Compensation Program For Multitech Corporation

Mission Statement

The mission statement of Multitech Corporation is to provide fast, efficient and friendly services to their clients. They are a service-based company, and not like other companies, which means that they are not only in the business of selling the customers state-of-the-art electronic widgets and then leaving them with their widgets.  In its place, they target to give independent, consistent and professional advice to make sure that help their customers in recognizing the widgets for the business needs of the customers. They are not tied up with only one manufacturer, and thus they could provide the right product for the correct task and then back up with a fast, consistent and cost-efficient service of after-sales support.

Multitech Corporation, which is situated in Richmond Hill, is the manufacturer of state-of-the-art electric widgets. The organization began in the garage of the owner in the year 2012. At present, the yearly revenues of this company are $70 million and sell their products to the organizations of Canada and America who utilizes the widgets for their production (Abasili, Bambale and Aliyu, 2017).   The goals of Multitech are as follows:

• The organization aims to become a public company in 2018, which is at present a private company, as their sales are likely to touch $100 million. As a private company, Multitech is not registered on a stock exchange and is managed privately by the members of the company (Balleine, 2018). They want to become a public company so that the company is recorded on a recognized stock exchange and could carry on their business publicly.
• They also want to expand their business to as their business sales are likely to touch $100 million and looks for extra opportunities to gain more profit. They also want to include other locations and add sales staffs, improve the marketing teams and strategies, add more franchises, establish a union, offer new products and services, access the new markets, merge with other business, and expand globally (Blini et al., 2018).
• The company wants high capital expenditures and when an organization targets for high capital expenditures, it means that the management of the company is hopeful regarding the economy, development, and progress of the organization (Cadman and Vincent, 2015). The organization is less concerned about saving up for the future during the crisis period.  

1. The owner of Multitech Corporation is concerned that the organization is developing so fast that the collegial environment is disappearing from the company.  In a collegial environment, the co-workers would share the lunch and sometimes eat together at the same table (Chiew and Braver, 2014). There is always an atmosphere of happiness, the employees sit and share their stories regarding several entertaining events and circumstances in their lives. A friendly environment is maintained, and reduce the barriers and change into cooperation ((Indriyani, 2017). But when a significant percentage of the employees varies every year, and new people are interviewed and selected, whereas some other employees left the company for new jobs, it leads to the absence of collegial environment. This has happened to Multitech Corporation.
2. The need for high capital expenditures is another issue of Multitech Corporation. The owner always wants to decrease the cash outflows and increase the cash inflows (Yan and Sloan, 2016). The capital expenditures are the only flow which is directly managed by the owner, and it is always the owner’s responsibilities to spend the minimum amount of money on capital expenditures. It is critically essential for the owner that they still make the best utilization of each capital expenditures (Gupta and Shaw, 2014).
3. The owner feels the need for a professionally controlled compensation program. When the staffs are well paid and are satisfied, they have the possibility to stay with the organization. Right compensation is one reason for the staffs staying with the owner (Sarboini et al., 2018). That team is also motivated to remain as a part of the team and get the well-conducted job.
4. The company has funds but not unlimited funds.  It is due to the fact that the turnover of this company has always been low as their staffs have the feeling that they are part of a family and are still engaged in creating something remarkable.
5. The expectation of going public puts pressure on the company to look responsible and conservative. One of the vital changes that might take place in the company is the need for additional disclosure for the shareholders (Indriyani, 2017). The public companies are controlled by the Securities Exchange Act of 1934 regarding the periodic financial reports, which might be difficult for the newly public company. They also have to follow the rules of the Securities and Exchange Commission (Jung and Yoon, 2015). The small organization like Multitech Corporation have to face additional costs such as audit charges, shareholder relation departments, and accounting committees. The new organization also have to face extra pressure from the market which might make them concentrate more short-term development instead of long-term development.
6. The owner wants to maintain the corporate culture that made the company the success story at the beginning of the millennium. They are pleased to go to the offices or premises of the customers and talk over with the customers about their business needs before providing any suggestion and then allowing the customers to think over for the opinion of the company taking their own time (Johnson, Friend and Agrawal, 2016). It is also significant for their clients to understand that the company works with several top manufacturers of the world (Samnani and Singh, 2014). Hence the company could give advice for the right widgets for the correct work, and the company is not like other suppliers that could make efforts to sell their products as they have the large stock of their products.
7. At present, the organization has no formal compensation program.  Satisfied staffs are productive employees. The productivity of the employees is related to the compensation. It begins when they feel their importance in the company which enhances the motivation and loyalty of the staffs (Hendijani et al., 2016). The staffs are not only more encouraged to do a better job, but also, they would stay longer with the organization, they would know more and become more capable (Richter et al., 2017). All this would increase the productivity of the employees.
8. The employees are appointed on the basis of on market rates, and their benefits package is relatively negligible. The people always look at themselves in the best possible financial position. Selecting the right candidate for the first time decreases recruiting expenses and helps the owner to focus on other tasks. When the staffs know there is benefits package for them, they are more encouraged to give higher outcomes and productivity (Zheng, Wang and Song, 2014). The benefits packages and compensation plans become a vital factor of success.  

