Human Resource Compensation Strategy
Executive Summary:

Every company has managers who are responsible for a specific department. The primary responsibility of these managers is achievement of the set objectives. It is also to be ensured by them that the objectives of their departments are attuned with those of other departments in the company. Ultimately, managers of every Department have a collective role to guarantee that the overall objectives of the company are attained. The responsibility of a marketing manager is very important in ensuring that marketing efforts translate into sales. His role is important in ensuring that customers are ever aware of product availability in the market. Besides, he is also tasked to ensure that the products possess competitive advantage in the market as well as fulfilling consumer needs. This is because, ultimately, the revenue earnings are directly proportional to the sales in the market. Thus, it is the responsibility of the marketing manager to craft polices for revenue augmentation.

In Fort McMurray and the entire Canada, a boom is witnessed within the software industry leading to the nation fast turning into an IT giant. Rise in the number of software companies which are into the business of software provision implies that the level of competition is speedily on the rise. While a new company is entering into the market, it has to weigh all the aspects impacting it and undertake the needed precautionary steps. Because of the business risks, a consistent plan must be in place while working out a compensation plan to be paid to the various personnel. The company must be capable of making profits, being its primary objective, and still be able to meet its expenses smoothly. Recourse to the equity theory is crucial in order to stay afloat in the competitive industry. Bonuses are equally important which is performance based. This guarantees that the employee is encouraged and strives towards exemplary performance because of the additional remuneration. The company comprises of the Board of Directors, the Chief Executive Officer, the managers in charge of different Department and other base staff.


Every company has employees to discharge the various responsibilities. Compensation is required to be paid in exchange of work extracted from them in order keep them motivated as also continue to perform and maintain their personal commitments. The company owners must be in agreement with salary level that must be reasonable and fulfill the expected standards.

A principled yardstick must be there for guaranteeing employee satisfaction and the company is able to achieve its finest objective of profit maximization. Any shortfall in payment of appropriate remuneration to the employees will result into rival companies poaching on the employees in their companies. The norm must precisely state every possible details regarding the mode of payment, its terms, any additional amount and a calculation about its arithmetic result.

Statement of problem

The biggest test that the new marketing managers encounter includes the pressure which they are subjected to. These pressures could be because of the competition in the market ruled by reputed business enterprises. Brand loyalty ensures that consumes make repeat purchases from established companies. There is also apprehension about the risks involved in maintenance of quality. New companies also face risks of their products not being bought by some consumers. This might translate into lower sales, nevertheless the expectation of the company is massive sales in an attempt to increase revenues as also fulfill their optimum goal of maximizing profits. Therefore the manager is faced with the challenges of meeting the goals and expectations of the company.

The manager is able to spot the cause of the problem as being suboptimal norms being applied in undertaking the marketing process. Another reason might be ignored risk factors and therefore outcome of different results from the expected ones. The problems could also lie in the coordination of activities between the manager and also his subordinates. This could also imply that the set objectives are not attained. In case the strategies that are intended to be applied are not properly communicated, it could outcome in failure in attainment of the eventual objective.

The problem might also emerge from the upper hierarchy as well. They could be employing unnecessary pressure tactics in setting of ideal objectives. In case the set goals are very difficult to achieve, employees will eventually fall short of achieving the same regardless of trying hard. Besides, the upper hierarchy might also dump the responsibilities on the managers without offering cooperation of any sort. This implies that certain doubtful issues remain unresolved. The managers face morale crisis in case they are falling short of the set goals and as a result, this morale crisis is passed on to the subordinates.

Problems could be both long and short term. Short term problems arises at the initial stages for instance while launching the product in the market where the product might face resistance in acceptance from the customers prior to knowing about the product. Absence of morale also constitutes a short-term problem which goes away when sales volume starts picking up. Long term problems include competition from the reputed companies who are leader in their business area and each business wishes to maximize their profits.

The manager also encounters issues relating to following the corporate ethics in the industry which is required to be maintained. Several occasions arise when the managers are lured to evade the ethical practices to earn more profits. Managers are entrusted with the responsibility to makes sure that they adhere and apply ethically set norms in their quest for goals and gain competitive advantage.

