strategy. Keep in mind that the audience for this proposal is senior executive management at Techtron.
2) Develop a proposal for compensation bandwidths for each of the four job classifications described above. In addition to the compensation bandwidths, the proposal should include a rationale for each bandwidth that is data driven and grounded in current environmental factors. The proposal should also include parameters and performance factors that would be used as a basis for differentiating employee salaries within the same job classification.
3) Develop a proposal for a benefits plan for each of the four job classifications described above. In addition to the benefits plan, the proposal should include a rationale for each benefit plan that is data driven and grounded in current environmental factors. The proposal should also include parameters and performance factors that would be used as a basis for differentiating employee salaries within the same job classification Benefits may include a number of health insurance options, tiered paid vacation, sick time or paid time off, pension contributions, and other options. Health care plans must be PPACA-compliant.
Although there is no prescribed minimum or maximum length for this document, it would be difficult to believe that these requirements could be met in less than 12-15 pages of text. The proposal will be due on Tuesday of the 6th week of class; there are no makeups, extensions, or reworks for this assignment. The proposal should be submitted to the Compensation Proposal assignment link.
The proposal will be evaluated as follows:
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BUS 571 Compensation Proposal |
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Introduction |
|
Pts. Possible |
|
Exemplary |
In addition to the satisfactory and accomplished criteria, the student effectively transitions into the body of the proposal and models introductions consistently found in professional literature and/or executive reports. |
50 |
|
Accomplished |
In addition to addressing the three primary components of a proposal introduction, the student captures the reader by including a forecast that is compelling, clear, and convinces the reader to read on. |
40 |
|
Satisfactory |
The student addresses all three of the three primary components of a proposal introduction: a) context, b) scope of proposal, and c) goal of the proposal. |
30 |
|
Approaches Expectation |
The student addresses one or two of the primary components of an introduction: a) context, b) scope of proposal, and c) goal of the proposal. |
20 |
|
Below Expectation |
The student does not address any of the three primary components of an introduction: a) context, b) scope of the proposal, and c) goal of the proposal |
10 |
|
|
Did not complete requirements |
0 |
|
Compensation Bandwidth |
|
|
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Exemplary |
An innovative and realistic compensation bandwidth proposal is developed for each of the four job categories. The proposal is data driven and based upon multiple quality resources; including the Bureau of Labor and Statistics, and national and local compensation studies. Local, state and national environmental compensation considerations are clearly identified and addressed. A novel approach that considers multiple implementation factors is utilized for differentiating employee salaries within the job categories. (91 – 100) |
100 |
|
Accomplished |
A realistic and appropriate compensation bandwidth proposal is developed for each of the four job categories. The proposal is data driven and based upon multiple quality resource; including the Bureau of Labor and Statistics, and national and local compensation studies. Clear and logical parameters are established for differentiating employee salaries within the job categories. (80 – 90) |
80 |
|
Satisfactory |
A realistic and appropriate compensation bandwidth proposal is developed for each of the four job categories. Parameters are established for differentiating employee salaries within the job categories. (60 – 79) |
60 |
|
Approaches Satisfactory |
A brief recommendation for compensation bandwidth is provided, but lacks the depth and detail necessary to be implemented. Minimal research which supports the proposal is presented. Appropriate parameters for differentiating employee salaries within the job categories is addressed but reveal implementation flaws or are not fully developed. (40 – 59) |
40 |
|
Below Expectation |
A brief recommendation for compensation bandwidth is provided but no valid research or data is provided as a rationale. Parameters for differentiating employee salaries within the job categories are ignored or rudimentary. (1 – 39) |
20 |
|
|
Did not complete requirements |
0 |
|
Benefits Plan |
|
|
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Exemplary |
A comprehensive and innovative proposal for a benefits plan for each of the four job classifications is presented. The proposal is supported by data gathered from numerous sources, environmental factors were identified and addressed, and the plan was analyzed from multiple viewpoints. The proposal includes parameters and performance factors that would be used as a basis for differentiating employee benefits within the same job classification. A novel approach that considers multiple implementation factors is utilized for differentiating employee benefits within the job categories. (91 – 100) |
