Compensation Package Proposal

Introduction (Short&Strong)

A company like Lehi Games offers a lot to prospective employees simply through its’

contemporary (flat) organizational structure, but to compete in the software and games industry

we must also provide as dynamic a benefits package as possible. For this proposal we will focus

on motivational aspects of our compensation and benefits package utilizing Herzberg’s two

factor theory (Herzberg et al, 1959) and Vroom’s Expectancy theory (1964). We hope to provide
a realistic compensation package that will drive motivation and employees to come to and stay

with the company.

Background of organization (short)

Lehi Games currently employs 76 employees and is considered medium sized software

firm with a flat organizational structure focusing on games for consoles and apps. The

organization was started in 2012, and has had mild success so far, in part because of the

difficulty of the market

Industry Compensation/Benefits Packages. Valve, Twitch, Ubisoft

Compensation:

We will look at software companies of comparable sizes given data provided by

comparably.com. Comparably.com (2021) surveys employees and other information to provide a

comparison of companies in the same industry. The salary compensation packages for each

company are estimated below. We provide the average, median, high and low points of salaries

to build a basic understanding of the roles that might applied for different types of positions

within an organization.

However, it should be noted in a flat structure like Valve, they do not have a customer

service position. Gamasutra.com interviewed Gabe Newell in 2017 where the CEO says

customer will contact him or specific people within the company directly, because “There’s

nothing between you and the customer,” (Gamasutra.com, 2017). The number provided by

comparably.com is simply wrong, but it is noted that all numbers on their page are only an

estimate. Twitch, on the other hand does have customer service representatives, and according to

glassdoor.com (2021) and their average salary is around 52-58 thousand, but that’s before
bonuses. So, recalling that these are estimates made to assist us in comparison, we can move

forward.

From these lists and our company compensation philosophy we should therefore find the

average salary within these companies and try to stay close to that number, essentially taking a

middle market strategy at least to begin with, and focusing on an internally equitable structure in

the future. In Figure 1, the last line provides that number as the average salary at $122,343, and

the median salary at about $122,002. By providing a close number across all fields we would be

able to focus the teams more on the aspects of our company rather than inequality among

workers.

• Figure 1: Average salaries for Valve, Twitch, and Ubisoft (Comparably.com, 2021).
Company Average Median High Salary position Estimated. Estimated. CS
Salary Salary High Salary Rep Salary
Valve $114,810 $116,521 Legal Dept $265,585 $44,021
Twitch $124,380 $127,830 CEO $203,947 $65,784
Ubisoft $127,839 $121,655 Director Of PR $205,000 $45,151
Total $122,343 $122,002 N/A $224,844 $51,652
Averages

Required Benefits:

As the required benefits are not considered motivating factors under Herzberg’s two-

factor theory, it is important to provide them as a hygiene factor and conduct business in a lawful

manner. According to Youssef (2020), the list of required benefits includes: Workers’

compensation, Social Security, Unemployment Insurance, Health Care Coverage, FMLA,

Military-related absence protection, and jury service protection. But while health insurance at a

federal level is no longer mandatory as of Jan 1, 2019, (Tax Cuts and Job Act, 2017), individual

states may still require it or have laws concerning it. As we are located in the State of Utah, we
are not required by law to have health insurance (blr.com, 2021), but are required to provide

specific qualities when it is offered. We will add Healthcare as an optional insurance for our

employees and act within Utah’s laws as part of that process.

Optional Benefits:

The hygiene versus motivation of these voluntary benefits become less clear depending

on the employees’ expectations, so we require an additional theory to assist our ability to judge

motivation and engagement. Vroom’s expectancy theory here is important because although the

benefits (like soft drinks and snacks being continuously available to employees free of charge),

are extraordinary at a traditional corporate setting, they have or are becoming the norm for the

industry we are working in. For example, providing 3 catered meals every day is not provided by

Ubisoft, and there are those employees who react on glassdoor.com (2021) as if these things are

normal and that Ubisoft is somehow lacking, treating it as a hygiene factor. We build these

options in the hope of providing motivational factors, but must be ready for all this to become

normal, and be prepared to manage expectations as well.

