While this course is focused on direct compensation, use this discussion post to discuss alternative indirect compensation methods of rewarding employees through non-monetary means and methods such as spot recognition programs, gift certificates, training, etc.

Use the SSS case study to discuss effective and noneffective means of indirect compensation.

You can also talk about any benefits that have been meaningful or motivating for you personally.

What methods do you think are the most effective means to reward and reinforce employee behaviors?

Case study below-

Why a case study? All of us come from different backgrounds and have different work experiences ranging from none to not for profit, government/public sector, private, publicly traded organization, etc. We will use the case study to have a common framework from which to analyze and integrate materials into a practical situation review. We will use the same organization throughout the course to design and evaluate a comprehensive compensation program for union and non union employees, part time and full time employees, executives, sales and specialized staff.

Superior Software Systems (SSS) is a publicly traded (on the stock exchange) software company competing with software giants such as SAP, Oracle, Lawson, and Great Plains. SSS provides Enterprise Resource Planning (ERP) software to small organizations, including not for profit companies. It differentiates itself in the marketplace with superior service and a great product offering many of the same functionality that the software giants provide without the big price tags.

The SSS corporate headquarters is located in Minnetonka, MN. It has been in existence since 1975 and currently employs approximately 550 full time and 50 part time employees in Minnesota, Atlanta and Denver. The Minnetonka headquarters contains software development and sales. The Atlanta and Denver locations are eastern and western regional offices respectively.

Most employees work in the corporate locations and about 20 of the corporate employees work remotely out of their homes. Approximately 15 employees representing the software distribution center are union members.

The median employee age is 34, approximately 65% employees are male and the majority are married. Most employees have benefits provided through SSS. The executive employees receive stock options with the amount based on position within the organization.

The company has been going through difficult challenges and the stock price continues to drop. Sales are approximately $300M annually but the sales revenue has been going down from earlier years and there is pressure on pricing of software. Several key executives have resigned in the past year and it's been difficult to replace them. The company is seeking to gain several major governmental contracts.

The organization uses it's own software for the HRMS system. This results in significant data availability on employee demographics and skillsets, governmental reporting, and tracking of employee productivity.

The organization currently provides superior benefits to employees and prides itself on being an employer of choice. Benefit costs are spiraling upward. Turnover is low but the human resource costs based on competitive information are high to the marketplace. The sales team appears to be overrewarded for flat and reduced sales.

Executives may be underpaid to the market given the talent needed and the difficulty of attracting and retaining key executives. The company incentive plan pays a bonus each year despite dropping sales and loss of market share. The executives receive perquisites in the form of a car, stock options, health club membership, financial planning and a supplemental retirement plan that keeps them even (percentage wise) with 401k contributions on a non-qualified basis to address Section 415 limits and discrimination tests.

SSS is faced with potential downsizing if sales do not increase, except in the western region which is expanding operations. Lastly, several key players are needed to stay on board and complete the next product release.

The President, Joe Johnson, decided that it was critical to get the HRM house in order before any decisions are made. Last year he hired you, as a leading compensation expert working with Orion HR Group, LLC to assist the organization in a comprehensive review of the SSS market position, pay philosophy, pay mix, sales compensation plans, incentive program, executive compensation and stock option plans.

The President believes that employees are a critical resource for the company and promotes the philosophy that all managers are human resource managers. However, he also fears that layoffs may be inevitable.

Superior Software Systems Mission Statement

The mission of Superior Software Systems (SSS) is to be a profitable, growing company dedicated to providing the highest quality software to our customers, providing an positive work environment for employees and providing an exceptional rate of return for our shareholders.

SSS Strategic Goals for this year

1. Increase sales and profitability by 15%, despite the economic downturn.
2. Develop one new software product and release the next version of the major product.
3. Align compensation with business strategy. Pay competitive wages while reducing costs.
4. Develop and implement strategic and competitive Human Resource Management programs.

Making Assumptions About SSS

As with any case study, this is just a summary of basic information about SSS and may not contain as much detail as you would like to have for your management decision-making. You may make any assumptions necessary to make HRM decisions and document and include those assumptions in your discussion postings.