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GROUP 7 - HRM Assignment

The document summarizes the compensation package negotiated by Monroe Davies for the position of Director of Business Operations at Whole Health Management. The package includes a base salary of $125,000, an annual bonus of $30,000 based on meeting agreed upon goals, 10,000 stock options priced at $2.7 each, up to $5,000 in relocation assistance, $20,000 for continuing education, and 100% reimbursement of dues and licenses. The rationale provided for each element references Monroe's qualifications and experience, industry standards, and cost of living comparisons to justify the amounts.

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143 views3 pages

GROUP 7 - HRM Assignment

The document summarizes the compensation package negotiated by Monroe Davies for the position of Director of Business Operations at Whole Health Management. The package includes a base salary of $125,000, an annual bonus of $30,000 based on meeting agreed upon goals, 10,000 stock options priced at $2.7 each, up to $5,000 in relocation assistance, $20,000 for continuing education, and 100% reimbursement of dues and licenses. The rationale provided for each element references Monroe's qualifications and experience, industry standards, and cost of living comparisons to justify the amounts.

Uploaded by

Swati
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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HUMAN RESOURCE MANAGEMENT

ASSIGNMENT 2: NAME YOUR PRICE : COMPENSATION NEGOTIATION AT


WHOLE HEALTH MANAGEMENT
A project report submitted to
Dr. Prantika Ray

SUBMITTED BY:
GROUP NO. 7
MANAS VASHISTHA 400
P. VINEETH KUMAR 405
RISHABH AGARWAL 414
SHIVANGI OJHA 416
SWATI 423
UDAY UIKEY 426
Compensation break-up of Monroe Davies for the position of Director, Business Operations:
Compensation Break-up Amount
Compensation $125,000 p.a., paid semi-monthly
Bonus $30,000; based on plan
Stock Option 10,000 Stocks @ $2.7 each based on vesting schedule
Relocation Allowance Upto $5,000 one-time to move to Cleveland; additional
allowance to be determined for any future relocations
Benefits:
Continuing Education Stipend $20,000
Dues & Licenses 100% on actual basis

Rationale:

Compensation
Amount: $125,000
Rationale: Salaries offered at HBS are in the competitive range. We have assigned Monroe’s
compensation according to 75th % base salary figure of health-related service industry
because Monroe is a dedicated candidate and made quite an impression on Jim Hummer and
other senior management team. Apart from being a Harvard scholar, Monroe has passion and
drive, as Jim himself pointed out, and by asking for a higher compensation, he can establish
himself as a calculated risk-taker. Therefore, the higher compensation is justified.

Bonus
Amount: $30,000 based on agreed upon goals
Rationale: The agreed upon goals would ascribe to 3 roles specified-

1. Manage Client Relationship and contracts:


a) Repeat business from existing clients of 3 contracts given to Munroe.
b) Customer Satisfaction Index > 90%.

2. Grow existing client contracts:


a) Increase revenue from the contract that he is managing by 15% .

3. Develop new client business:


Expand the client base and get 2 more contracts

The bonus is equally divided amongst all the goals as they carry equal weightage.

Stock Option
Amount: 10,000 Stocks @ $2.7
Rationale: As per the company standard equity plan, incoming executives are eligible for
10,000 stock options. Also, it is mentioned that the company might grow 3 folds by the year
end and Monroe would want to invest in the firm’s equity. Further, being in a leadership role
he would like to hold more stakes in the company.
Relocation Allowance
Amount: Up to $ 5,000
Rationale: Expenses incurred by Monroe for relocating from Boston to Cleveland would be
reimbursed by the company up to $5,000. Based on the comparison made on cost of moving[1]
by referencing national standards in 2006, we estimate the relocation expense to be
approximately $5,000. Moreover, Cleveland is cheaper as compared to Boston, hence the
overall cost of living would also be lesser.

Continuing Education Stipend


Amount: $20,000 As Approved
Rationale: Monroe Davies is from HBS Class of 2006 and received the job offer in Feb 2006.
Hence, he has one semester (roughly 4 months) of education remaining. Currently, annual
tuition fees of HBS students for nine academic months in 2021 is approximately $73,440.[2]
Taking into account CPI-indexed inflation rates, we calculate that the inflation rate has risen
from 2006 to 2021 by 38.4 percentage points.[3] Therefore, we estimate that the annual tuition
fees for HBS Class of 2006 was approximately $53,100. Therefore, for the remaining months
of education at 70% sponsorship rate, we estimate that $20,000 (for 4 months) has been
approved.

Dues & Licenses


Amount: 100%
Rationale: Certification and license fees for competition of the course shall be paid directly
by the company. Also, any renewal for certification and license going forward will be done
by the company as these are required for the execution of the work by Mr. Monroe Davies.

REFERENCES

[1] https://www.goborntomove.com/
[2] https://www.hbs.edu/mba/financial-aid/tuition-assistance/Pages/cost-of-attendance.aspx
[3] https://tradingeconomics.com/united-states/consumer-price-index-cpi#:~:text=Consumer
%20Price%20Index%20CPI%20in%20the%20United%20States%20averaged%20117.64,points%20in
%20January%20of%201950

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