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Assignment 2: Evaluating a Hiring and Variable Pay Plan

In: Business and Management

Submitted By slynch3
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If you were an applicant, would the HVP program be attractive to you? Why or why not? The offer would not be attractive because it does not take into account the experience the candidate may have. The plan starts out around the industry level and that is why most of the better-qualified candidates go to the competition. The better candidates like to know they are getting what they are worth. The riskier the plan the more experience the person should have. The plan that is the most attractive depends on the experience level of the person accepting the offer. The bonus level is attractive for people that are well established but for those that are breaking into the field the pressure to perform may be too much. So keeping it simple to start is the safest way to ensure long-term success.
If you were going to be an offer receiver, which of the three plans would you choose, and why?
I would choose the standard plan to start with and as I learned the job, I would make a more informed choice. A plan that does not force me to perform as soon as I walk in the door but does offer some incentive to improve is the perfect plan for me. All things take time and hard work to master especially something you want to be successful doing. The fact that I could still earn a bonus while learning would provide enough motivation for me to start meeting expectations as soon as applicable.
Predict and justify if the HVP program will likely increase the job offer acceptance rate. The new plans allow flexibility and this should be attractive to new candidates. The standard plan seems to be the one that is the fairest. Under the future setup, a person just starting would not have the anxiety of bringing in new clients. They would concentrate on keeping the current customers content while learning how the company does business. This approach will allow them to build a rapport with the customers and learn key skills that will allow them to bring in new clients in the future. Once they start bringing in new clients then they should opt out and choose the higher risk plan. If they are not able to bring in new clients, they should opt to the low risk plan. The freedom to move between the plans will allow the candidates to learn and grow.
Predict and justify if the HVP program will likely reduce turnover.
The new program should reduce the turnover rate because it allows the candidate to choose the plan that is best for them individually. When a candidate has a choice of the performance level, they have to reach it sends a message that they can influence their own future. Most people want a chance to prove themselves but they want to feel comfortable with what they must accomplish. Most of the compensation plans have some sort bonus plan built into them so that the people have a chance to make more money. This opportunity accompanied with the freedom of choice is what makes the plan likely to reduce the turnover rate. Another reason the plan will likely reduce turnover is the current employees can choose one of the plans versus the plan they are in now. This will level the playing field and reduce the claim that the new plans make it easier for the new employees to outperform them. It will also reduce the perception they are being penalized for their tenure.
Give your opinion about how current associates will react to the HVP program. The current employees will most likely not agree with the plan since they did not have the same opportunity to be successful. Any organization that changes what they have done in the past must realize that the current employees may have an issue with the changes. They may see it as an unfair advantage that the new employees have over them. They may also feel like the new employees are not putting in the work required to be successful. The more tenured employees are the ones who will be responsible for training the new people on how the company works. Some of the people will welcome the changes because it will help attract talent and entice others to stay longer than they do now.
One of the issues the company currently has is the high turnover rate and the current employees should welcome anything the company can do to change that. The fact that they can change plans may not go over that well with employees that are performing above expectations and have been doing so for years. They will likely see it as a slap in their faces or a plot to get them replaced by younger more hungry employees.
Suggest what issues and problems the HVP plan will create for Human Resources and for the hiring manager. The current plan does offer the chance for the current employees to change the way they are compensated. This may cause the current employees to feel like the new employees have an unfair advantage. The HR department will have to make sure the current employees have a chance to voice their concerns and then address them. HR will also have to make sure that the new plan does not leave room for any discrimination claims or unfair competition claims. Job performance levels may have to change and the way the employees are evaluated will need adjustment too. The old performance guidelines will be tough to enforce because HR will now have to keep up with who is on what plan and what they are accountable for achieving. They will also have to weigh the importance of customer surveys, bringing in new clients, and billable hours. In each plan, the weights will be different so HR will definitely have its work cut out for them.
The hiring manager will have the added burden of deciding if the candidate is qualified for the plan they are selecting. It does leave room to make a bad hiring decision because if the candidate selects the high-risk plan and does not meet the quotas they may be discouraged and choose to leave. There is also nothing in the new plan that will allow the company to fix a hiring mistake like a probationary period or opt out clause. The manager may spend more time researching the candidate’s competences to ensure they have the KSA’s to perform on the level they choose.
Propose and justify changes in the HVP program. What incentives will the company put in place for the current employees to ensure they will not have hard feelings towards the company and the new employees? The only thing being offered is an opportunity to switch plans at their current salaries. They should allow the current employees a chance to switch with an adjusted starting income based on their current performance. The justification is you want the current to keep doing the job at the same rate or even improve. The more value a person is shown could inspire them to do more and that is a direct benefit for the company. They could also change the bonus rates to reflect tenure. This would show people what they could gain by being loyal and hard working.
One of the biggest hurdles for the company is high turnover and this slight change could help reduce that. If that does not sit well with upper-management they can offer, a stay on bonus that every employee will qualify for after they have stayed the amount of time required. This is another attempt to curve the turnover problem. There may not be a way to quantify whether or not the money spent has an impact but the bottom line and customer service should improve.

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