Section C

Compensation Strategy for Zenith

Compensation is a vital stimulus when rewards are given for the achievement of the desired
organizational results. It is said that money is a powerful source of motivation. Achievement
of the desired performance is important in order to enrich the effectiveness of the
organisation, this increases the possibility of success. The compensation policy adopted by
Zenith reflects the strategic objectives of the business. Compensation strategy can reinforce
the organisational culture that is desired. This enables organisational culture under which
pay is linked. Zenith needs to focus on the job families to apply the suitable compensation
strategy. According to the text book job family is defined as “A series of progressively
higher, related jobs distinguished by levels of knowledge, skills, and abilities (competencies)
and other factors, and providing promotional opportunities over time”(Long,2010). For
example in a restaurant a waiter is hired to complete the day-to-day tasks and duties. A
waiter can be a high school graduate student who has very little experience, whose skills are
being developed and who would be given responsibilities at a lower level than those with
experience. On the other hand the senior waiter which is also called head waiter would be
one with many years of experience whose skills and competencies are fully developed and
who completes the job duties of high level. Therefore, the worth of the waiters diverges
widely based on the experience, competencies and the responsibilities he/she has. The
main purpose of Job family is to develop competencies of the workforce through better
selection and placement and it also helps to increase training and development
participation of the employees. . Zenith needs to determine the job family so that they can
increase the retention of competent employees and also it will help to improve an individual
employee’s performance and contribution. Determining the job families has a huge impact
on managers to make staffing decisions which allow flexibility to managers to assign job
duties.

Job families function to deliver both a structure for departmental human resource decisions
and a career hierarchy by which an employee may plan his/her proficient growth and
encroachment. A job description for a job within a job family defines, in broad terms, the
duties and responsibilities one would be expected to accomplish at the several levels within
a job family. The levels within a job family are defined more on the competencies estimated
by the employee rather than a list of precise tasks and responsibilities. The number of levels
for a job family is determined by the value of the job in the marketplace and to the
institution.

Job Family Names of the Job included in the Job Family

Administrative job family Secretary, Clerks, Compensation clerks and

officers

Communication job family Marketing and sales

Application programmer job family Junior, intermediate, senior application

programmers

High-quality professionals job family System Installation, System Integration,

Systems Marketing specialist

Leadership job family Directors, managers, supervisors of all

departments

For Zenith, we figured out the job families and used a tabular form to make it simple, where
one can see that there are six job families, and under each family, definite jobs have been
itemised.
Administrative job family is listed as the first job family, under it, the secretaries and the
clerks of various departments in Zenith are recorded. The work which is done by clerks and
secretaries are routine work in which they follow the instructions of their seniors and
achieve the work that is given by them on daily basis. This kind of work requests very little
knowledge and also fewer skills, therefore this kind of job require task behaviour from the
employees. The employees take instructions from their seniors and get the job done in a
given time frame. The employees should get fixed base pay salary and Zenith should also
provide meaningful and affordable healthcare benefits. This will help the employees to job
security plus benefits, and by this, it will attract and retain the existing employee. Base
salary of an employee should be determined by the level of experience, the market rate and
internal equity for new hires, transfers, promotions and adjustments. Future growths in
base salary should be determined by individual performance as gauged through the
performance management process.

Required Behaviour Compensation mix Task of compensation mix

Task Behaviour Base pay, pension plan Job Security
Mandatory Benefits Retain employees
Health care benefits Attract new employees
Performance Incentives (threshold) Motivation for work
Pension plan Retention
Communication is the second member in the job family where the executives of marketing
and sales are listed. They do the major communication with the customers and take the
benefit of their communication skills to influence the customer to buy the company’s
product. The behaviour required for this job family is the membership behaviour, as they
are the first channel through which company will get introduced to the new customers.
Marketing and sales employees represent the company to existing and the new customers,
therefore their behaviour should be proper and should benefit the organization. They must
get a respectable base salary which should be comparatively higher than the market base
bay, to attract and create a difference in the market. Similarly individual targets needs to be
set plus a team incentive plan, which will motivate an individual to work hard as well as
employees will work in teams to accomplish the team incentives. This compensation mix will
bring a healthy internal competition as well as company will be benefited simultaneously.

Required Behaviour Compensation mix (Base pay, Task of compensation mix

Performance pay, Indirect pay)

Membership Lead Base pay, pension plan Job satisfaction

Behaviour Mandatory Benefits Job security
Individual Incentive plan Exerts Motivation
Team incentive plan Focus on shared Goal
Commissions
Application programmer is the third member, and under it, juniors, intermediates and
senior application programmers are listed. They are the one who are skilled workers, people
with precise qualifications and a university degree in computer science can work as an
application programmer. The tasks that an application programmer needs to undertake are
entering the codes into computer system, generate applications such as Oracle forms. This
job family is a core family of the company therefore organization citizenship behaviour will
be vital from this job family. In this job family, the employee needs to willingly undertake
special behaviour that is advantageous to the organization. The employees need to be
creative and generate ideas to develop new software helping the organization stand out in
the market. Zenith need to use a very healthy compensation mix for this job family. All the
employees in this job family should get base salary and a flexible benefit plan that aids
individual employees to choose the benefits that are best suited to their specific needs.
Nevertheless, a basic or core benefits package of life and health insurance, sick leaves, and
vacation ensures that employees have a minimum level of coverage will be provided to all
employees. The flexible benefits plan will help the employees to advance greater
understanding of the benefits offered to them and the costs incurred. Zenith can maximize
the psychological value of their benefits program by paying only for greatly desired benefits.
By this plan Zenith will gain competitive advantage in the recruiting and retention of the
employees. Zenith should also include the this job family into profit sharing plan of the
company which will encourage the employees to use their potential to find out innovative
ways to enhance their skill to develop software for the company.

