Changing the Pay

Level at Eight

Crossing

Establishing a Pay

Structure

Archana Nand S11117109

Ashna Prasad S11098189

Fareen Bi S11126645

Priya Darshani S11120050

Shayal Davi S11119756

IntroductionBackground of the case study:

Darren

Dahl

He discussed about 4 entrepreneurs- who

made bold changes in the way they think

about compensation- where the situation

of cost cutting encountered by Meher was

also discussed

Business Background

Launched- 2001

Core function- allows doctors, lawyers, hospitals, authors to

outsource its administrative functions by providing transcription

services.

Location – Sacramento, California

Employees- 85 transcribers

Annual income: $20,000 to $70,000

Transcription:

It is converting of voice recorded reports as

dictated by professionals into text format

The Case Study

Eight Crossing allows its employees to work from home- work-life balance

Improvement in Voice Recognition Software- “automation could take over

some of the processes that have been handled by transcribers”

Maher’s client began pressuring him to reduce his fees

Nearly all its costs are related to labor. Cutting fees, meant cutting payroll.

The Pay: - 5% above the average of the industry

- this pay strategy acted as an advantage in recruiting and keeping

best transcribers

- pay was according to the number of lines per text, hours worked

and how complex the task was

Maher…

Boilerplate text-automatically generated by

the transcribers’

software

Cut pay by 5%

However, continue paying

at the same rate

How to communicate….22 locations….

Communicate electronically,

e-mail

Fortunately, employees expressed

understanding

Question

1

How did the change in pay level at

Eight Crossings affect the ability to

attract and retain a high-quality

workforce?

Question

1

There was no effect on the ability to retain

the high-quality work force.

The employees expressed understanding

and they did not wish to move to any other

company as the other companies would pay

the same rate as Eight Crossings are paying

them, so the pay level cut did not affect the

companies’ ability to retain their workforce.

Maher could have outsourced his work but

decided to bring the pay to the market rate.

The ability to attract the high-quality work

force is still to be determined.

Only time will tell if the company will

continue to attract the potential high-quality

workers.

Question

2

Do you think the company’s pay

structure was better suited to its

objectives before or after the

reduction in the pay level? Why?

Question

2The company’s pay structure was better suited to

its objectives before the pay cut because the pay

varied on the complexity of the job but also giving

more motivation for the employee to get more work

done because of receiving on average a 5% bonus

per assignment.

Being that Maher was still seeing profit this is an

effective way of attracting the best-qualified workers

and retaining them.

The pay was varied from the complexity and length

of each assignment, the more skilled was the

employee, and took on tougher task, received higher

pay. “A very effective pay structure”

Question

3

How would you evaluate the

company’s method of

communicating the change in pay

level? What improvements to that

process can you suggest?

Question

3 The company’s method of communicating

the change of pay as effective.

Given that the reaction of the employees

was positive instead of being angry after

receiving news of a pay cut.

The workers are located in 22 locations

and many of them work from home so most

the communication between the staff was

through email and telephone this was an

effective way to communicate the change.

Question 3 Suggestion

Delivering such big news like a pay cut is a very

sensitive piece of information.

A companywide conference call or conference

meeting over the web would have been a better

alternative. Email is not as personal as hearing a

voice or seeing the person delivering the news. It

shows more interest and gives the perception that

one cares more when making it more personal.

A video tape of Maher to his employees is also a

good mean of communicating of such a information.

Conclusion

The pay structure before the reduction was very

effective

However, the amendments was important

Maher ensured…

Best communicationmethod to be

used to deliver the news

No workers laid off

No workers should leave the firm by paying at

market rate

No outsourcing to India for low wage labor

No software investment; it has its own

limits

Customer satisfaction

Make profit

Bibliography

Dahl, D., 2010. Special financial report: Employee

compensation, New York City: Inc. Magazine.

Noe, R. A., Hollenbeck, J. R., Gerhart, B. & Wright, P. M., 2016.

Fundamental of Human Resource Management. 6th ed. New

York: McGraw Hill .