Right Now Compensation and Benefits System, Case Study Example

Some of the problems identified in this company include pressure from external competitors – In the modern world we live in, companies are willing to go an extra notch to get the best cream of a crop talent. As a result, RightNow!’s competitors were willing to establish a handsome compensation and benefits package to retain and attract talent from other companies.

Executive compensations – it is important for public companies such as RightNow! to reveal the salaries of their topmost executives. The major problem was deciding the number of salaries to award them to maintain a balance between attracting good talent and being acceptable. The stakeholders of the company did not well receive the revealing of top executive salaries.

Maintaining internal equity- under this problem, even if RightNow! company tried to achieve equity in the pay of all employees, it was not fully achieved as there was the question of wage gaps which raised a lot of concerns on what colleagues earned.

Differences in employee expectations- there is usually a conflict between employers and employees on what the organization wants to pay and what the employees want to be paid. For example, in RightNow!’s company, after the list of what employees earned was out, some wanted a rise or walked out.

Closing thoughts- RightNow!’s compensation and benefits strategy should be interconnected between the financial statements of the company and the goals of the business. When poorly managed can result in a rift between the employer and the employees.

Employees’ access to company-wide compensation data

Employees should have access to the company’s wide compensation data because of the following;

To reduce pay disparities: Open access can be used to ensure that wage gaps are reduced and that workers are paid equally for similar work undertaken.

Promoting employee motivation: employees will strive hard to meet their set goals in the company, leading to them qualifying for compensations and benefits from the company. In the long end, this will motivate the employees to work hard to be compensated regarding performance.

Improving productivity: compensations and benefits based on performance will lead to as many employees striving to achieve the best and perform as expected and this in return boosts the productivity of the company positively.

On the other side, employees should not have access to the company’s wide compensation data because of the following;

Encourage dishonesty due to salary comparisons:  it is believed that less paid employees were most likely to cheat compared to their highly or median paid (Kassa 110). However, the study indicates that this may happen only if the less paid employees feel that the wage gap is unfair.

Lack of privacy: Some employees may not be comfortable while their salary is openly broadcast to their peers or the general public if the company makes that information public or somehow leaks outside the company. This method may also lead to open criticism.

Steps to be taken by Hank in RightNow!’s company

Hank should set up an emergency meeting whereby the shareholders, together with the company’s management, shall comprehensively discuss the way forward of the company. For example, the discussion should determine which method to adopt, either an open or closed salary policy.

Conduct a benchmarking activity on the salaries with appropriate salary regulatory bodies to determine the most appropriate wages for each group of employees in the company.

Eliminate all salary inequities. The first thing to avoid conflicts, especially from employees undertaking similar work but different wages, is to ensure that employees under the same group are paid equally unless stated otherwise by their productivity rates.

Disclose what formulas are used to determine the salary an employee will earn in RightNow!’s company. The method of compensation and benefits should also be clearly explained to all employees to eradicate any forms of doubt or questions.

To encourage productivity and healthy competition among employees, the performance ratings determined by the performance levels should be made available and shareable to the employees regularly. This will assist in boosting motivation for the workers and improving their performances.

Works cited

Case, John.” Managing people: why salaries aren’t secret”.Harvard business reviews, May 2001, https://hbr.org/2001/05/when-salaries-arent-secret.

Kassa, Biniyam Asmare. “A Decision Support Model for Salary Structure Design.” Compensation & Benefits Review, vol. 52, no. 3, June 2020, pp. 109–120, doi:10.1177/0886368720905696.