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88055852 Zenith Assignment
Management (MGT611)
Niagara University
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Table of Contents
- A. IDENTIFICATION OF ORGANIZATIONAL PROBLEMS
- High Employee Turnover Rate
- Dissatisfaction of the Employees
- Dissatisfaction of the Customers
- Ignorance of the top management
- Lack of trust...............................................................................................................................................
- Lack of co-operation
- Decreasing Revenue
- Poor quality products and bad reputation of the company
- Late deliveries
- Falling Sales
- B. RECOMMENDED SOLUTIONS TO THE PROBLEMS AT ZENITH MEDICAL SYSTEM
- Reduce the employee turnover
- Hiring the right people
- Making the system Employee-Oriented
- Developing an appropriate strategic compensation package
- Proactive System Development
- Enhanced Quality of Service
- Lowered Costs of the Products
- Increased Employee Morale
- Higher Customer Satisfaction
- C. COMPENSATION STRATEGY
- D. JOB EVALUATION
- Compensation Factors
- Compensation Subfactors and Levels
- Allocating Points
- E. PAY FOR KNOWLEDGE [PFK]
- Works Cited
- Appendix
Lack of trust...............................................................................................................................................
Zenith has a large number of employees and they are divided into different departments. These departments do not have trust upon each other. They always blamed each other for the poor quality of work and tried to find in competency within other departments like system department thinks that installation problems are occurred because of the incompetency of installation department and pitiable understanding of marketing department. System maintenance blames system department for making a poor quality systems, installation department for faulty installation, marketing department for idealistic false promises with customers. All the departments have worst relationships with each other.
Lack of co-operation
Workers do not have trust on each other, as well as there is a lack of cooperation and coordination between them. Workers are limited to do their own jobs. They are not interested to do the help of their co-workers. They have a limited prospective around their job. They have no feelings of brotherhood and good relationships at the workplace. Their only interest is to fulfill their own needs. They have no spirit of teamwork and motivation to work together. They created an individualistic environment at the workplace.
Decreasing Revenue
Due to the insufficient work quality s faced a lot of problems with the systems .to deal with those problems and to improve the failures of systems, maintenance department have to spend a large amount of time in repairing the crashes or provide those quality products that were promised with the customers. In this way company spent its most time to perform those activities that are not helpful to gain the revenue, which is very helpful to raise its economy and profits.
Poor quality products and bad reputation of the company
Zenith failed to provide standard quality products to their customers. All customers have complaints about its product quality. They are very disappointed because they did not get those standard products that were promised by the company at first. Poor quality of the products left a negative impression on company’s reputation and in the market zenith loses its good reputation.
Late deliveries
Because of the keeping so much promises and unavailability of time, company always fail to meet the time lines and result is late deliveries.
Falling Sales
Sales of the Zenith medical systems are going to decrease continuously. Sales dropped loss of $5,000,000 is the result of unsatisfied customers, late deliveries, failure of systems.
The root causes for all the problems in zenith medical systems are its compensation system, managerial strategy and poor reward system. Employee’s base pay is low and variation in pay basis like performance pay, incentives and commission based pay also create a difference and problems among the workers. Classical managerial strategy is using in the Zenith medical systems. Top management
under strict guidelines makes decisions. Workers are doing the work under the controlled supervision and they have no right to give their opinions in the decisions making process. Reward system is also not good. No intrinsic rewards are for the workers that can motivate them towards their work. Insufficient reward system is responsible for the lack of two types of behaviour of the employees-membership behaviour and citizenship behaviour. Absence of this behaviour causes job dissatisfaction, lack of cooperation, lack of motivation in the employees.
B. RECOMMENDED SOLUTIONS TO THE PROBLEMS AT ZENITH MEDICAL SYSTEM
As it has been analyzed above Zenith faces many problems and for the intention of bringing it back to the advantageous position there is need to originate solution to these problems. An attempt is made to find out solutions in regard to the above-mentioned problems.
Reduce the employee turnover
Employee turnover has become a serious problem in the present corporate world. Changing jobs every few years rather than growing with one company throughout the employment life has now become a common thing. Turnover costs very high for many organisations and can effect financially. These costs generally include: recruitment, selection and training of new people, increased workloads, and overtime expenses for co-workers as well as reduced productivity. In the case of Zenith Medical Systems, from the development stage to the installation of the software programs there had been a relative increment in blaming each other departments for deficiencies. As a result departments are not working together and hence it results into the high turnover. At this stage Zenith should measure the cost of turnover, develop retention strategy and change the workforce culture. Some initial steps are suggested below to reduce the employee turnover.
