Pay Structures and Internal Alignment
Synopsis
Martin Straight Compressors (MSC) is a manufacturing company located out of Toledo, Ohio. Martin Straight Compressors employ 4600 people worldwide. MCS’s Chatham location is a small Canadian company that focuses on manufacturing compressors for heavy industries. Chatham employees approximately 70 salaried and 50 hourly employees. Beginning in 1999, Martin Straight Compressors Chatham had begun facing numerous compensation issues and conflicts.
Some of the issues included:
Having 7 authorized but unfilled middle-level management positions
Manager-employee relationships broken
Documentation not up-to-date with objectives, processes, progress, performance plans
Hourly staff don’t respect the owners
Increased workload with no compensation
Loss of commitment, motivation, and job security among employees
New management brought it while problems are still effecting the day-to-day functions of the organization
Merit process isn’t liked
Restrictions on merit raises by head office
Union involvement
Flawed gain-share plan
Merit raises go to salaried, non-union staff
Merit raises for one employee depend on other employees
Executive incentive plan uses different formulas for different employees
This consultation report will begin with identifying the two main problems MSC faces and how to resolve them. Next we will apply the Equity Theory and investigate why certain employees are unhappy about the current compensation system. We will look at the company’s standpoint from a competitor’s point of view, and what methods to use to ensure fast, accurate, and acceptable results to ensure MSC continues to grow and be profitable.
The 2 Main Problems
After analyzing the process and theories used by Martin Straight Compressors, two main issues become precedent:
1. MSC doesn’t have a fair or efficient compensation method. The processes and ideologies used in making decisions in regards to pay are flawed. There is a gap between pay levels
Martin Straight Compressors (MSC) is a manufacturing company located out of Toledo, Ohio. Martin Straight Compressors employ 4600 people worldwide. MCS’s Chatham location is a small Canadian company that focuses on manufacturing compressors for heavy industries. Chatham employees approximately 70 salaried and 50 hourly employees. Beginning in 1999, Martin Straight Compressors Chatham had begun facing numerous compensation issues and conflicts.
Some of the issues included:
Having 7 authorized but unfilled middle-level management positions
Manager-employee relationships broken
Documentation not up-to-date with objectives, processes, progress, performance plans
Hourly staff don’t respect the owners
Increased workload with no compensation
Loss of commitment, motivation, and job security among employees
New management brought it while problems are still effecting the day-to-day functions of the organization
Merit process isn’t liked
Restrictions on merit raises by head office
Union involvement
Flawed gain-share plan
Merit raises go to salaried, non-union staff
Merit raises for one employee depend on other employees
Executive incentive plan uses different formulas for different employees
This consultation report will begin with identifying the two main problems MSC faces and how to resolve them. Next we will apply the Equity Theory and investigate why certain employees are unhappy about the current compensation system. We will look at the company’s standpoint from a competitor’s point of view, and what methods to use to ensure fast, accurate, and acceptable results to ensure MSC continues to grow and be profitable.
The 2 Main Problems
After analyzing the process and theories used by Martin Straight Compressors, two main issues become precedent:
1. MSC doesn’t have a fair or efficient compensation method. The processes and ideologies used in making decisions in regards to pay are flawed. There is a gap between pay levels
References: (APA Format) Gondzio, J., & Grothey, A. (2009, May). Exploiting structure in parallel implementation of interior point methods for optimization. Retrieved rom http://link.springer.com/article/10.1007/s10287-008-0090-3. Retrieved on October 6, 2013. Heathfield, S. (2001, June 05). Compensation strategies and structure. Retrieved from http://humanresources.about.com/od/compensation structure/compensation-structure.htm. Retrieved on October 6, 2013. Milkovich, G., Newman, J., Gerhart, B., Cole, N., & Yap , M. (2013). Compensation. (4th ed., p. 01). McGraw-Hill Ryerson Limited. Retrieved on October 6, 2013.