Megalith, Inc. - Hay Associates (A) Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Megalith, Inc. - Hay Associates (A) Harvard Case Studies

Introduction

Megalith Inc. is the manufacturer of various office equipment that includes printing tools, publishing and supplying but because of the World war-2 the firm diversified its business into the publications but the company could not compete with its competitors (IBM ad Xerox). Hay Associates is the company that is founded in the Philadelphia in 1978, that had two main areas on which they focused which include providing the HR solutions to the various businesses and measurement of Job contents. The company providing services on various issues that include, corporate culture, strategic compensation, outpacing and the measurements of the performance planning. Hay Associates having a database that holds the industrial data and market about salary practices by which the company checks the external equity while the company mainly recognized the issues and their corporate culture of the organizations and then the company develops various designs to solve the issues.

The Megalith had issues where various new talent hired employees leave the organization because of the bureaucratic salary system, while the company failed for the development of a better compensation system. The company cannot recognize to access the employee’s talent and their performance. However, the Hay Associates received the case of Megalith and they provide them certain solutions to solve the issues after that Megalith will able to recognized or understand the role of jobs and accountability level based on the employee’s performances the solution is related to the measurement of the external equity and the internal equity, which is based on the job contents. (Seeger, 1976)

Problem Statement

The retention of talented employees is the main problem for the company, where the company cannot able to keep their employees due to which talent employees leave the organization because of the administrative salary system. The company cannot able to access the employees’ performance and fail to develop the better compensation system.

Situational Analysis

Alternatives:

Following the current situation the company has the following methods that could help the company to retain its employees and maintain the performance of the company in the long run. These options are discussed as below.

Raising ceilings

The first way that could help the company to retain its employees is by raising ceiling i.e. salary brackets of the employees. As already mentioned in the case the employees of the company are leaving the company because they feel that the compensation process of the company is poor and they are not being paid fairly. Moreover the competitors of the company are seeking this situation as an advantage to attract and recruit the competitive employees of the company. By increasing the ceilings of the employees the company could create a sense of satisfaction in their employees and the employees would not seek for different opportunities to earn more.

Pros

If the company increase the salary bracket of the company then the main issue right now with the company could be resolved. With increased ceiling the company could conveniently retain its employees. With the increase in their ceilings and salary brackets the employees would be satisfied from the company and their dedication towards their work would also improve. Because of their sense of satisfaction with their salaries they would not look for other opportunities to grow. The competitors of the company would also get fail in reaching for the competitive employees from the company and could not play with their weak points.

Cons

Although for the employee retention, it is important for the company to resolve the key issue with the employees i.e. raise in their ceilings. But according to Frank C. Nicodemus, the vice president of human resource at Megalith, the company’s compensation system is fair and competitive as compared to the industrial data, along with that it is revised annually. So according to Frank, attempting to retain the employees by bringing raise in their ceilings is not an option. Hence by keeping up with this option means going against Frank that holds respective authority in the company.

Introduce Employee Stock Option (ESO)

Another way to not lose any other competitive employee of the company is by introducing the Employee stock option in the company. ESO is a process in which rights are granted to the employees of the company to buy the company’s stock at already set price. With this method the company would hold equity share in the company.

Pros

The main issue that the employees currently have with the company is regarding money. They are not satisfied with the money they are getting out of their jobs. With the introduction of ESO the employees of the company will have the right to buy equity in the company at very effective rates and it will also provide the significant position to the employees in the company. Employees’ loyalty towards the company would increase with their increased importance in the company. They would show their maximum dedication towards the company.

Cons:

Although ESO is a great method for the company to retain its employees and increase loyalty among them, but the process is not cost effective to the company. The additional expenses of the company will get increased. So the company will have to increase its expenditures in order to keep up with this option.

Providing performance based competitive incentives

The company could resolve the issues with the employees by bringing incentives and performance based rewards. By implementing this strategy the employees would be able to get incentives like medical allowances, annual leaves, travel allowance, etc. etc. Along with this, the company should also introduce performance based rewards such as travel tickets, company tours, bonuses etc.

Pros

The main advantage related to this method is to increase the level of satisfaction among the employees. If the employees of the company get rewarded based on their performance then they will show their full dedication their jobs and will try their maximum to perform at their best level. This will enable the company to improve it overall revenues and retain the employees. Employees would be retained because if they are satisfied and loyal to the company the competitors would not be able to reach them and in case they offer the employees more money then, because of the increased level of satisfaction for the company they will likely to not consider their offerings.

Cons

In order to introduce rewards and incentives in the company, the company would need to increase its operational costs and expenditures and that would reduce the company’s earnings to some extent. The money that the company could use in research and other matters for product development, would be invested in employee retention.....

Megalith, Inc. – Hay Associates (A) Harvard Case Studies

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