Hiring the right people
The first and foremost step to reduce the employee turnover is to hire the right people. Hiring the right people who are good “fit” with the organisation’s culture means their values, goals and principles matches with those of the organisation. After hiring the right people a proper training and orientation is required to go a long way towards ensuring employee retention and loyalty. While looking up on the long-term goals, investment in upgrading the workforce is the best investment. So Zenith should plan its selection and recruitment strategy in a good way to reduce the employee turnover.
Making the system Employee-Oriented
Trust, loyalty and mutual understanding between the employees and management are the basis of many successful organisations with low employee-turnover. Zenith should give its employees an opportunity for advancements and should not micro-managed. Employees should be given credit for
Enhanced Quality of Service
The addition of having an inventory Zenith can focus on and promote service quality. Zenith was experiencing service quality issues when systems were being developed from the one basic template. With a set and catalogued inventory Marketing and Sales can start promote quality and ensure customers that these programs and software have been tested. They can focus on the benefits of each of the programs they offer and how it benefits the customer’s organization. Zenith can also allow some flexibility on pricing to the customer because of the reduced cost incurred during the development stage, further allowing some autonomy to Marketing and Sales in this area with set limitations properly laid out.
This flexibility will allow marketing and Sales to gage their potential customers and increase the chances of sales generating higher commission and revenues for the organization. Marketing and Sales will no longer have to focus on sales techniques that will increase the cost of the systems to the organization and can promote additional features at a bargain price again creating an additional revenue stream for them as well as the organization.
The inventory will not only help Marketing and Sales to provide service quality but it will also allow for Systems Development Department and its software engineers to continually test and maintain their inventory of programs. In doing this Zenith can feel confident that these continual tests will result in high quality programs reducing and ultimately eliminating frequent program crashes thus providing a systems program to the customers that meets their needs. The problem of delays in system delivery can also be eliminated with the newly founded inventory because these programs are already designed and tested thus can be shipped to the customers on time meeting the installation deadlines. The installation department will no longer have to deal with unsatisfied customers and won’t have to spend additional hours making installation thereby maintaining a better service quality.
Lowered Costs of the Products
With the changes made in the development of the software and maintenance of inventory, the designs will be already prepared thereby reducing time delays hence leading to reduced product cost. Zenith may initially have to spend additional resources to create this cache of inventory however once it is created the savings from additional labour costs and designing of each system from scratch will be substantially reduced. These product cost savings can then be used to increase the organizations cash flow and help to promote additional revenues through other area within the organization. With product cost being low
Zenith also has the ability to offer their programs and software at a lower price having a rewarding impact on the company’s ability to gain market share. In addition, it will help to increase the profit margins on the programs and software that Zenith sells to its customer and will enhance the profitability on Zenith’s balance sheets. Zenith plans to make its company public on the Stock Exchange with a balance sheet, showing profitability making it likely that Zenith will be able to attract potential investors that are looking for companies which have solid methods and a strong balance sheet to invest in, with the injection of new capital from investors Zenith will have more money to operate with and to continue
to grow in size, capability and market share. As Zenith continues to grow and increase its capabilities it will be able to expand its services and generate larger volumes of revenue.
Increased Employee Morale
Employee morale within Zenith dropped considerably because of all the problems the organization was going through. From the development stage to the installation of the software programs there had been an increase in the departments blaming each other for deficiencies. As a result departments were not working together and hence high turnover. Employee morale can start to show signs of improvement with the addition of simplified process incorporated in the development stage.
The addition of an inventory and some autonomy to Marketing and Sales it will be made easier for Marketing and Sales to explain the particular needs of the customers. The Development Department will easily get what kind of system software is needed to be prepared and make it ready for shipment within the timeframe determined. This will help to develop cordial relations between the Marketing and Sales and the Development Department. With the reduction in product cost and a greater sense of competitive pricing, Marketing and Sales will be able to generate higher sales revenue.
The Installation Department will also start to see increases in morale with fewer complaints about the installations and less delays in providing the systems to the customers. All of the changes made will go very far in increasing morale among the different departments with respect to the new simplified processes and will result in low turnover rates. Promoting the concept of team within the organization can now be implemented and sustained because each department will now help foster one another using the simplified processes and will stop blaming each other for issues arising internally or in the market place.
Higher Customer Satisfaction
Customer dissatisfaction has also played a role in the company’s losses in its second year of operations. Customers always had to face problems with programs they purchased whether it was systems related or on time delivery. With an inventory of quality programs suitably tested and capable to provide what the customer needs will help Zenith to increase customer satisfaction.
Customer Satisfaction is crucial in creating a good reputation for Zenith and will result in an increase in purchases in the future creating loyalty with its current customer and potential ones. With the implementation of these changes Zenith will also be able to meet timelines for delivery and installations helping the customer to continue its business function with no delays. Zenith will have the ability to provide standard products and services to its customers to compete with its competitors and also leading to enhanced customer satisfaction.
