UNIVERSITY OF SOUTHERN INDIANA

College of Business

Management 441 D.M. Partridge

Wage and Salary Administration Spring 2010

PHASE III: PERFORMANCE AND EXECUTION

This assignment is outlined on p. 62 in your casebook:

1.  Recommend strategy for performance-based pay.

2.  Adjust employees into the pay structure you developed in Phases I and II, considering, inter alia, “green circle” and “red circle” policy, and assess present salaries.

You will be provided with current salaries for a group of FastCat employees. (Note that the employees in this group are not necessarily representative of all 150 employees; therefore, one cannot easily estimate compensation expenses for the workforce given salary data for these particular employees.)

3.  Design a merit pay plan.

Include considerations of objectives and philosophy, eligibility, cost, performance measures, thresholds, and caps.

ð  To reduce the number of decisions you must make, use a merit budget of 4.0%.

4.  Design a bonus plan based on a balanced scorecard.

Include consideration of objectives and rationale, eligibility, cost effects, performance measures, thresholds, and caps.

5.  Design other performance-based plans (optional).

Include consideration of objectives and philosophy, eligibility, cost, performance measures, thresholds, and caps. With respect to stock options, your task is to recommend whether or not to proceed with further study of the desirability of developing a stock option plan. Note that FastCat at this point in time is a privately-held company.

6.  Consider FastCat’s Benefits.

Extend the External Competitiveness Strategy at FastCat to benefits decisions, analyze competitors’ benefits to base pay ratios, and recommend a benefits ratio for FastCat.

7.  Summarize and evaluate your decisions, including an assessment of labor costs.

Be reminded, re: the admonition in bold italics at p. 71, of the importance of practicing written communication as much as possible using facts, figures, and graphs to back up whatever you are trying to communicate.

8.  Recommend FastCat’s strategy for execution, including monitoring and evaluating the system.

9.  Celebrate your success!!!

ð  Your report, exclusive of the executive summary and exhibits, should not exceed five pages, typed. The report is due April 27.

ð  The software for this phase is contained in an Access database available on the Blackboard course page.