CASE STUDY:

CHANGING THE PAY

LEVEL AT EIGHT

CROSSINGS

Eight

Crossings?

Eight Crossings is a privately-held

company, active in business products

and services industry performs

especially offsite support services for

physicians, attorneys, and self-

publishing authors.

CEO : Patrick Maher

Founded : 2001

Location : Sacramento, California

Service : Provide quality outsourced support

for administrative communications, such as managing

dictation/transcription, typing, editing, printing, phone

answering, and content research.

Employees : 85 transcribers

Annual income: $20,000 to $70,000

Issues of the Company

CHANGING THE PAY LEVEL ?

The Pay:

• 5% above the average of the

industry.

• Pay was according to the number of

lines per text, hours worked and how

complex the task was.

• Clients’ pressure to Patrick Maher toreduce the fees because of the companycompetition.

• Improvement in Voice RecognitionSoftware.

• Maher cannot cut the costs in overheadand materials because it is already inminimum costs.

• Nearly all it is costs are related to labor.

But….

Cutting fees meant cutting

payroll or stop earning a

profit.

Maher…

However,

continue

paying at the

same rate

Considered

about

Boilerplate Text

Decided to cut

pay by 5%

Communicate

with the

employees in

22 locations

Choose to

communicate

electronically

by e-mail

Employees

expressed

understanding

Questions and Discussion

How did the change in pay level at

Eight Crossings affect the ability to

attract and retain a high-quality

workforce?

The change in pay level did not

affect the ability of the company to

retain the high-quality because…

The employees understood

the changes after CEO

Maher explained the

situation of why the pay

level had to be cut.

It still has some

advantages for

employees that would

be better rather than

move to other company.

Maher deciding to

stay committed to

his workforce in

the U.S.

He is still paying

the market rate

to the

employees.

However, the ability to attract

the high-quality workforce is

still to be determined.

Do you think the company’s

pay structure was better suited

to its objectives before or after

the reduction in the pay level?

Why?

The company’s pay structure was better

suited to its objectives before reduction

in the pay level because of…

Bonus gives more motivation

for the employees by pay

varied based the complexity of

the job to get more work done

by receiving on average 5%

bonus per assignment.

According to Reinforcement Theory,

it uses rewards and punishments

that follow a person’s behaviour as a

way to shape that individual’s future

behaviour.

How would you evaluate the company’s

method of communicating the change in

pay level? What improvements to that

process can you suggest?

From the way company method of

communicating, using email is correct

and effective because workers are

located in different places 22 locations.

But actually, it is not an advance way.

Suggestion

Companywide conference call or

conference meeting over the web.

A video of the CEO announcement

about the changing pay level.

Conclusion

Maher

ensures…

He already

found the

best way to

communicate

with all of the

employees

No

workers

were laid

off

No

workers

should

leave the

firm They did not

need to use

outsourcing

to solve this

problem.

The

company

makes

profit

Thank you