Case - Climb the Legal Ladder
Questions-
1. Think about the research evidence discussed in the book. Would you expect the Sullivan & Cromwell associates to feel their pay structure is fair? What comparisons would they likely make? What work behaviors would you expect Sullivan & Cromwell's pay structure to motivate? Explain.
2. What about associates who joined the firm four years ago? If the salaries for new associates increased by $20,000, what would you recommend for other levels in the structure? Explain.
3. Partners make around 10 times the highest-paid associates. A Wall Street Journal writer laments that law firms form "giant pyramids . . . (in which) associates at the bottom funnel money to partners at the top." What is missing from the writer's analysis? Hint: Speculate about the likely differences in content and value of the work performed by partners compared to associates. Any parallels to Merrill Lynch's FAs and SVPIs?
4. A few years ago, Sullivan & Cromwell announced that year-end bonuses will be cut in half, with a maximum of $17,500 for early-career associates and $32,500 for eighth-year associates. However, last year, bonuses ranged from $2,500 to $20,000 and for the current year, bonuses are estimated to be $1,000 to 55,000. Should Sullivan & Cromwell be concerned about difficulties in recruiting or retention?
5. How does the Sullivan & Cromwell approach to compensation differ from that of Dewey & LeBoeuf? What are the advantages and disadvantages of each approach?
Review Questions
1. What are the pros and cons of having employees involved in compensation decisions? What forms can employee involvement take?
2. Why does the process used in the design of the internal pay structure matter? Distinguish between the processes used to design and administer a person-based and a job-based approach.
3. If you were managing employee compensation, how would you recommend that your company evaluate the usefulness of its job evaluation or person-based plans?
4. Based on the research on job evaluation, what are the sources of possible gender bias in skill-/competency-based plans?
5. How can a manager ensure that job evaluation or skill-/competency-based plans support a customer-centered strategy?