case study 8-1

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Apr 3, 2024

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1 Case Study 8-1 8-1 Case Study: Is it time to hire a compensation expert? Laura Bates Southern New Hampshire University 2-27-2021

2 Case Study 8-1 EasySpa's continuous expansion in the spa industry has been successful, growing the company to 20 locations and almost 400 employees. With the mission to be the top-rated spa in the region, they have excelled in offering reasonably-cost spa services. Even though the business is successful, there are some areas of improvement which could help in the overall function and support policies of the business. Currently, EasySpa does not have job descriptions or a formal pay structure which could end up hurting the business and have not updated their benefits package/offering since the business was established. It would be beneficial to hire a Compensation Specialist to join the HR team. “As organizations grow, compensation management becomes increasingly necessary; in organizations with 250 to 500 employees, it is common for at least one person within the HR function to manage compensation as part of their job description” (Stewart, 2020). EasySpa is almost at 400 employees, without coverage in this area. The current HR team is spread thin to add on additional responsibilities. “When there are a lot of employees, compensation management is a full-time job that includes setting a compensation budget, forming pay structures, researching salary market data, ensuring compliance with state and federal law and regulations, updating job descriptions and classifications, and training managers on pay communications” (Stewart, 2020). The above duties list the current needs of EasySpa. Although job descriptions are not required by law, they do protect the company and the workers. The lack of job descriptions has the potential to lead to legal infractions including wrongful termination and unfair labor practice lawsuits. “A job description is an internal document that clearly states the essential job requirements, job duties, and responsibilities, and skills required to perform a specific role” (BetterTeam, n/d). Without this document, EasySpa would not be able to hold workers responsible for not performing duties

3 Case Study 8-1 because officially they were not told which tasks/duties were their responsibilities. Job descriptions would also assist the recruiter in hiring proper talent for open positions, assist in evaluations, provides motivation to employees, and is a physical resource for knowledge of what requirements are needed to promote an employee. Providing employees with a consistent pay structure is time-consuming, it involves fixing the current pay structure, so that all employees are aligned, and constant observation of current market pay. “The structure needs to be evaluated on an annual basis to determine whether pay grades or individual jobs need to be changed, and how much due to the cost of labor increases” (Pros and Cons of a Salary Structure, 2019). This type of structure does benefit the company and the employees. Adopting a pay structure and aligning jobs will allow the company and employees to know that they are receiving fair pay, and the requirements/pay of the next position up from theirs, which can also be motivating. As EasySpa continues to grow, “new hires already have an assigned grade and therefore, are not being brought in at a salary that is inconsistent with others in the same or similar jobs” (Pros and Cons of a Salary Structure, 2019). EasySpa not adopting this practice can overpay for some positions and not paying fair wages to all employees. EasySpa has had various changes in the 10 years that it has been opened. With that being said the benefits package has not been reexamined since then…possibly 385 employees and 19 locations ago. “By upgrading your employee benefits package, you can show your team that you care about them and you are willing to offer them rewards from time to time” (Insights, 2020). In addition to showing employees that the company cares about them, examining benefits usage can provide data of whether benefits are being used or what is being offered is not what employees’ want; which means the company needs to put benefit money to better use. When changing

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4 Case Study 8-1 benefits packages it’s important to survey the staff, to know what benefits they are interested in having. Overall, EasySpa’s determination to flood the spa market is happening. The need to support this growing business is evident; a compensation specialist can fill a void in the HR structure and iron out areas that need to be reevaluated. As more EasySpa’s open in the region, the less attention other areas of the business projects are going to receive. Once a compensation specialist can create job descriptions, job structure, pay scales, upgrade the benefits package; EasySpa will continue to be able to expand and retain their current and future staffing. These efforts will also help in motivating staff; motivated staff provides EasySpa’s clients with the best experience.

5 Case Study 8-1 References: BetterTeam. Job Description Examples (Updated Weekly - Free to Download) . Betterteam. https://www.betterteam.com/job-descriptions Insights. (2020, August 1). 5 Reasons to Upgrade Your Current Employee Benefits Package . InsightsSuccess. https://www.insightssuccess.com/5-reasons-to-upgrade-your-current- employee-benefits-package Stewart, A. (2020, February 25). 5 Signs You May Need a Compensation Manager . PayScale. https://www.payscale.com/compensation-today/2020/02/5-signs-you-may-need-a- dedicated-compensation-manager. Pros and Cons of a Salary Structure . Compensation Works Corporation. (2019, February 7). https://compensationworks.com/pros-and-cons-of-a-salary-structure/.

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