Still Your Turn – Mapping Compensation Strategies , p. 63.- Do the first two que

Question

Still Your Turn – Mapping Compensation Strategies, p. 63.- Do the first two questions in the gray box on page 63. Please submit a map modeled after the one on p. 55. The map can be done on Excel or some other software. A hand drawn map also is acceptable. If you are employed, I would prefer you map your employer's compensation strategy.

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Take any organization that you know – currently employer, business school, the place you interned, a friend’s employer. Look at Exhibit 2.8, “Contrasting Maps of Microsoft and SAS.” Map your organization’s compensation strategy then compare it to that of Microsoft and SAS.

Summarize the key points of your company’s strategy

What are the key differences compared to the strategies of Microsoft and SAS?

Explanation / Answer

Compensation strategy of Infosys (My Company):

The current compensation structure of Infosys has reduced the proportion of cash component in the overall compensation & has introduced higher stock incentives that can be vested over a four year period. This revised compensation strategy or proposal was placed before the shareholders & their recommendations have been approved by 67% of the shareholders. This type of strategy was chosen by the company to align the leadership interests with that of the shareholders.

The company has adopted a change in strategy in order to race with other companies like TCS & Wipro who have been following similar strategies which can help the company to take a major turnaround & also deliver industry level growth rates.

Compensation strategy of Microsoft:

In Microsoft also, stock based compensation is considered to be a key component of the rewards program as it provides ownership in the success of the company. Around 85% of the employees are eligible for annual stock award & 90% of them are eligible for cash bonus. These companies assign incentives based on group performance. Best performers seem to include both stock & non stock plans that can integrate short term incentives as a part of long term compensation strategies.

Microsoft also adopted a system of integrating rewards to performance. This includes where the employees receive ratings from their managers based on their achievements of goals. Based on these ratings, the employees are provided incentives.

SAS’ strategy mail emphasizes on cash compensation options, generous package of work life balance programs & provides limited emphasis on bonuses & no stock awards.

When we compare all the three companies i.e. Infosys, Microsoft & SAS, we find that strategies of Infosys & Microsoft are slightly similar where they emphasize on stock based compensation whereas SAS majorly focus on cash based compensations, work life balance programs etc. hence this seems to have a unique strategy compared to Infosys & Microsoft.

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