So You Want to Lead an Orchestra? 1. Describe the orchestra’s pay structure in terms of levels, differentials and job- or person-based approach. I believe the orchestra has a highly hierarchical pay structure, with many pay levels and large pay differentials between pay levels. It also seems to be more person-based than job-based structure (considering lowest paid Violin II receives less than half of the pay of the highest paid Violin II). 2. Discuss what factors may explain the structure. A combination of factors will explain the given structure.
Standard economic forces, i. e. supply and demand for a specific player will definitely have an effect, as will the importance of the instrument in the orchestra, as well as the amount of work that is performed (comparing for example violin and a horn). 3. How well do equity and tournament models apply? I believe, even though an orchestra, as a team, would benefit from having egalitarian pay structure to ensure perception of fairness (equity theory) the tournament theory would better explain the highly hierarchical pay structure in place at this orchestra.
Why are organizations concerned with compensation? What should a compensation program accomplish? Organizations are concerned with compensation for many reasons, depending on which perspective one looks at the organization. From society’s perspective organization will be concerned with being seen as an organization that cares for its employees, such as having fair compensation packages and providing employees with heath care; which in turns enriches society as a whole.
Organizational stockholders will be concerned with how employees are paid as id directly affects the bottom lines of the company (does employee ownership increase performance and therefore increase the bottom line or does it only dilute stockholder’s wealth). Managers are usually concerned with two aspects of the compensation – one, the expense side and two, as motivational tool.
For employees however, the pay is a major and usually the only source of financial security, and can be seen either as an entitlement or a reward, depending on the mindset of the individual employee. Compensation program objectives are fourfold. These are specified as efficiency (improving performance as well as in terms of controlling labor costs), achieving fairness (recognizing employees’ contributions – performance/experience/training; as well as employee’s needs), reaching ethical standards and compliance with laws and regulations.