100 |
|
Accomplished |
A detailed proposal for a benefits plan for each of the four job classifications is presented. The proposal is supported by data gathered from multiple sources and environmental factors were identified and addressed. The proposal includes parameters and performance factors that would be used as a basis for differentiating employee benefits within the same job classification. A rationale that considers multiple viewpoints for differentiating employee benefits is included. (80 – 90) |
80 |
|
Satisfactory |
A feasible benefits plan for each of the four job classifications is presented. Sufficient data is provided as a rationale for the benefits plan and parameters for differentiating employee benefits within the same job classification is provided. (60 – 79) |
60 |
|
Approaches Expectation |
A brief recommendation for a benefits plan is provided, but lacks the depth and detail necessary to be implemented. Minimal research which supports the proposal is presented. Appropriate parameters for differentiating employee benefits within the job categories is addressed but reveal implementation flaws or are not fully developed. (40 – 59) |
40 |
|
Below Expectation |
A brief recommendation for a benefits plan is provided but no valid research or data is provided as a rationale. Parameters for differentiating employee benefits within the job categories are ignored or rudimentary. (1 – 39) |
20 |
|
|
Did not complete requirement |
0 |
|
Evaluation and Performance Guidelines |
|
|
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Exemplary |
A detailed proposal for an employee evaluation process, as it relates to determining compensation adjustment, is presented for each of the four jobs categories. The proposal includes a comprehensive review of motivational aspects. The proposal clearly utilizes best practices and is grounded in literature and theory. In addition, a novel approach that considers multiple implementation factors is utilized for establishing compensation guidelines for those employees that do not meet minimum performance expectations. |
100 |
|
Accomplished |
A detailed proposal for an employee evaluation process, as it relates to determining compensation adjustment, is presented for each of the four jobs categories. The proposal includes a comprehensive review of motivational aspects. The proposal clearly utilizes best practices and is grounded in literature and theory. In addition, the proposal provides compensation guidelines that incorporate multiple lenses and viewpoint, to address those employees that do not meet minimum performance expectations.
|
80 |
|
Satisfactory |
A proposal for an employee evaluation process, as it relates to determining compensation adjustment, is presented for each of the four jobs categories. The proposal includes a review of motivational aspects, and provides support for the compensation plan that is grounded in literature and theory. In addition, the proposal provides compensation guidelines for those employees that do not meet minimum performance expectations. |
60 |
|
Approaches Expectation |
A brief recommendation for an employee evaluation process, as it relates to determining compensation adjustment, is provided but lacks the depth and detail necessary to be implemented. Minimal research which supports the proposal is presented. Guidelines for addressing those employees that do not meet minimum performance expectations is provided, but reveal implementation flaws or are not fully developed. |
40 |
|
Below Expectation |
A brief recommendation for an employee evaluation process, as it relates to determining compensation adjustment, is provided but no valid research or data is provided as a rationale. Guidelines for addressing those employees that do not meet minimum performance expectations are absent or rudimentary. |
20 |
|
|
Did not complete requirements |
0 |
|
Style, Format & Mechanics |
|
|
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Exemplary |
The paper consistently models the language and conventions used in scholarly literature or professional reports. The proposal would meet the guidelines for submission to a senior executive/management team. |
50 |
|
Accomplished |
Paper follows normal conventions of spelling, grammar, and APA format throughout. Transitions and organizational structures such as subheading are effectively used which help the reader move from one point to another. The reader has little difficulty referring back to cited sources. |
40 |
|
Satisfactory |
Paper is in correct APA format, grammatical conventions are primarily correct, and appropriate scholarly references are utilized. The paper flows logically and is comprehendible. |
30 |
|
Approaches Expectation |
APA format is attempted but incorrectly used. Writing does not flow smoothly from point to point. There are insufficient or inappropriate citations. Spelling, grammar and punctuation errors are present. |
20 |
|
Below Expectation |
Paper contains numerous errors in spelling, grammar, and/or sentence structure, which make following the logic of the paper extremely difficult. Fails to demonstrate thoroughness and competence in documentation. Overall style and format make reading and comprehension problematic. |
10 |
|
TOTAL |
|
400 |