• The company has made sure that they give the same package as their competitors to their potential staffs, in order to attract the best candidates for their organization.
• Before deciding to go public, the company has to analyze all of the potential benefits and drawbacks that might come. This generally occurs during the underwriting method as the organization works with an investment bank to consider the advantages and disadvantages of a public offering and decides whether it is in the best interest of the organization at that time.
• The company has to take essential steps to establish again a collegial environment, where the responsibility and authority are equally shared by the co-workers. The company has to provide the work atmosphere to the employees that the colleagues smile at each other and does not have to hide from the manager.
• Proper formation of the effective strategies are considered to be vital as these will help in bringing the desired evaluation in the advancement and growth of the concerned business processes.
• Proper analysis needs to be done regarding the benefits as well as the drawbacks in order to execute the work processes as per the business requirement.
• It is strongly recommended that the corporate culture along with the policies of the firm needs to be followed and maintained by each of the employees associated with the organization.    

Point System – The organization can introduce the point system in their pay system. In this system, the company has to give points to the performance of their employees. It is due to the fact that the turnover of this company has always been low as their staffs have the feeling that they are part of a family and are still engaged in creating something remarkable. The enhancement of effectiveness in the pay system will help in motivating the employees to provide their best to the organization.  

Rating System – It might help the staffs and managers recognize the areas of opportunity for development, and take action to improve their performance. The rating system gives a single and reliable base for analyzing the performance of the employees (Llorens, 2015).  The product turnover and upgrading have been fast for the company, but not the performance of the employees.

Classification System – The classification system helps correctly to describe and analyze the responsibilities, works, and authority level of a task. The owner of Multitech Corporation is concerned that the organization is developing so fast that the collegial environment is disappearing from the company. The employment has increased from 80 in the year 2012 to 400 in the year 2017 (Osibanjo et al., 2014).   

Goals/Objectives for Multitech

Competency/Skill-Based Pay – When a staff is compensated according to their type and level of skills which are implemented in a workplace, it is called competency-based pay. The competency-based pay has the benefit that is structurally simple and uses already available income slabs (Nyberg Pieper and Trevor, 2016). Employees in Multitech are appointed on the basis of on market rates, and their benefits package is relatively negligible.

The staffs must realize that hard work and a high achievement would be financially rewarded. A strategy which provides incentives in exchange for achieving the targets could encourage all the staffs to prove their capability. When the productivity of the employees goes up, the net income of the company also increases and have excess money to rewards the employees. A staff who has been rewarded is more encouraged to stay with the organization. It would be a great deal to loss old staffs and the training of new employees. The rewards, if it is given to staffs who are considering to leave the organization might increase the retention of the staffs of the company and reduce the training expenses of the company (Odunlami and Matthew, 2014). Turnover of this company has always been low as their teams have the feeling that they are part of a family and are still engaged in creating something valuable.  

