Case Study Analysis: Compensation, Training, and Migrant Workers

This case study analyzes two scenarios. The first explores compensation strategies for start-ups, arguing against a variable pay component exceeding the fixed component, citing employee retention, conflict avoidance, and motivation as key reasons. It proposes a compensation system linking employee contributions to rewards. The second case examines training needs for migrant workers in Beijing, identifying priorities and categorizing needs related to job satisfaction, urban survival, and skill development. It then develops a practical and feasible training program for Workers' College, considering content, schedules, budgetary constraints, and funding strategies, including recognition of prior learning and detailed program schedules. The analysis emphasizes the importance of training for urban survival and enhanced earning potential for migrant workers.

CASE STUDY

Table of Contents
CASE STUDY 1..............................................................................................................................3
QUESTION 1..............................................................................................................................3
QUESTION 2..............................................................................................................................4
CASE STUDY 2..............................................................................................................................5
QUESTION 1..............................................................................................................................5
QUESTION 2..............................................................................................................................5

CASE STUDY 1
QUESTION 1
“Start-ups should not have an employee compensation
system in which the variable pay component is larger than the fixed component.”
Compensation refers to the rewards which is paid to employees in exchange of all the services
they are providing to their employer. There are a number of different forms of compensation
which include wages, salary, commission, incentives and so on. All the benefits weather
monetary or non-monetary are included in compensation.
It is necessary that the compensation strategy for which is developed by a start-up have been
generated to provide reasonable competition to other companies in the industry. Being a start-up
it may be difficult to compete with large companies but structure of salary should be formed in a
way to attract employees. The salary is divided into fixed pay as well as variable pay. There are
companies who have different ratio of both of these compensations. It is advised for start-ups to
have more fixed pay as compared to variable. Reasons for this are mentioned below with
justification:
Employee Retention- The company which is a start-up have uncertain incomes. The
profits for the company are not guaranteed. If the company is wishing to make variable pay
higher than fixed pay and company incurs losses then there are chances that the company might
not be able to pay sufficient amount to its employees. This may lead to demotivation of
employees in the organisation. It will directly affect the productivity and efforts employees are
putting towards the work. Demotivated employees can also leave the work which will result in
high employee turnover. Being a starts-up organisation cannot afford to loose its goodwill and
reputation in market as well. This will also make it difficult for the new start ups to recruit
human resources.
Conflicts- Variable pay for employees being higher than the fixed pay leaves huge gaps
between income of different employees in the organisation. When the pay is mostly based on
efforts employee are putting towards work huge difference is seen in the pay. Due to this
conflicts and sense of jealousy may arise in employees. It will effect the performance of
employees as well as have a negative effect on the culture and working environment. Being a

start-up companies cannot afford wasting efforts on resolving conflicts between employees. Also
due to conflicts the productivity of organisation might get affected leading to losses.
Demotivated employees: When variable pay is offered by companies it is often assumed
by employees or potential employees that they might earn more. But the end results only depends
on their personal as well as organisations overall performance. When expectations of employees
are not met it may lead to demotivation. It is necessary that start-ups have fix pay more than the
variable pay so that even after an average performance employees have some benefits to look up
to which will keep them motivated and also help them to improve their performance in coming
time.
QUESTION 2
Design a compensation system for a start-up in such a way that its employees can see
the link between their contributions to the start-up's success and the rewards they receive
in return.
There are a number of different decisions which will be included while making a
compensation plan for start-up. The compensation plan will be made in a way to make sure that
employees are also given part reward based on success of organisation. Below mentioned are
steps to be followed while creating compensation plan.
 The first criteria is to identify who will be participating in the compensation plan. It is
also necessary to divide the employees based on their levels and compensation plan will
be different for all employees at different level and at different departments.
 After this a need to understand total target compensation is important. This is the
maximum amount one can earn if they are meeting the requirements of their job or the
targets which are assigned to them. This will act as a benchmark for payment.
 It is required by start-up to decide on compensation mix after this. This consists of ratio
of base salary to the incentives which will be received based on performance. In the
following organisation a 60/40 ratio of basic and incentive salary is included. The
incentives will be dependent on target for sales which is set for each employee.
If employee is getting $8000 basic pay and the target is 3500 units. If the employee meets this
requirement their salary will be:

Total Pay= 8000*(8000*40%)= 8000+3200= $11200
 It is necessary to then measure performance of employees. It is based on either revenue,
profit or strategic objective. In the above step it is described that performance will be
measured based upon revenues.
 The next step includes deciding upon an incentive formula for the employees. For the
following plan if target is achieved the commission will be provided at the rate of 3% and
once the target is overachieved the commission rate increases to 5%.
 At the end the compensation plan for sales executive is drafted it becomes easy to apply
and test it upon the employees in the organisation. This testing will help the start-up to
understand the implications and technicalities they need to focus upon while they are
executing this plan.
Compensation plan for sales executive at XYZ
Basic pay- 8000
Incentives- 40%*8000(if target achieved) 3600
Commission 3% below target-5% target over achieved on selling price 3000
Total $14600
( *Note-Assume target to be 3500 units and actual sales is 4000 units , SP= 15$/ unit.)
In following way compensation plan can be derived for a start-up. The plan has 40% of
variable pay and 60% of basic pay. Higher level of basic pay will help in retaining employees in
the organisation. On the other hand, 40% of variable pay will help company in attracting new
enthusiastic employees towards them. This shows a good combination of variable and fixed pay
to attract and retain employees in the organisation. This will help start-up's to provide a part of
their profits and earning to employees which will help them to generate a feeling of
belongingness for business and employees as well.
CASE STUDY 2
QUESTION 1
Identify, categorize, and prioritize the training needs facing the migrant workers in
Beijing who have left their home in the countryside in search of a better life.

Training migrant workers in Beijing need to be prioritized so that the students who are
residing in “worker's college”. With the help of the case study it can be understood that the
workers are looking for ways to earn. They go through a number of jobs in their urban life but
cannot stay in a job for a longer period of time. The need of job for them is must in order to fulfil
their basic requirements. They are trained in a number of field but the requirement is to
understand the interests of various migrant workers and then train them in specific field.
It is seen that workers who are admitted in college are not well educated. They are taught
about their rights and laws which they can use for their benefits while working in a job. There
are a number of such students who do not have any place to go to. They cannot even return to
villages due to no land back there and staying in cities and urban areas is not affordable for them.
Another need for training of migrant employees is due to the suicide case in Foxconn
Technology Group. 14 workers committed suicide due to confusion and lack of focus in their
life. They were young and their delicate minds were not nurtured in correct way which caused
them to take this step. In order to provide more chance to such workers generation of a proper
training plan is necessary.
The workers cannot go back to villages because they cannot find jobs there. It becomes
difficult to live there without any support and source of income. On the other hand a number of
workers have mentioned that even after opportunities of jobs in cities they cannot stay in a same
job for longer. This was a result of dissatisfaction of workers. It is necessary that employees feel
related to the job they are performing. Their skill sets must also compliment the job only then
they can successfully perform a job.
Training is also necessary for them because migrant workers are often offered jobs with
long working hours. Due to this they have to work all night. Even after working for such long
hours the amount which is paid to them for their jobs are very low. In addition to this the respect
and value which a worker wants at their workplace is also not provided to them many a times.
All these factors identify, prioritise and categorise the need of training to the migrant workers in
Beijing so that they can earn for their living and have respectable jobs.

QUESTION 2
Develop a practical, feasible, and comprehensive set of training programs to help
Workers’ College equip the migrant workers in Beijing with the necessary skills for
urban survival with due considerations for training contents and schedules, budgetary
constraints, and funding strategy. Be specific and justify your answers
A) Recognition of Prior Learning- It is process and program under which
identification, accessing, documenting or credits for exemptions without dealing with any
formal education programme, which makes it easy for individual to access employment
gateways with skills recognized. This RPL programme which will assist all migrant workers to
use enhance and increase the abilities & capabilities at wider scale. It aims to appreciate prior
learning irrespective of the medium of achieving it.
Budget- A budget is an estimation of revenue and expenses over a specified future
period of time and is usually compiled and re-evaluated on a periodic basis. Developing of this
training programme will cost around 3470 USD/ year. So, it is essential to use capital and
resources in most efficient manner. Moreover, training is to be done at wider scale so that
migrant workers are able to get higher salaries in urban cities.
Funding strategy- Initiating a programme is not easy and requires huge capital. So,
funds will be raised through government bodies, banks and other financial institutions. It is
crucial to use effective funding strategy so that funds are raised with correct measures and
suitable options. The rationale for funding strategy is that by using this strategy is i= will be
easier to generates funds through various sources.
Contents and schedules- The training programmes will give a brief knowledge about
advanced IT skills, understanding if business sector & market, global competencies etc. The
schedule is set according to the different time duration so that all migrants are able to take
participate in this programme. The contents are prepared with new & modern theories so that
workers are able to deal with new and changing market sector.
Morning time- 9:30 to 11:30, Monday and Tuesday
Afternoon time- 12:00 to 3:00 PM Wednesday & Thursday
Evening time- 4:00 to 6:00 PM Friday
Night time- 7:00 to 9:00 PM Saturday and Sunday

The provided content will be useful for migrant workers as it helps them in developing
their both practical as well as theoretical knowledge which they can use it in their professional
career. Trainers are well qualified which delivers a depth advanced knowledge of all the crucial
subjects and specific field. The main rationale for developing this programme is that migrant
workers will be able to increase their pay scale in urban areas with their knowledge which they
will gain form during training.
Therefore, after analysing the above matter, it is seen that while developing training
programmes it will be easier to increase skills and knowledge of the individual or workers who
required them at priority level. Also, new ideas will be also generated during this course which
will give opportunity to both workers & trainers to enhance their skills at larger level.