Required Behaviour Compensation mix (Base pay, Task of compensation mix

Performance pay, Indirect pay)
Organization Lead base salary, pension plan
citizenship behaviour Mandatory Benefits
Flexible Benefits plan
Profit Sharing plan
Job satisfaction
Security
Attract and retain employee
Motivation for development
High-quality professionals is the fourth member of the job family, under this job family, the
system installation, system integration, system marketing specialist are listed. The
employees holding position in this job family are either qualified from good university and
hold a degree in a specialized field or he/she has an experience of several years in one field
of work. Zenith should enforce task behaviour from this job family, they are used for
training purposes and undertake the task assigned by the management. They are very vital
for the organization as the new employees in the organization have to go complete proper
training so that they can advance their skills in the specific area of work. There is a need for
highly qualified and experienced trainer to train the employees properly. Consequently to
attract and retain employees, there is a need for a good amount of pay of the base salary
and bonuses for the performance of the task. A non-contributory pension plan should be
added into the compensation mix in which the contribution to plan are made solely by the
company. This motivates the employees to perform their tasks effectively, and non-
contributory pension plan will tempt the employees to stay with the organisation, following
the effective retention.

Required Behaviour Compensation mix (Base pay, Task of compensation mix

Performance pay, Indirect pay)
Task Behaviour Lead Base salary Job satisfaction
Mandatory benefits Security
Bonuses Motivation to perform well
Non-contributory pension plan Retention
Group and Individual performance
Leadership is the fifth member in the job family, where all the directors, managers and
supervisors are listed. The employees here, poses a very high level of qualification in their
particular field of study, they even have several years of practice and proficiency in their
significant field. It is very essential for an organization to have stable employees at this level,
thus Zenith needs to make sure they get compensated in the way that satisfies their higher
order needs and makes them stay with the organization for longer period of time. Zenith
needs to acquire citizenship behaviour from this job family and in order to obtain this they
need to pay a appropriately high base salary and well-defined benefit plan in which the
amount an employee is to obtain upon retirement is specifically set forth. They should also
offer gain sharing to this job family to keep them motivated to accomplish the goals set by
the organization.

Required Behaviour Compensation mix (Base pay, Task of compensation mix

Performance pay, Indirect pay)
Organization Lead Base salary Job satisfaction
citizenship Behaviour Mandatory benefits Security
Defined benefit plan Retention
Gain Sharing plan Motivate leadership
Group and Individual performance Motivate individuals in Team

In order to apply effective compensation mix, zenith needs to concentrate on one of their
compensation policy. The policy which needs that compensation levels and decisions about
employee compensation be kept secret and prohibit employees from revealing their
compensation information to anyone. This policy will avoid misperceptions and distrust of
compensation fairness and pay for performance standards among employees.
 Compensation Strategy Template for Each Job Family

Job Family: Administrative

Base Pay Proportion of total

Job Evaluation 50%
Market Pricing 40%
Pay For Knowledge 10%

Performance Pay Proportion of total

Individual Performance Pay 10%
Commissions 10%
Team Performance Pay 30%

Indirect Pay Proportion of total

Mandatory Benefits 30%
Pension Plan 5%
Health And Life Insurance 5%
Employee Services 3%
Other Benefits 2%
 Job Family: Communication

Base Pay Proportion of total

Job Evaluation 50%
Market Pricing 40%
Pay For Knowledge 10%

Performance Pay Proportion of total

Individual Performance Pay 10%
Commissions 10%
Team Performance Pay 30%

Indirect Pay Proportion of total

Mandatory Benefits 30%
Pension Plan 5%
Health And Life Insurance 5%
Employee Services 3%
Other Benefits 2%
 Job Family: Application programmer

Base Pay Proportion of total

Job Evaluation 50%
Market Pricing 40%
Pay For Knowledge 10%

Performance Pay Proportion of total

Individual Performance Pay 10%
Commissions 10%
Group Performance Pay 30%

Indirect Pay Proportion of total

Mandatory Benefits 30%
Pension Plan 5%
Health And Life Insurance 5%
Employee Services 3%
Other Benefits 2%
 Job Family: High-quality professionals

Base Pay Proportion of total

Job Evaluation 50%
Market Pricing 40%
Pay For Knowledge 10%

Performance Pay Proportion of total

Individual Performance Pay 10%
Commissions 10%
Group Performance Pay 30%

Indirect Pay Proportion of total

Mandatory Benefits 30%
Pension Plan 5%
Health And Life Insurance 5%
Employee Services 3%
Other Benefits 2%
 Job Family: Leadership

Base Pay Proportion of total

Job Evaluation 50%
Market Pricing 40%
Pay For Knowledge 10%

Performance Pay Proportion of total

Individual Performance Pay 10%
Commissions 10%
Group Performance Pay 30%

Indirect Pay Proportion of total

Mandatory Benefits 30%
Pension Plan 5%
Health And Life Insurance 5%
Employee Services 3%
Other Benefits 2%