Compensation Restructuring

JVA Corporation

To: Katelyn Van Michelson, CEO

From: Human Resource Director

Date: June 5, 2013

Subject: Compensation Restructuring

Dear Ms. Michelson,

During the last fiscal year, JVA Corporation had a devastating net loss of $53 billion and suggestions have been made that we close a couple of the international factories to help stabilize the corporation and remain in business. As the Director of HR, I feel that these closures would have a negative impact on the employees and JVA Corp. The proposed closures would move the production facilities further away from the existing customer base, which would force employees of those facilities to either commute farther (additional costs) or refuse the farther commute and quit. In order to avoid this drastic measure, I propose a restructuring of the existing compensation packages as well as implementing a new performance management system. This proposed solution can help identify where more cost effective solutions exist without causing undue hardship on the employees.

Performance Management System

In order to implement the correct performance management system, an internal review of all the jobs within the organization will be conducted. The review will rank the jobs in order of importance to the organization. The job analysis will define the responsibilities of that particular job which will then be used as a tool to evaluate against employee performance. This job analysis may result in job loss as some of the duties may prove to overlap, which creates inefficiencies and loss of production.

The evaluation process will be conducted using the Critical Incident method as opposed to the Checklist method. The critical incident method focuses more on the individual behaviors that may be causing the inefficiencies within the employee's performance. Corrective action will be noted in the employee file and a re-evaluation will be conducted at a pre-determined time as to track the progress of the employee. The progress of the employee will be the basis for retention or pay increases.

The job description will be used to appraise the employees utilizing the proper standards. The employees will be provided with an understanding of the standards and after performing the job, the standards will be the basis of evaluation as to how well the employees met those standards. Proper training will be conducted to better aid in the overall employee productivity and through continuing education find ways to improve performance of the employee.

Compensation

All of the JVA Corporation employees have become use to the perks that JVA offers, such as the fitness rooms,