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Case 4 - Problems in the Pay System.docx

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University of Miami
MGT 302
Cynthia Cordes

Vy Vo MGT302 Section D Problems in the Pay System 1. Based on last year’s $23.5 million revenue of CCUA, the company belongs to the category of companies that earn revenue of less than $200 million. Hence, in comparison of the $37,500 salary for Junior Analyst and Programmer, CCUA’s computer analysts I are paid $6,000 below average. However, their pay for Data Processor II position closely matches the $25,000 average salary for Data Processor in Exhibit 10.1.3. Nevertheless, if compared to the overall average weighted salary, CCUA’s pay practices for both positions are below average. Thus, overall, CCUA pays a lot less than the current average salary in the market and hence, not at all competitive. This would make sense if the company employs the Lag pay policy and provides more intangible benefits to their employees instead but according to Exhibit 10.1.2, CCUA neither provides enough benefits nor has meaningful tasks for employees. Hence, in conclusion, CCUA’s pay practices are not as competitive as other organizations. 2. The actions needed to be taken depends on which pay policy the company wants to employ: Lead, Match or Lag. However, according to the information provided in the case, we can assume that CCUA is a small-sized company and therefore, I would recommend them to follow the Lead pay policy and increase the pay of their employees because it requires a lot more resources and effort to follow the Lag strategy (the company may have to rebuild its facilities and redesign their tasks) though it may be more beneficial in the long run, especially if CCUA plans to expand. Hence, CCUA should either increase the budget for the employees’ salary or reduce the number of data processors and computer analysts while raising the salary of the rest of the employees to keep the same budget. 3. In order to anticipate and avoid future turnover problems, CCUA should make exit interviews part of their practices in order to find out the problems in time and fix them before the turnover rate gets
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