Management Director of Systems Development Advanced Level Citizenship
Management Director of Marketing Advanced Level Citizenship
Figure 2
Compensation Strategy Template Finance and Administration
Applied Sciences Applied Sciences Applied Sciences
Entry/Intermediate Entry Intermediate Advance 1. BASE PAY 65% 65% 65% 70% a. Market pricing b. Job Evaluation 65% 65% 70% c. Pay for knowledge 65% 2. PERFORMANCE PAY 10% 20% 25% 25% a. Individual performance pay 10% 20% i. Piece rate ii. Sales Commissions iii. Merit raises iv. Merit bonuses v. Special incentives b. Group/team Performance pay 5% 5% i. Gain sharing 5% ii. Goal sharing 5% c. Organizational Performance Pay 20% 20% i. Profit sharing 10% 10% ii. Stock bonus plans 10% 10% iii. Stock purchase plans iv. Stock Option Plan 3. INDIRECT PAY 25% 15% 10% 5% i. Mandatory benefits 5% 5% 5% Canada Pension Plan 5% 5% 3% Employment Insurance 5% 5% 5% 2% ii. Health benefits 5% 5%
ii. Stock bonus plans 10% 10% iii. Stock purchase plans iv. Stock Option Plan 5% 5% 3. INDIRECT PAY 10% 15% 10% 10% 5% i. Mandatory benefits 5% 5% Canada Pension Plan 5% 3% 5% 5% 3% Employment Insurance 5% 2% 5% 5% 2% ii. Health benefits 5% Supplemental health Insurance 3% Disability Insurance Dental Insurance 2% iii. Pay for time not worked Vacations, Holidays, breaks Sickness, Compassionate Absences
According to Armstrong 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 (Armstrong, 2002)
The purpose of job family development is first, to improve the employee capability in the work environment by selecting and placing the adequate personal to ensure better performance when executing the tasks; second, the retention of desirable employees who contribute to the organizations with their expertise and endeavour; third, improve individual execution of tasks and productivity; fourth, reduce the need of direct management.
According to table 1, the job family is listed above for Zenith Cooperation. It was divided by the finance and administration job family: entry level positions such as accountant, secretary and compensation clerk; the human resources job family: compensation manager and compensation officer both in the intermediate level; the management job family: manager of financial systems development, director of human resources, director of systems development and director of marketing; the applied sciences job family: Junior Systems Trainer, Junior Applications Programmer, Intermediate Applications Programmer, Senior Applications Programmer, Senior Systems Installation Specialist, Systems Integration Specialist, Senior Systems Hardware Analyst, System Design Analyst; and finally, the Communication and Marketing job family: systems marketing specialist and regional marketing manager.
As noted on the job family table, each of job position is classified as entry level, intermediate level and advanced level; these were made necessary to ensure the required behaviour is successfully achieved on Zenith organization compensation strategy. By classifying the job in levels, it is possible to determine what type of job requires more supervision. For example, the entry level positions, such as secretary, compensation clerk are characterized as jobs which positions required less supervision and tend to follow permanent bases guides. On the other hand, advanced level positions, individuals work more independently, have autonomy to make decisions and work towards a successfully accomplishment of tasks.
For the Finance and administration, the jobs secretary, accountant and compensation manager, there is a need to induce task behaviour. Therefore, the lower order needs must be satisfied which include physiological and security needs. To be able to fulfill those needs, a mix of compensation is based on 75% market price base pay and 15% indirect pay divided as following: 5% mandatory benefits which is 5% for Employment Insurance and 5% for CPP; 5% on Health benefits which includes 3% for supplemental health and 2% for dental insurance and 10% for individual performance pay as shown on figure 2.
For the communication and marketing job family, the plan is designed to promote the membership behaviour in the jobs Regional marketing manager and the System marketing specialist. The employees in the Marketing department are working individually to achieve their group goals. Organizational performance pay is the most suitable for the communication and marketing department as they must
Employment Insurance. There is also 5% of health benefits i. 3% of supplementary health insurance and 2% Dental insurance.
The desired behaviour for the compensation manager is citizenship behaviour. The compensation mix to induce citizenship behaviour in this job is as follows. The base pay is 65% pay for knowledge. The performance pay is 25% of which 5% is for the group performance – goal sharing, in order to increase the team efficiency and encourage the team player nature. 20% is for the organizational performance pay – 10% profit sharing and 10% stock bonus plan. This is for motivating them to be a part of the organization’s growth and well-being. And the remaining 10% is for the indirect pay of which 5% is for the Canada pension plan and 5% is for the employment insurance.
The Management job family has Manager of Financial Systems Development job at an intermediate level. And Director of Human Resources, Director of Systems Development and Director of Marketing at an advanced level.
