Marshal and Gordon: Designing an effective compensation system Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Marshal and Gordon: Designing an effective compensation system Case Study Solution

Background

Marshal and Gordon is a leading public relations (PR) firm worldwide. It is a key player in the PR industry with a wide range of services such as media relations, investor relations, lobbying, crisis management, fundraising, and event management. The company has been expanding its services to various disciplines such as management, finance, marketing, HR and management. It has recently launched a program named EPP (executive positioning practice)to provide services of positioning the top industry executives to build and redefine the brand image and portray a positive image of the company to the client.

The increased competition in the PR industry has raisedconcerns for the key players to take care of their principals, partners, associates and employees because they couldbe approached by the key competitors to join them. On the other hand, the economic down turn has also negatively affected the firm’s revenues, but it has to introduce the new compensation system in the organization to encourage and motivate the employees to have long relation with the company on mutual benefit. The question arises what compensation should it adopt to address the challenges that it has been facing internally and externally?

Problem statement

How could Marshal & Gordonencourage principals, partners, associates other employees through the compensation system that could motivate individualistic approach but emphasize on the teamwork as well? And whatcompensation system should be adopted that could address the reservations of the employees?

Analysis

The current compensation system of the firm has created many complications for the organization because, the employees, and associates are not agreed on the formula to share the reward and bonuses. Also, concerns have been raisedby the employees and associates because their efforts are regardedinsignificant, and they are not compensated for which they have worked in a team. The compensation system of the firm focuses on rewarding and providing bonuses to partners and principals, and they get rewards and bonuses based on the credits they earn in origination and execution of the project.

Similarly, they cancalculate the rewards and bonuses as per their earned O/E credits. The culture of the firm is individualistic, but many times a project has to be completed by the assistance of another partner and principal, so they have reservation over the distribution of reward and bonus. Therefore, the firm needs such compensation system that could motivate the individualistic efforts, encourage teamwork, and sustain the company’s strategic position in the market. If the compensation system could not compensate the firm’s top performers,then the company might lose them along with clients.

Current compensation system does not have any strategic fit in organization because the system lacks in connecting all the associates atone page, and on the specified goals and objectives. There are three important components that should be considered while building a compensation program: one;the philosophy should communicate throughout the organization to provide information to the employees how reward model works and how it compensates employees at different levels as per the factorial analysis based on performance, experience, and efforts in the team.

Second factor for the system is implementation and administration of the compensation system whereit should be monitored consistently to ensure that employees are compensated as per the model, and employees should also be kept under constant observation to understand what they think about the model, and that they get timely promotions and other rewards.

The third factor is communication throughout the organization. It is a very important factor that should be considered when building an effective compensation model because the compensation model without communication creates confusions, misunderstanding, and transparency within the employees. So, a compensation model should be well defined to all employees, and employees should be given process by which they could communicate their concerns, and they should also understand the whole system and processes.

Marshal and Gordon Designing an effective compensation system Harvard Case Solution & Analysis

Recommendation

It is recommended for Marshal and Gordon that it should adopt fixed salaries to new recruitments and junior employees, and they should be compensated with experience. Similarly, compensation should increase with the length of time they stay with the company and offer bonuses to top performers.It would encourage them to stay with the company and have increased compensation. This would motivate individualism and encourage team work with full potential. On the other hand, the compensation would emphasize to work hard individually and bonuses would motivate for teamwork. So, on both sides concerns of the employees would be addressed, and it would not discourage them to walkout of the company. It is an effective compensation system with three levels: fixed salaries, compensation and bonuses with respect to hard work................

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