Marshall & Gordon: Designing an Effective Compensation System (A) Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Problem statement

The main problem for the company is to find out the effective compensation plan that motivates as well as keeps the PR consultants of the Marshall and Gordon. In addition to this, the company also needsto be aligned all the professionals and attract new consultants in order to successfully implement thenewstrategy of the company.

Industry overview

The Public Relations industry is highly competitive as there are numerous firms that provide a variety of services to the clients. The major services that the firms in the industry deliver to their clients includes the managing, protecting and improving the brand reputation and products. However, the Public Relations industry has developed as a long term program in order to form the reputation of the various clients. Some of these clients include media, investors, analysts, customers, politicians and regularity bodies.

The Public Relations firms had added services to their offerings that help them in the development of the more strategic services in order to satisfy the needs of the clients. Furthermore, by the year 2011, full range of servicesis provided by the PR firms to their clients. These services include media and investor relations, lobbying, crisis management, event management and fundraising.

The top 50 Public Relations firms contributed around 35% of industry revenue while in 2010 the annual revenue of the industry was $ 9 billion. The service offerings of the PR firms are highly competitive in the industry that also make possible for the small agencies to successfully steal the business from the large PR agencies. The industry was highly categorized by the consultants as the competition for the talent in the industry increases. Also, showedthe lack of their loyalty with their employees as they move among the competing firms while taking clients with them. The firms in the industry are consolidated through the merger and acquisition in order to develop global competences and expertise to serve worldwide clients. There are various firms in the industry that have diversify them into other extensions of PR services that include litigation support and reputation management consulting.

Marshall & Gordon Introduction

Marshall &Gordon was a small public relations firm that was founded in 1904 by James Marshall and Gordon. It was the major player worldwide in the Public Relations industry by the year 1999.Moreover, the firm had an officeall around the world such as Asia, United State, Europe and SouthAfrica. By the year 2010 the firm expands their client reach across other diverse sectors such as Airlines, financial services, healthcare, consumer goods, education, oil and mining.

Additionally, the firm had a network of 48 offices all around the world that located on six continents with approximately 1,500 employees by the year 2010. Marshall and Gordon also had 21 areas of practice, various specialty services, 256 partners, 105 principals and 88 senior associates. Also, the support staff of the firm includes research associates and executive assistants.

However, the associates of the firm are expected to take the position of the senior associate within two to three years. On the other side, senior associates are expected to promote into the position of principal within five to six years. Whereas, the principals are expected to promote into the position of partner within three to six years. Thesepromotions are based on the revenue bill of the consultant anddevelopment of the new relationships with the clients.

More than one third of the top performing partners and principals had started working with the firm as an intern or entry level associates. The projects that managed by the principals were normally smaller and for less prestigious clients. Every project is handled by an individual partner or principal with the help of the research team and senior associated depending on the size and nature of the project.

Current compensation plan

The current compensation plan of the Marshall and Gordon makes the collaboration difficult. As it rewards the Entrepreneurism but having no mitigating factors in order to encourage people in the firm to share the pie. In current compensation plan, the benefits for the partners and principals includes the combination of both salary and an annual bonus.

The amount of salaries for the principals of the firm ranged from $100,000 to $150,000 whereas the amount of salaries for the partners of the firm ranged from $180,000 to $250,000.The performance based bonus for the workforce was measured by using to part formula. The credits earned by the consultants for both businesses originated (O) and executed (E).

In addition to this, the project that is managed or sold by two partners they negotiate in order to decide how to divide originated (O) and executed (E) credits between them. On the other side, the consultants who managed the individual projects, there bonus would be based on the total of O and E Credits of each consultant. In the situation, when production..................

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General Director Kelly Brown struggles with the design of a new compensation system to promote cooperation and cross-sales necessary to support the new strategy of the firm. Marshall Gordon International, a global public relations (PR) firm, has recently expanded its service offering to include the executive position, which requires much more collaboration, a higher level of interaction with customers and more strategically-minded consultants than their traditional work PR. The Director General is the pressure to find a compensation system that helps retain and motivate valued PR firms, consultants, attract new talent and get all professionals aligned for a new strategy. "Hide
by Heidi K. Gardner, Kerry Herman Source: HBS Premier Case Collection 15 pages. Publication Date: 05 May 2011. Prod. #: 411038-PDF-ENG