The desired behaviour for the Manager of Financial Systems Development job is task behaviour. Hence in order to inculcate this, behaviour the following is the compensation mix. The base pay is 70% pay for knowledge. The performance pay is 20%, of which the 5% is for the gain sharing plan to induce teamwork and 15% for the organizational performance pay, of which 5% is for Profit sharing and 5% for stock option plan. And the remaining is 10% for the indirect pay, of which 5% is for Canadian pension plan and 5% is for Employment insurance.
The jobs i. Director of Human Resources, Director of Systems Development and Director of Marketing are at an advanced level. Here in order to encourage the citizenship behaviour the following is the compensation mix. The base pay is 70% of job evaluation. The performance pay is for 25%, of which 5% is gain sharing. The organization performance pay is 20%, of which 10% is for the profit sharing and 10% is for the stock bonus plan. The remaining 5% is for the indirect pay in which the 2% is for the employment insurance and 3% is for the Canadian Pension plan. This way the management will be more drawn in with the organization’s goals and objectives and hence they will work towards the growth and success of the organization.
D. JOB EVALUATION
This job evaluation is an effectively tool used to explain to employees their duties and responsibilities within Zenith Organization, as well as possible expectations the company is seeking to acquire by maintaining the existing employees and promoting future opportunities within the company.
According to Long, Job evaluation is an assessment of the relative worth of various jobs on the basis of a consistent set of job and personal factors, such as qualifications and skills required. The two major objectives of job evaluation are to develop internal standards of comparison and to measure relative job values within the organization (Long, 242)
While there several methods available, for Zenith organization was selected the point method system, which will include the four following factors: Skills, efforts, responsibilities and working conditions. Each factor will be specifically explained further.
Compensation Factors
Skills 50%
Each job position involves a specific level of knowledge and skills to successfully perform the job. It can be the abilities and competencies an individual might have which will be indispensable for executing the job. The knowledge and skills can be acquire by obtaining education, specialized training, or through work experience.
Education factor measures the least level of formal education accomplished, training specialization, professional certifications or licenses necessary to perform the job.
Experience factor measures the least total of related acquired job experience, gained by performing job related position or through other ways.
Efforts 10%
Within Zenith Company, there are many jobs that require different levels of knowledge and ability in solving problems and complexity.
Complexity factor is responsible to measure the diversity, difficulty, significance of duties and the demanding to execute the job.
Problem solving factor measures the ability an employee have to identify, analyze, emerge with relevant possible solutions and implement them; also the magnitude of autonomy an employees have when making decisions, suggest products and services and apply procedures.
Responsibility 30%
Analyze of probability of serious errors independently of possible cause which should include the responsibility of an individual in dealing money, equipment, services delay, time spending correcting the errors, inaccurate information data collected, decrease of organization’s morale and reputation.
Supervising others factor measures the level of accountability an employee has over other’s quality of work.
Accountability factor measures the complexity of a given job and access the potential results; and also the reason why certain job still part of the organization.
Working Conditions 10%
This factor is used to measure the censorial and mental concentration required to perform a specific job, which can be affected, by the environment, hazardous and safety conditions.
Level 2 (40 points)
Requires one to three years of related experience and working knowledge of related field.
Level 3 (60 points)
Requires more than three years to five years and working knowledge of related field.
Level 4 (80 points)
Requires more than five years to seven years of related experience.
Level 5 (100 points)
Requires more than seven years of related experience.
Complexity (60)
Level 1 (4)
Work is uncomplicated, includes manual effort and uncomplicated work routines.
Level 2 (8)
Work requires some level of experienced and some abilities to operate specialized equipment.
Level 3 (12)
Work requires moderate specialized skills, which requires some technical knowledge to operate specialized equipment.
Level 4 (16)
Substantial knowledge and skills acquired by vast work experience in the related field, which involve application of theoretical knowledge to pragmatic tasks.
Level 5 (20)
Expertise in theoretical complex techniques acquired by extensive work experience in the related field with special ability to develop applications.
Problem Solving (90)
Level 1 (6 points)
Supervisor, restricted possibility to exercise autonomous decision, constantly revises work. Report majority of problems to supervisor.
Level 2 (12 points)
Work is done under general supervision, sporadic autonomy to decision-making and application of procedures. Report general problems to supervisor.
Level 3 (18 points)
Work duties performed within considerable freedom, relatively independent judgment to apply procedures, freedom to give advice that affects practices. Inform chances and applied practices to supervisors.
Level 4 (24 points)
Develops work duties and apply practices to important function within a section, routine work and decision do not have the need to be revised by supervisor, often resolve difficult problems, but final results are revised by immediate supervisor.
Level 5 (30 points)
88055852 Zenith Assignment
Course: Management (MGT611)
University: Niagara University
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