Economics management essay study help on: Estoc Organization
Introduction
It is viewed that the Estoc Organization is very much new in the market of the banking sector and their major complexities are managing of the costs in the situation of the economic turmoil which hit the services of the finance, and they are trying to adapt the more centralized and integrated approach and develop the pay system that permits roles of the job to be integrated based upon their content, offering the organization great flexibility on the reward those in minimum pay and they are attempting for accomplishing in 5 year’s equal pay structure for the equal work. This report is the attempt for providing answers for all the questions. The approach suggested for the Estoc Company is the broad banding pay structure. In general, broad band permits more accountability and responsibility to leaders and managers on the decisions of the pay, so there would be no any complains on the individual department.
Literature review
It is very clear that after taking into consideration the requirements of the Estoc Company revealed as the need of the flexible workforce, the more centralized and integrated approach and particularly the good path of managing the costs (Boxall, 2000). The approach suggested for the Estoc Company is the broad banding pay structure. As per the IPN, in 1997, this broad banding system permits roles of the job to be integrated based upon their content and offers the organization more adaptability to motivate the people for what they have done for the organization beyond their description of the job, eradicating the requirement for the evaluation of the job. Organizations facilitate the job mobility because there is wider scope for the career development, because broad banding creates the flatter structure of the organization, and they de-emphasize the promotion creating consequently savings. In general, broad band permits more accountability and responsibility to leaders and managers on the decisions of the pay, so there would be no any complains on the individual department (Kidder, 2003). In general, it is assumed that managers in the organizations who used broad band pay structure shall have more flexibility in managing the workforce because they will be capable to shift the people in all the directions throughout the organization with no any constraints of limited explained jobs and limited pay grades. Broad Banding is generally implemented in 2 steps. In starting 3 to 8 broad bands are formed to eliminate the common number of prevailing pay grades. Bands are formed at the major differences or breaks and differences in skill or work requirements. For example Bands might be formed for clerical, hourly, executive level position and managerial position in the Company. It is very clear that Managers should find out how much amount should be paid to the workers in the similar band who execute distinct work in distinct roles of the firm. The rates of the pay might differ with the executive band for the job in finance, production or marketing (Marchington & Wilkinson, 2002). Second, the, market rates of the pay are evaluated to make the entire range of the pay for each and every band. With the help of broad banding, personal salaries can be determined partially by the market data of the labor in the effort to still competitive in market.
This movement may help the Estoc Organization to encourage the workers in the downsized organization with minimum promotional opportunities. It can be said that the broad banding would help in bringing the pressure over the managers of the Estoc organization to implement and develop the effective systems of the performance appraisal. It is very clear that before implementation of the broad band, managers must refer how it could affect the significant criteria for analyzing the effectiveness of the pay system in the organizations (Boxall, 2000).
Cost Implications
It is very clear that there are 5 levels of the employees in the Estoc Organization.
It is viewed that Level 1 contains admin assistant, customer service consultant, resource assistant, sales consultant, Team Coach and Regular Complaints Advisor. It is viewed that there is the cost implication for consultant of Non- mortgages because Estoc Median is more than group median and there would be the cost implication of (155000) for the 100 sales consultant managers. It is viewed that the Estoc Company paid more for the team coach of administration and service as compared to the standards of the Industry. There are 20 team coaches for the administration purpose on the other side there are 30 team coaches for the service purpose. It is viewed that both the Estoc Median is more than the Group Median by the amount of 1200. This shows that in total the Estoc Company pays 60000 more as compared to the industry standards (Fong & Kleiner, 2004).
It is viewed that level 2 of the Estoc Company includes resource consultant, mortgage advisor, team manager for the non mortgages, and team manager for the customer relations and resource supervisor. There is no any cost implication in level 2 of the Estoc Company because costs of the level 2 employees are matched with the industry standards (Harington, 2000). In fact, the Group Median of the Mortgage Advisor is more than the Company median by the amount of 1050.
