Oakland Oaks Country Club, Essay Example

Internal Structure of the Company

Internal Alignment

An important part of a company’s structure, as it relates to human resources (HR), aligns with strategic management and places emphasis on employees being a primary component for helping the organization obtain and maintain a competitive advantage. To ensure effective and efficient implementation of strategic processes, an organization must adopt strategic HR practices, which includes developing procedures that facilitate building up its human capital. This is directly related to the organization’s internal alignment initiatives, which builds its internal structure (Werbel & DeMarie, 2005).

The internal structure of Oakland Oaks Country Club, as listed above and illustrated in the organizational chart includes 83 employees total—8 senior salaried staff members and 75 hourly staff members. Oakland Oaks is strategically focused to maintain positive internal alignment for maximum efficiency and profitability of the company. Internal alignment pertains to various relationships in an organization among various positions, skill sets, and competencies of its employees, in regard to pay. This is also known as internal equity (Ch. 3 Notes, 2014, Slide 2). According to Werbel and DeMarie (2005), internal alignment is a human resources (HR) strategy that focuses on consistently aligning internal HR practices for the purpose of building an organization’s employees’ skills, knowledge and capabilities. This is important for supporting initiatives that align with the organization’s competitive strategies and to achieve business goals.

Supporting organizational strategy involves supporting the organization’s work flow and ensuring that its customers receive goods and services efficiently. In addition, motivating employee behavior in the workplace is an important aspect of supporting organizational strategy (Ch. 3 Notes, 2014, Slide 3), because happy and secure employees work better. One of the main purposes of organizational internal alignment is devising an internal pay structure that works on all levels of the organization. The pay structure is determined by organizational levels, pay differentials between these levels, and the criteria used for determining differentials and levels (Ch. 3 Notes, 2014, Slide 4). This is best done by ensuring adequate person-environment fits (PE fit) within an organization, which ensures effective strategic development in HR and creation of informative and consistent messages by organizational leaders that are shared with all employees. PE fit pertains to horizontal and vertical alignment of HR management and is related to organizational competencies, which organizations use to create competitive advantages in their fields (Werbel & DeMarie, 2005).

Organizational Levels

To adequately determine PE fit and pay structure, Oakland Oaks has carefully structured its organizational levels with a height of four and a sufficient span of control under each level, with strategically placed reporting relationships, to ensure efficient work flow within the organization.

The following levels and span of control for Oakland Oaks are illustrated in the organizational chart above (Figure 1); however, this gives a little more detail:

• Level 1: The head of the company is the only person on the first level (salaried position).
• Level 2: Seven people occupy this level and are members of the senior management staff (salaried positions).
• Level 3: Forty-five people occupy this level, which include administrative, support, sales, culinary, and maintenance staff (salaried positions).
• Level 4: Thirty people occupy this level, which include service and housekeeping staff (hourly positions).

The span of control for this organizational structure is as follows: The 4^th level employees (servers, bussers, bartenders, and set-up/clean-up crew) report two levels up to the dining and catering managers (2^nd level). As well, the club house supervisors (3^rd level) report to the dining and catering managers, but supervise the level 4 employees. On the level 2, the club controller manages the administrative, customer service, HR, and accounting departments (3^rd level). While, the head golf professional (2^nd level) manages the pro-shop and first tee employees (3^rd level). In the culinary department, the line cooks, dishwashers, and cleaning staff (3^rd level) report to the head chef (2^nd level). The grounds keeper and course maintenance workers (3^rd level) all report to the greens superintendent (2^nd level). And, finally, everyone on levels 2, 3 and 4 are managed by the general manager (1^st level). This is the chain of command, which covers an effective span of control for the smooth running of the organization, which is has a hierarchical structure.

