Here are some key company facts from your meeting that will be important for the completion of your work assignment. Use this information (as needed/where relevant) to complete the assignment: - One challenge because of this fierce competitiveness in the industry has been turnover; this needs to be further analyzed in the compensation figures for the upcoming budget and to HR for recruitment strategies: There has been 15% turnover rate in Grade Level 5 jobs - Despite the turnover, the company has committed to a3.5% merit increase for each department this year in all grades (except Executives). Executives receive a 10% merit increase. - Executives receive a 15\% lump sum bonus each year regardless of performance. - A 25\% Benefit Expense factor should be used in determining the compensation budget. - Lump Sum bonuses at 8% were given to all Red Circled employees this year in fear of more turnover. - Red circled employees receive 15%. - A bottom-up budgeting plan approach has been used, but the CEO has expressed concern about this approach. - All Level 1 employees were given an additional 2.0\% to their Benefit Expense factor for the upcoming year to deal with Green Circles, as well as offer additional long-term health options because of the higher OH\& 5 risks. - STW used the following minimum/maximum percentages with the corresponding points allocations values: - Table 1 and Table 2 summaries are provided (See below) Table 1: Water Research Department (WRD) - Compensation Summary by Position at Super-Tech Water (STW) Super-Tech Water (STW) is one of the leading Water System Purification companies in North American responsible for the design and manufacturing of modern-day water technology that treats and cleans domestic, commercial, and industrial water. The company is 10 -years old and based on its recent company town hall meeting, has stated its strategic goal of wanting to become a 2-billion-dollar company in the next three years from its current worth of 950 million. This would clearly make them a market leader and consistent with their "Pay-for-Performance" type of approach that tends to be consistent with the industry. STW revenues have started to stagnate this year (i.e., remained even or even a slight drop 1-2\%) because of (1) an increase in new competitors, and (2) the influence of increased government requirements across the world for water protection. Illustration 1 shows the progression of company results over the past few years. The change in the market space has made the "war on talent" in this industry much fiercer and more competitive. The need for talented and high-performing employees (Note: Especially in Product Development departments and specifically Research Scientist positions) has been elevated because of the critical need to ensure water systems can meet and treat the different water challenges around the world. This could literally mean the difference between bigger contracts and established long-term maintenance contracts to service and maintain critical water systems for customers. As a result, STW has had to elevate its total rewards given the need to find and engage a highly educated and experienced workforce that will need to commit to longer than average working days to help STW achieve its strategic and financial goals. STW has had to maintain aggressive recruitment practices nationally and internationally. As a result, STW's compensation budget has exceeded by 5% each of the last two years ( 24 months) past their initial estimates. Expenses are very high in this high-tech competitive industry. STW hires a broad range of technical and scientific workers from all over the world. Many will have exclusive knowledge in water chemistry and engineering design; who most often make up the various types of scientific professionals and departments within most of their Technical and Product Development teams. Illustration 1: Revenue Distribution (Super-Tech Water - STW) As the Director of Compensation, you're asked to take on important support and assessment functions for the CEO and founder of STW. Focusing department-by-department, you will first need to re-assess the compensation structure in the Water Research Department (WRD), given this department requires highly technical and experienced water Chemists and Scientists. In fact, Water Chemists are in high demand. Second, you will work side-by-side with the new Director of the Research Department to complete a Pay-for-Performance merit allocation. Finally, you will complete a more comprehensive compensation administration breakdown using a cross-section of a few departments to gain a better perspective on the organization's overall compensation structure and performance. This will help make some early recommendations to the CEO and then a larger more robust plan for an organization-wide analysis next year. 5) The Executive Team at STW is reviewing each department as it works toward achieving its business goal. They're not certain whether to lead, lag or match in the Water Research Dept. Based on internal and external information (hint: look at the graph), what you know of the company's strategy and goals and the nature of the industry overall, what should STW do for this department? Explain b) Based on your answer in (a) above, calculate the new pay line for the positions in the Water Research Dept. [Note: If a lag decision is recommended, (5%) | If a lead decision is recommended, (10%) | If a match decision is recommended, (Determine required percentage). Use matrix below. Rounding rules apply [10 marks] c) Plot the new pay line with the policy values on the graph (Illustration 2). (Suggestion: Use a different colour in your graph to differentiate pay lines; Attention to accuracy is required. [ 2 marks] Here