Establishing Strategic Pay Plans

Paper details
Develop a response for the question 1 & 2. Then read the case and develop a responses for the 3 questions. Each
question(s) should have 165 words response.
1. What do you think are the key components within a performance management plan? Which component is the most
challenging to implement? Why?
2. Today, many organizations use the S.M.A.R.T. objectives method when establishing personal performance objectives.
Should they continue to use this method or modify to another system? Explain your answer.
Application Case Salary Inequities at AstraZeneca
More than 50 years after passage of the Equal Pay Act, women in America still earn about 80 cents for every dollar
earned by a man. That adds up to a loss for the average female worker of about $380,000 over a lifetime.
Recently, the U.S. Department of Labor?s Office of Federal Contract Compliance Programs (OFCCP) entered into an
agreement with AstraZeneca, a large international pharmaceuticals firm, for the company to pay some of its female sales
associates a total of $250,000. 137 AstraZeneca had a contract valued at over $2 billion with the U.S. Department of
Veterans Affairs to provide drugs to hospitals around the country. That made it subject to Executive Order 11246, which
aims to ensure that employees of U.S. contractors and subcontractors with federal contracts pay their employees fairly
without regard to sex, race, color, religion, and national origin.
After conducting a compliance review, the OFCCP concluded that AstraZeneca violated Executive Order 11246 by failing
to ensure certain women employees were paid fairly. According to the OFCCP lawsuit, an AstraZeneca Business Center
had routinely paid some of its female ?primary care? and ?specialty care? level III pharmaceutical sales specialists an
average of $1,700 less than men with the same positions. Because of the company?s pay secrecy policies, many of the
women didn?t know they were being paid less. In addition to the financial settlement, AstraZeneca and OFCCP will review
records of the firm?s female employees in 14 states. If they find additional statistical evidence of wage discrimination, the
company must remedy it.
1. Although the case with OFCCP is closed, we wonder if there are any less discriminatory explanations possible for why
our women sales reps on average earned less than men. If so, what are they?
2. Our own company now uses a point method to evaluate jobs for pay purposes, and each resulting job class also has a
rate range associated with it. Sales associates are now paid a salary that is not based on incentive pay. List three specific
things we can do to ensure that a similar problem (inequitable pay based on gender) does not arise again, assuming
they continue using the point plan.
3. What sort of compensation plan would you recommend for us, and why?

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