After much research, it was determined by the owners that a hierarchical structure for Oakland Oaks was the best choice for the organization because of all the various job responsibilities required to run a business such as this. There several departments within the organization that require expertise and experience that is specialized, which means employees must meet strict and specific criteria to qualify for each position. There is little room for cross training, which is why each position description is specifically designed for those with the experience. Additionally, with 83 employees, breaking down managing and reporting relationships is important for efficient work flow in all of the different and specialized areas of the business. Furthermore, a hierarchical structure helps the company better organize its pay differentials, which are multi-levelled. The decision to make the pay differentials for multiple levels came from the need to ensure employees are paid within acceptable ranges for their experience, education, expertise, and skill sets, which are referred to as human capital (Ch. 3 Notes, 2014, Slide 18).

Another important aspect of an internally aligned structure is the factors that influence it. For Oakland Oaks, the top five factors are (1) facilitating good employee performance, (2) reducing turnover, (3) aligning with company objectives, (4) compliance with government regulations, and (5) increasing profits.

Job Analyses

It is important for an organization to develop a job analysis of each position in the organization, which includes job descriptions, and evaluating positions within the organization, to develop a working internal organizational structure. As the owners of Oakland Oaks, we decided that we will have our in-house HR specialists conduct the job analyses and develop the job descriptions. Once the job descriptions have been determined and outlined, the responsibility for evaluating and assigning the job levels will be that of the general manager and the owners, with the input of HR. This will be based on the job-based structures approach, which includes the employees’ tasks and the expected outcomes of performing those tasks (Ch. 4 Notes, Slide 2).

Additionally, the job descriptions are levelled on the point method, based on compensable factors and weighted factors, which are numerically scaled (Ch. 5 Notes, 2014, Slide 14). This approach was chosen to allow the most accurate and fair structuring of job descriptions and pay scales. The largest foreseeable hurdle in persuading our workforce to embrace this structure is competition among employees, which may lead some employees feeling slighted.

Job Descriptions

Job descriptions are important so that employees know exactly what is expected of them, and management has something by which to measure employee performance and to construct pay scales and compensation plans. The table below overviews job descriptions for the positions at Oakland Oaks Country Club, for the purpose of the job analyses for the company. Information in the table is taken from the Occupational Outlook Handbook on the Bureau of Labor Statistics website.

Competition for Employees in the Market

After the job descriptions and analysis are completed, we will then determine how we will make Oakland Oaks Country Club a preferred place to work. It is important to attract and retain employees, as turnover is costly. One of the main reasons that people seek out and stay with a company is the compensation plan. Therefore, we will use this as a strategic factor in attracting and retaining the best employees.

In keeping in line with what most other employers do, in terms of employee compensation plans, Oakland Oaks will use the match compensation approach for hourly employees. This approach will be used for all levels of the organization, to ensure wages are in line with those of Oakland Oaks competitors’ (Ch. 7 Notes, 2014, Slide 25). Pay is a major labor market factor for Oakland Oaks. However, even though this means that Oakland Oaks’ potential to attract new employees, based on pay will be about the same as competitors in the labor market, Oakland Oaks plans on adding value in other areas of compensation through its benefits. This is how the organization plans to deal with the issue of compensation and benefits from a competitive perspective.

In addition, Oakland Oaks will adopt the Signaling theory for hourly employees and the human capital theory for salaried employees. The signalling theory posits that an employer design pay levels strategically to signal types of behaviors sought, to both current and prospective employees (Ch. 7 Notes, 2014, Slide 18). This would be best implemented for hourly employees, since this level may likely have relatively high turnover rates, due to the comparability of pay with competitors for similar positions. For salaried employees, Oakland Oaks will use the lead approach, which will give the organization the ability to attract and retain the highest quality employees for its senior and executive staff (Ch. 7 Notes, 2014, Slide 26). In addition, the human capital theory for salaried employees is the best option because it posits valuing the skills and abilities of this level of employees as being worth the time and expense put into acquiring them. Therefore, higher pay is required for this category (Ch. 7 Notes, 2014, Slide 19). These factors could have a significant effect on the organization.

Another thing that could affect the organization is relevant markets. Three markets that fall into this category for Oakland Oaks are (1) the food service market, (2) the sales market, and (3) the executive management market. These markets are potentially labor force competitors for Oakland Oaks, which is something to be taken into consideration when designing the organization’s compensation plans and pay structures.

