Establishing a pay structure

1. 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

2. Introduction
Background 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

3. 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

4. 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

5. 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

6. Question
1
How did the change in pay level at
Eight Crossings affect the ability to
attract and retain a high-quality
workforce?

7. 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.

8. 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?

9. Question
2
The 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”

10. 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?

11. 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.

12. 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.

13. Conclusion
 The pay structure before the reduction was very
effective
 However, the amendments was important

14. Maher
ensured…
Best
communication
method 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

15. 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 .