Taking into consideration all these problems, the manager is required to take decision to progress in order to effectively reach the goals of the company. It becomes their serious responsibility to make sure that they provide the subordinates with precise measures regarding the manner in which they must discharge their duties towards attainment of the fixed goals. The subordinate personnel attend to their duties on the instructions handed out to them by the managers.

Causes of problem:

Poor communication skills on the part of the managers are the main reason for every problem. Sometimes seniors use rude language while addressing their juniors which result in low performance levels. Ambiguity in communication is also a problem leading to misconstruction. This is also a cause of underachievement of organization goals. Impolite behavior leads to low self-esteem among employees and after entering the field for marketing and selling their products, lack of enthusiasm does not portend well with the consumers. This leads to less sales volume.

A major cause of managerial problem stated above is sarcasm. A manager must ensure that all aspects are addressed to while taking decisions in the company. The approach in handling market competition must be comprehensive in order to ensure that the objectives of the enterprise are attained. Managers must also be trained to support teamwork so that all the ideas are pooled to come up with the most perfect solution.

From the above stated analysis, it is amply clear that manager must pay attention to the findings of the suppositions which have already been proven. They must also adhere to the proposed models based on the success attained by companies who have made practical use of the models in undertaking the managerial responsibilities.

Decision criteria along with other solutions:

In the route to choose the ideal solution for a company, a number of factors are required to be considered. A major concern in implementation process is the time lag. In case the time horizon is extremely long, it indicates that the decision might not be profitable to the enterprise. Although the decision might benefit in the long run, the perceived benefits might be too miniscule to be visible. If the benefits offset the limitations, then only the manager should execute the particular decision.

Besides, the Manager must take into account the physical costs. Where the cost of implementing the decision is extremely high, the ultimate benefit might be damaging. The manager must be very careful in applying the decision and choose only ones that are able to bring in profits for the enterprise. In the end, this is the optimal objective of the enterprise. In case gains are not in sight, the manager must seek alternative action route. He must also consider if the decision he undertakes in acceptable to the management. In situations where the decision does not match the other strategies which the enterprise has assumed, the manager should refrain from implementing the same. In case the decision which has been implemented fails to work towards the attainment of the goals of the enterprise, it should never be applied. Besides, where a decision clashes with the accepted ethics, it must never be applied.

Solution recommendations and justification:

After a thorough analysis of all the responsibilities tasked to any manager, including a marketing manager, a strategy which guarantees that requirements of both the parties are addressed needs to be implemented. A solution needs to be in place for fixing responsibilities in situations where the suggested decision and its outcomes do not proceed as planned. Calculating the amount of compensation which is paid in favor of the manager comprises a criterion which would ensure that he acts as per the best interests of the enterprise. After establishing the location of the company in Fort McMurray, Alberta, Canada, it implies that massive competition exists since a lot of software companies are found there.

My proposal is to base the remuneration on equity theory which states that the amount of salary is proportional to the contribution that the manager makes to the company. But, this never implies that astronomical salaries have to be paid at the cost of the shareholder's profit. A balance must be maintained and any failure would lead to attrition of the manager to other companies. The basic salary must be determined by the Board of Directors after undertaking a survey to verify the salaries of other managers in companies in the same industry. Terms under which bonuses qualify must also be stated. Paying bonus elevates the morale of the manager and when the same is performance based, good results are expected from the managers. This will ensure that the objectives of the enterprise are fulfilled and that the manager is aware and will be held liable in case of irresponsible decisions.

The enterprise must also extend long term benefits as an incentive for employers. For example, better performing managers must be given stock options or given shares at lower cost than the quoted price. This will help in motivating the managers towards the set objectives. While devising compensation plans, the Board of Directors must comply with the laws governing such plans for instance retirement and stock option plans. They should also align with the set ethics of not poaching employees of other companies within the industry in the lure of high salaries. There is also a compulsion before the company to follow the dashboard approach. It helps compare the breakdown of the total pay component and the competitors. The bonuses, the long-term benefits must fulfill the standards and be as competitive compared to those of the competitors. This recommendation is based on the equity theory which guarantees fairness for both the parties. The enterprise must thus observe the strategies which are stated in the same, in order to achieve the set objectives.


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