Case Study on Compensation
Tumeet Kaus Dhillion
Prof. Angela Hould
Due: June 24, 2011
Zenith Medical Systems Incorporated is a relatively new firm that specializes in manufacturing and distributing information management systems for health care institutions. Zenith is a joint organization comprised of a major computer firm and a supplier of hospital products. Since the health care sector is continually growing and becoming more complex, the need for computer systems to accommodate for these changes increases. Zenith’s objective is to “develop an integrated system for patient records, staff and facilities scheduling, materials management, medication tracking, and financial management, in place of the separate systems that now exist in most cases” (p. 25). With that said, there are six departments in place: Marketing, Finance/Accounting, Human Resources, Systems Development, Systems Installations, and Systems Maintenance. In the beginning stages of operations, Zenith became the number one supplier of three firms that specialized in very different software systems. Zenith has run into major performance problems including high turnover, low morale and customer satisfaction levels, as well as significantly low revenue. Our team of top-notch compensation professionals from a leading compensation consulting firm has been called in to analyze Zenith. As part of Phase I, we must identify their various problems and their sources in addition to making all required organizational changes, construct a new and improved compensation strategy, create a job evaluation system, as well as a pay-for-knowledge plan. Phase II will be consist of adjusting the compensation system according to the market and market trends. This will result in better pay ranges between employees with similar rankings and more pay equity. Lastly, Phase III will encompass customizing the compensation of current employees, and prepare implementation development plans.
Section A: Identification of Current Organizational Problems Contextual Variables
First, in developing a functional and effective compensation system we get a greater understanding of the organizational context with which the compensation system will run. As Zenith is a medium-sized firm, its target market is not well defined. One of Zenith’s biggest issues is properly utilizing its employees in order to operate efficiently and effectively. Most of Zenith’s workforce is highly skilled, educated workers. The compensation system in place does not accurately differentiate this evenly between skilled and semi skilled workers. In fixing this, our team will examine both contextual and structural variables.
In examining Zenith’s task environment we will consider four contextual variables: corporate strategy, organization size, workforce, and technology. As noted earlier, Zenith’s goal is to create a unique system for patient records, scheduling, management, and tracking to be delivered to all interested clients. The issue lies within Zenith’s domain. Since Zenith is a medium-sized organization it does not specialize in one main product to accommodate a focused market like a smaller firm nor does Zenith prepare basic products so that they are able to customize them to suit the needs of a broader market like larger firms. Instead, Zenith does a little of both which complicates what specific products the firm offers. With that said, Zenith’s corporate strategy represents Porter’s Typology of focused differentiator style. Zenith provides a unique and custom product to a narrow client base. Zenith frequently makes changes and customizations on products to suit the needs of a client that operates a health care practice using very specific equipment. It is important...