03 Oct compensation system:
Antle Corporation is a large electronics and computer firm headquartered on the East Coast. It has more than 100,000 employees. Founded in 1912, Antle was generally regarded as the world’s number- one designer and manufacturer of large computer equipment from the late 1940s until the early 1990s. At its peak, its share of the market was estimated at 80 percent. The compensation system at Antle has evolved through the decades, and top managers as well as employees report high levels of satisfaction with it. The following are the essential elements of the compensation system:
* All jobs are evaluated using a point factor approach once every 10 years, with minor adjustments made in between evaluations to correct inequities.
* The company hires a consulting firm once a year to conduct a salary survey for benchmark jobs. The company’s pay policy is to peg salaries at the 75th percentile of the market.
* There are 25 grade levels in the company. Employees increase their pay level mainly by moving up the corporate hierarchy over time. The typical employee remains three years in one job before being promoted to a job at the next grade level. All employees are hired at the entry level and are groomed within the company.
For the past 10 years, Antle’s market share has been declining at an average rate of 2 percent annually. The board of directors decided to offer early retirement to Antle’s chief executive officer, Alan Steven, who had been at the helm for almost 20 years, and replaced him with Peter Merton, who was hired from a smaller but fast growing competitor. Merton’s mandate is to reverse the company’s declining market share by fostering growth and enhancing flexibility. Because labor costs are almost 70 percent of Antle’s total costs, one of Merton’s first actions was to appoint a committee to examine the firm’s compensation practices. The committee included the vice president for human resources, the comptroller, and two external human resource consultants. Four months later, the committee produced a report identifying several key problems with Antle’s compensation system and related HRM practices. These problems, according to the report, add to Antle’s production costs and reduce the company’s flexibility and capacity to respond to market changes. The committee’s report presented the following conclusions:
* The firm has too many management layers. This is expensive and slows communication.
* Most employees have developed a sense of entitlement; that is, they feel they “deserve” regular raises and promotions. This perception has had a negative effect on motivation.
* The promotion from within policy has meant that once hired, very few employees are terminated, even if they are not performing up to standard. As a result, many employees are trapped at Antle because they cannot earn an equivalent salary at any other company.
* Jobs are too narrowly defined, increasing labor costs and preventing people from working to their full potential.
* The company is top heavy with highly paid employees whose best days are over but who are still many years from retirement. The firm’s tradition of providing job security is now putting it at a disadvantage because it cannot reduce its labor force to remain competitive.
* The firm has not been taking advantage of outsourcing to foreign locations in order to preserve employee loyalty. But this means that competitors who are going to places such as China and India enjoy a substantial compensation edge, which improves their bottom line.
After reading the report, Merton is trying to decide what to do about the problems that have been identified.
a. What recommendations would you offer Alan Merton for redesigning
Antle’s.
b. What are the challenges management faces on the communications of compensation and benefits to the employees at Antle’s?
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.