It is viewed that level 3 of the Estoc Company includes communications manager, mortgage team manager, department manager for the non mortgage and Resource Manager. There is the cost implication of 10500 for the mortgage team manager because Estoc Median is more than market median by the amount of 1500. It is viewed that there are 7 mortgage team managers and there is the difference of 1500 among the group median and Estoc median. It can be said that there would be the cost implication of 10500 for seven mortgage team manager.
It is viewed that level 4 of the Estoc Company includes sales strategy manager, operations managers for Non-Mortgage and operation managers for the Mortgage Sales. There is no any cost implication on level 4 employees of the Estoc Organization. This shows that the Estoc Company pays to sales strategy manager, operations manager in relation with the industry standards.
It is viewed that level 5 of the Estoc Company includes head of business department, Head of service, Head of resource & planning and Head of sales. There is the cost implication for the Estoc Company because the Company pays more to the head of the business development in comparison to the group median by the amount of 4000. It is viewed that there is only 1 head for the business development and the Company is paying more 4000 amount to the business development head as compared to the industry standards. This cost implication can be reduced by paying 4000 less to the head of the business development in relation with the industry standards (Boselie, Paauwe & Jansen, 2001).
At last, in order to bring salaries in line with the market median, the Estoc Company should pay salaries to the employees in relation with the industry standards. If the Company pays salaries to the employees in accordance with the Group Median then there would be no any cost implication on the management of the Company. In order to bring salaries in line with the market median, the Company should have effective and proper pay structure in accordance with the Group Median and industry Standards (Fong & Kleiner, 2004).
Recommendations
It is very clear that Broad Banding pay structure is advisable to the Estoc Company. It can be said that the broad banding would help in bringing the pressure over the managers of the Estoc organization to implement and develop the effective systems of the performance appraisal. It is advisable to the Estoc Company that they should inform the employees as well about the changes in the pay structure of the organization. In general, employees need some time to adapt the changes in the organization and motivate the employees that this pay structure would help the organization in calculation of individual remuneration. The Broad band structure is advisable to the Estoc Company for effective pay structure. It is advisable to the organization before initiation of new pay structure they should adopt effective and clear communication strategy and develop a sense of trust among the employees (Boselie, Paauwe & Jansen, 2001).
After done the critical analysis of the current pay structure of the Estoc Company, it is viewed that there is a difference among the group median and Estoc median which results in cost implication for the company. The Estoc Company can bring the salaries in line with the market median if the Estoc Company would pay salaries to the employees in accordance with the Group Median. In general, there are five levels of the Company which includes different cadre of the employees. For example, level 5 includes various employees such as head of business department, Head of service, Head of resource & planning and Head of sales (Marchington & Wilkinson, 2002). After the evaluation of the current pay structure of the Estoc Company it is viewed that the Estoc Company pay more to the head of the business development and this problem can be solved if the Estoc Company pays to the head of the business development in relation with the industry standards. It is advisable to the Estoc Company to pay salaries to the employees in accordance with the Group Median for avoidance of cost implication.
Conclusion
It is very clear that the Estoc Company is trying to adapt the more centralized and integrated approach and develop the pay system that permits roles of the job to be integrated based upon their content and offering the organization great flexibility. At last, it can be concluded that the broad banding pay structure is advisable to the organization because this structure helps the organization in developing of the effective system of the performance appraisal. This broad band pay structure may help the Estoc Organization to encourage the workers in the downsized organization with minimum promotional opportunities. It is very clear that before implementation of the broad band, managers must refer how it could affect the significant criteria for analyzing the effectiveness of the pay system in the organizations. After evaluation of the current pay structure of the Estoc Company it is viewed that there is cost implication on the Company because of paying more salaries in comparison with the industry. The proforma pay structure is designed for the organization and it is mentioned in the appendix. At last, it is advisable to the organization to avoid any kind of cost implication; they should have effective pay structure in accordance with the standards of the Industry.
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