References

Abasili, F.N., Bambale, A.J.A. and Aliyu, M.S., 2017. The Effect of Reward on Employee Performance in Kano State Board of Internal Revenue. International Journal of Global Business, 10(2), pp.1-16.

Balleine, B.W., 2018. The Motivation of Action and the Origins of Reward. In Goal-Directed Decision Making (pp. 429-455). Academic Press.

Blini, E., Tilikete, C., Farnè, A. and Hadj-Bouziane, F., 2018. Probing the role of the vestibular system in motivation and reward-based attention. Cortex, 103, pp.82-99.

Cadman, B. and Vincent, L., 2015. The role of defined benefit pension plans in executive compensation. European Accounting Review, 24(4), pp.779-800.

Chiew, K.S. and Braver, T.S., 2014. Dissociable influences of reward motivation and positive emotion on cognitive control. Cognitive, Affective, & Behavioral Neuroscience, 14(2), pp.509-529.

Gupta, N. and Shaw, J.D., 2014. Employee compensation: The neglected area of HRM research. Human Resource Management Review, 24(1), pp.1-4.

Hendijani, R., Bischak, D.P., Arvai, J. and Dugar, S., 2016. Intrinsic motivation, external reward, and their effect on overall motivation and performance. Human Performance, 29(4), pp.251-274.

Indriyani, A.U., 2017. Effect of Compensation and Benefit to Employee Engagement through Organisation Brand in Indonesia’s Startup Company. Jurnal Manajemen Teori dan Terapan| Journal of Theory and Applied Management, 10(1), pp.83-92.

Indriyani, A.U., 2017. The Effect of Organisation Brand to Employee Engagement through Compensation and Benefit in Startup Business. Jurnal Manajemen Teori dan Terapan| Journal of Theory and Applied Management, 10(2), pp.109-135.

Johnson, J.S., Friend, S.B. and Agrawal, A., 2016. Dimensions and contingent effects of variable compensation system changes. Journal of Business Research, 69(8), pp.2923-2930.

Jung, H.S. and Yoon, H.H., 2015. Understanding pay satisfaction: The impacts of pay satisfaction on employees’ job engagement and withdrawal in deluxe hotel. International Journal of Hospitality Management, 48, pp.22-26.

Llorens, J.J., 2015. Fiscally driven compensation reform and threats to human capital capacity in the public sector. International Journal of Organization Theory & Behavior, 18(1), pp.22-46.

Nyberg, A.J., Pieper, J.R. and Trevor, C.O., 2016. Pay-for-performance’s effect on future employee performance: Integrating psychological and economic principles toward a contingency perspective. Journal of Management, 42(7), pp.1753-1783.

Odunlami, I.B. and Matthew, A.O., 2014. Compensation Management and Employees Performance in the Manufacturing Sector, A Case Study of a Reputable Organization in the Food and Beverage Industry. International Journal of Managerial Studies and Research (IJMSR), pp.108-117.

Osibanjo, A.O., Adeniji, A.A., Falola, H.O. and Heirsmac, P.T., 2014. Compensation packages: a strategic tool for employees’ performance and retention. Leonardo Journal of Sciences, (25), pp.65-84.

Richter, M., Schaut, S., Walser, D., Schneider, K. and Sawodny, O., 2017. Experimental validation of an active heave compensation system: Estimation, prediction, and control. Control Engineering Practice, 66, pp.1-12.

Samnani, A.K., and Singh, P., 2014. Performance-enhancing compensation practices and employee productivity: The role of workplace bullying. Human Resource Management Review, 24(1), pp.5-16.

Sarboini, S., Rizal, S., Surya, J. and Yusuf, Z., 2018. The Effect of Leadership, Compensation and Competency on Employee Performance. Jurnal Ilmiah Peuradeun, 6(2), pp.215-234.

Yan, W. and Sloan, M.F., 2016. The impact of employee compensation and financial performance on nonprofit organization donations. The American Review of Public Administration, 46(2), pp.243-258.

Zheng, S., Wang, Z. and Song, S., 2014. Pay satisfaction of employees: a case study of a state-owned science institute in China. Social indicators research, 119(3), pp.1219-1231.