Compensation Plan for Micro Pharm Bio Science Company

Compensation Plan for Micro Pharm Bio Science Company

Introduction

Micro Pharm Bio science is a small pharmaceutical company in the industry. The company has achieved success in shorter period of time compared with the industry standard. Because of the early growth of the company the structure of the organization is not yet properly made and formed. Due to the structural issues the company is facing higher retention rate. The human resource department of the company has analyzed this problem and found out that the company's retention rate is due to the compensatory plan. The structure of the company is not aligned with external environment and the management is not realizing this idea. The total compensation and benefit plan of the company is the main problem factor of the company.

Structure of the Company

The company at the moment is following adhoc structure in all of its division which is considered to be wrong according to many research papers on the organizational structure. The research has proven that all the departments of the company should not follow adhoc structure because of its sensitivity. This structured should only be focused in departments where creativity is encouraged. The companies who based on creative work do not follow organic or adhoc structure in all of its departments. All the creative departments follow this structure but the policy making department is suppose to be centralized and formalized. Only this action can ensure a stable working of the company which can lead to a healthy organization. The company has recently realized their structural problem and is making their organization centralized. All the decision making of the policy making department is becoming centralized.

In the middle of 2003 an external consultant analyzed the company and suggested that job evaluation and salary should needs improvement. This analysis has leaded the company to this point. The compensatory plan of the company is the main problem. Employees have this assumption that all the work they do is not considered with respect to the increase in the value of the company.

Current Trends

Recently, the annual employees' survey figured out that there is a dramatic decrease in job satisfaction, benefits and compensation. This survey shows that out of these, employee's compensation plan needs a prime consideration. At Micro Pharm Bio Science , employees get less pay than the market wage, which creates a de-motivation in the company. On the other hand, compensation reward based on seniority instead of performance bases.

The employees believed that the current reward system is highly unfair. The theory of Employees Motivation depicts that the perception of employees plays a crucial role in employees' motivation (Dreher & Dougherty, 2001).

Future Trends & Internal Equity

Instead of taking immediate action on this growing problem, the Riordan waited and let the things happened. The top management is aware of this growing problem and should take immediate action on employees' incentives and compensation plans. The actions must be specific and bold, and shall ensure the positive success of the ...