Pay Structures

Oakland Oaks’ pay structure will be market-based, as industry trends indicate this is what most organizations are doing, according to the Society for Human Resource Management. Market-based pay structures generally have pay ranges from 30 to 80 percent with midpoint progressions at 10 to 15 percent (SHRM, 2012). The pay structure will be determined by establishing minimum, midpoint (market line), and maximum ranges. These ranges will be created based on factors such as a position’s career path potential, promotion potential, and level of skill, expertise, and education of the employee holding the position, as outlined in  Ch. 8 Notes (2014). In addition, there will be salary grades within pay ranges. Jobs with the same grade will have the same pay ranges. The pay grades will have some overlap to allow for career movement throughout the pay structure, and these overlap points will be based on factors such as an employee’s skills achieved and continuing education (Ch. 8 Notes, 2014). Positions for Oakland Oaks have been researched and are overviewed in Table 1 above. However, we will detail one (catering manager) in a more in-depth manner to illustrate how the pay structure will work.

The catering manager’s market line (or midpoint) salary is $52,484, which is at the 75^th percentile for market salaries of this position. The salary ranges for the catering manager position are broken down as follows, according to Salary.com (2014):

Range Maximum:       $60,037 (90^th percentile)

Range Midpoint:        $52,484 (75^th percentile)

Range Minimum:        $37,524 (25^th percentile)

Below Range:             $31,458 (10^th percentile)

Median Range:           $44,187

The catering manager for Oakland Oaks is paid a salary of $52,484 (midpoint), which is well above the median salary range of $44,187. This is in line with Oakland Oaks’ objective of attracting and retaining the best employee talent.

Table 2 illustrates the national average for a catering manager’s total compensation package and pay structure. The Oakland Oaks catering manager is paid higher than the national average salary, according to the base salary.

The theories of lead and match applied to salaried and hourly employees, respectively will follow the pay structure of the example in Table 2. In addition, various pay ranges will be used within each position’s national pay range average, based on each individual employee’s education, experience, and skill levels and will be used to determine whether the employee falls into the minimum, midpoint, or maximum pay range for a particular position. The reason this type of pay structure will be implemented is to be fair and equitable in paying employees according to how they have established their own worth in the industry.

Status Update

Based on the information and data in this analysis, it is noted that Oakland Oaks Country Club is headed in a positive financial direction and is in good standing with its strategy for attracting and retaining the best talent in the labor force. The information gathered will help the organization plan and strategize to meet company objectives and to align the company, internally, with future projected growth in the industry. Oakland Oaks Country Club aims at gaining the best competitive advantage in the market to align itself in the best market position possible, to realize enhanced profits and continued growth.

References

BLS. (2014). Occupational Outlook Handbook. (Bureau of Labor Statistics) Retrieved from United States Department of Labor: http://www.bls.gov/ooh/

Ch. 3 Notes. (2014). Defining Internal Alignment [Lecture Notes]. ORG 460 F 14 Module.

Ch. 4 Notes. (2014). Job Analysis [Lecture Notes]. ORG 460 F 14 Module.

Ch. 5 Notes. (2014). Job Based Structures [Lecture Notes]. ORG 460 F 14 Module.

Ch. 7 Notes. (2014). Defining Competitiveness. Retrieved from ORG 460 F 14 Module.

Ch. 8 Notes. (2014). Pay Levels, Mix and Structures [Lecture Notes]. ORG 460 F 14 Module.

Salary.com. (2014). National Averages. Retrieved from Salary.com: http://swz.salary.com/salarywizard/Catering-Manager-Salary-Details.aspx?hdcbxbonuse=off&isshowpiechart=true&isshowjobchart=false&isshowsalarydetailcharts=false&isshownextsteps=false&isshowcompanyfct=false&isshowaboutyou=false

SHRM. (2012). More Organizations Shift to Market-Based Pay Structures. Retrieved from Society for Human Resource Management: http://www.shrm.org/hrdisciplines/compensation/articles/pages/pay-structures-shift.aspx

Werbel, J. D., & DeMarie, S. M. (2005). Aligning strategic human resource management and person–environment fit. Human Resource Management Review, 15(1), 247-262.