Reference no: EM133041736

Problem: After 3 months in her new role as Director of Human Resources (HR) at Customers First, Deborah Ketson feels confident that she has identified the significant HR issues at the company. She has prioritized the issues and is meeting with company president Joan Bates to make her recommendations. Deborah is prepared to discuss her top priority, which is to conduct an organization-wide job analysis and job evaluation project in order to start building a more internally consistent pay structure. 

Customers First is a company that provides customer service for other companies. Small-to-medium sized companies outsource their customer service function to Customers First, which manages all customer service for their clients through a call centre and also via an online customer service centre. The company works with a diverse group of clients ranging from small retail stores to larger online retailers. Customers First has grown quickly in the 5 years since Joan started the company, and now employs more than 150 customer service representatives (CSRs) and other support staff. 

The company's quick growth has led to several problems with its compensation structure. Much of the company's hiring has occurred in response to a new contract, and pay was set based on the current market rate for CSRs in order to attract the right talent. For example, an early client was a small retail store that needed fairly simple customer support. Four CSRs were hired and their pay was set at just slightly above minimum wage. In comparison, a more recent client required hiring 18 CSRs. The labour market was competitive at the time, and the company hired these 18 new employees at a pay rate well above what others at the company were paid. Such variance has occurred often in the hiring process, resulting in groups of CSRs at much different levels of pay for doing substantially similar work. 

Deborah has heard many complaints from the supervisors about inequities in the pay of the CSRs. The supervisors are concerned that the inequities may lead to turnover among some of the staff. Deborah has examined the pay rates of the CSRs across the organization and agrees with the supervisors that there are some concerns. One particular concern is that the lowest paid group of CSRs is primarily female, while the highest paid group includes all male employees. By talking with the supervisors, Deborah has learned that there are some CSRs with different levels of responsibilities and skills, but they all hold the same job title. Deborah believes that an organization-wide job analysis and job evaluation is necessary to build an internally aligned compensation structure. 

However, when she shared her recommendation with Joan, she did not receive the response she expected. Joan is resistant to the job analysis and job evaluation process as she thinks that having such a structured compensation system will limit the company's ability to be flexible in the marketplace. Often, hiring happens quickly in response to a new client contract, and they must hire the right skill set, which might vary based on the current market rates. Further, Joan suggested the entire project would be too time consuming for Deborah and the other staff that would need to be involved. She felt their time would be better spent on other concerns such as recruiting new staff. 

(Martocchio (2014). Strategic compensation: a human resource management approach. 8th Edition. Pearson) 

(a) Assess the potential problems in Customers First's current compensation structure. 

(b) After the discussion with Joan, Deborah decided to draw up a proposal outlining her reasons for the use of job analysis and job evaluation to build an internally aligned compensation structure. 

Prepare a proposal explaining the intent of job analysis and job evaluation and how these will address potential problems assessed in question 2(a). 

(c) Joan is concerned that a structured compensation system will limit the company's ability to be flexible in the marketplace. Recommend TWO (2) possible ways that can be introduced into the review of the compensation structure to address Joan's concerns. 

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