are some key company facts from your meeting that will be important for the completion of your work assignment. Use this information (as needed/where relevant) to complete the assignment: - One challenge because of this fierce competitiveness in the industry has been turnover; this needs to be further analyzed in the compensation figures for the upcoming budget and to HR for recruitment strategies: There has been 15% turnover rate in Grade Level 5 jobs - Despite the turnover, the company has committed to a3.5% merit increase for each department this year in all grades (except Executives). Executives receive a 10% merit increase. - Executives receive a 15\% lump sum bonus each year regardless of performance. - A 25\% Benefit Expense factor should be used in determining the compensation budget. - Lump Sum bonuses at 8% were given to all Red Circled employees this year in fear of more turnover. - Red circled employees receive 15%. - A bottom-up budgeting plan approach has been used, but the CEO has expressed concern about this approach. - All Level 1 employees were given an additional 2.0\% to their Benefit Expense factor for the upcoming year to deal with Green Circles, as well as offer additional long-term health options because of the higher OH\& 5 risks. - STW used the following minimum/maximum percentages with the corresponding points allocations values: - Table 1 and Table 2 summaries are provided (See below) Table 1: Water Research Department (WRD) - Compensation Summary by Position at Super-Tech Water (STW) Super-Tech Water (STW) is one of the leading Water System Purification companies in North American responsible for the design and manufacturing of modern-day water technology that treats and cleans domestic, commercial, and industrial water. The company is 10 -years old and based on its recent company town hall meeting, has stated its strategic goal of wanting to become a 2-billion-dollar company in the next three years from its current worth of 950 million. This would clearly make them a market leader and consistent with their "Pay-for-Performance" type of approach that tends to be consistent with the industry. STW revenues have started to stagnate this year (i.e., remained even or even a slight drop 1-2\%) because of (1) an increase in new competitors, and (2) the influence of increased government requirements across the world for water protection. Illustration 1 shows the progression of company results over the past few years. The change in the market space has made the "war on talent" in this industry much fiercer and more competitive. The need for talented and high-performing employees (Note: Especially in Product Development departments and specifically Research Scientist positions) has been elevated because of the critical need to ensure water systems can meet and treat the different water challenges around the world. This could literally mean the difference between bigger contracts and established long-term maintenance contracts to service and maintain critical water systems for customers. As a result, STW has had to elevate its total rewards given the need to find and engage a highly educated and experienced workforce that will need to commit to longer than average working days to help STW achieve its strategic and financial goals. STW has had to maintain aggressive recruitment practices nationally and internationally. As a result, STW's compensation budget has exceeded by 5% each of the last two years ( 24 months) past their initial estimates. Expenses are very high in this high-tech competitive industry. STW hires a broad range of technical and scientific workers from all over the world. Many will have exclusive knowledge in water chemistry and engineering design; who most often make up the various types of scientific professionals and departments within most of their Technical and Product Development teams. Illustration 1: Revenue Distribution (Super-Tech Water - STW) As the Director of Compensation, you're asked to take on important support and assessment functions for the CEO and founder of STW. Focusing department-by-department, you will first need to re-assess the compensation structure in the Water Research Department (WRD), given this department requires highly technical and experienced water Chemists and Scientists. In fact, Water Chemists are in high demand. Second, you will work side-by-side with the new Director of the Research Department to complete a Pay-for-Performance merit allocation. Finally, you will complete a more comprehensive compensation administration breakdown using a cross-section of a few departments to gain a better perspective on the organization's overall compensation structure and performance. This will help make some early recommendations to the CEO and then a larger more robust plan for an organization-wide analysis next year. 5) The Executive Team at STW is reviewing each department as it works toward achieving its business goal. They're not certain whether to lead, lag or match in the Water Research Dept. Based on internal and external information (hint: look at the graph), what you know of the company's strategy and goals and the nature of the industry overall, what should STW do for this department? Explain b) Based on your answer in (a) above, calculate the new pay line for the positions in the Water Research Dept. [Note: If a lag decision is recommended, (5%) | If a lead decision is recommended, (10%) | If a match decision is recommended, (Determine required percentage). Use matrix below. Rounding rules apply [10 marks] c) Plot the new pay line with the policy values on the graph (Illustration 2). (Suggestion: Use a different colour in your graph to differentiate pay lines; Attention to accuracy is required. [ 2 marks]