The other benefits for this industry according to our analysis are probably similar across

most industries in that if they are not mentioned in any way, it is either because the company

does not believe it will assist in the hiring of new employees, like long-term disability insurance,

or because the company does not offer it, like childcare. The other benefits we found utilizing

various sources including indeed.com, glassdoor.com, payscale.com, and the company websites.

We have posted the various information in Figure 2.

Our 3 comparative companies each offered some form of volunteer benefits in these

cases: health insurance, life insurance, dental, vision, profit sharing, stock options, 401 (k) and
matching, flexible hours, remote work opportunities, holidays off, PTO, parental leave, gym

access, snacks, soft-drinks, a casual dress code, and a supportive environment for diversity.

Though some of these might be considered dynamic, like drinks and snacks, this list should be

utilized as those necessary to be part of our industry and act as hygiene factors if not provided as

explained above.

The benefits not mentioned by some but are likely to have are as follows: Long-term

disability, accidental death & dismemberment insurance, pensions, transportation assistance

(generally public transportation), access to free alcoholic drinks at least occasionally, and a

glaring hole not mentioned is options for personal growth. Once again, we would probably

expect these options to be hygiene related to some degree.

Only one benefit appeared as universally ignored by these companies, childcare. We are

unsure about the reason behind not providing it, but childcare is considered expensive and the

options to work flexible hours and remotely might provide enough of an opportunity for single-

parent families to look after their children without need for the company to provide further

assistance. Childcare facilities, or some kind of subsidy partnership might provide us with an

option to motivate employees with younger children, but as we need to maintain our hygiene

factors as well it would seem practical to study both the need and expense in the future rather

than immediately embracing the program.

• Figure 2 - Optional Benefits

Benefit Valve Twitch Ubisoft
Healthcare Yes Yes Yes
Life Insurance Yes Yes Presumed
Dental Yes Yes Yes
Vision Yes Yes Yes
Long-Term disability Yes Never mentioned Never mentioned
 Accidental death & Yes Never mentioned Never mentioned
dismemberment
Profit Sharing Yes Yes Yes
Stock Options Yes Yes Yes
401(k) + matching Yes Yes Yes
Pension Yes Never mentioned Yes
Flex Hours Yes Yes Some
Remote Work Yes Yes Some
Holidays off Yes Yes Yes
PTO Yes Unlimited Yes, on tenure scale
Parental Leave Yes Yes Yes
Childcare Never mentioned Never mentioned Never mentioned
Transportation Never mentioned Commuter assistance Mass Transit
Gym Yes Yes Subsidized
Adoption Assistance Yes Never mentioned Never mentioned
Meals Yes Catered B/L/D No
Soft Drinks Yes Yes Yes
Snacks Yes Yes Yes
Alcoholic Drinks Never mentioned Yes Once/quarter
Dress-Code Casual Casual Casual
Pet Friendly Never mentioned Yes Never mentioned
Relocate Assistance Never mentioned Yes Never mentioned
Swag Giveaway Never mentioned Never mentioned Yes
Games Never mentioned Never mentioned Yes
Social Clubs Never mentioned Never mentioned Yes
Discounts Never mentioned Never mentioned Yes
Personal Growth Never mentioned Internship Never mentioned
Diversity Support Yes Yes Yes

Engagement
Gallup’s (2013) State of the American Workplace Report provides us with a macro-level

relative engagement of workers in different industries and types of works that was summarized

for us in Lipman’s (2013) article. Engagement of the workforce can be closely matched with

theories in motivation in that as engagement increases the company’s productivity and likelihood

of profitability goes up as well. Lipman (2013) quotes the Gallup report “Organizations with an

average of 9.3 engaged employees for every actively disengaged employee in 2010-2011

experienced 147% higher earnings per share (EPS) compared with their competition in 2011-
2012.” So, it is necessary to build as much engaging, motiviating structure into our compensation

and benefits package as possible.

The Gallup (2013) report begins with an emphasis on the importance of hiring a manager

by their CEO Jim Clifton. This is an important piece of work because the ability to have those

who encourage and motivate their employees is a key factor for engaging company employees,

and education happens poorly through word of mouth between employees. But in a flat

structured organization we can provide as much information as we like, but there will always be

those who do not take the time to seek out information. So having a training staff to assisting

onboarding and development of team members will be key, and can be staffed by experts in their

fields from the staff of teams we already have as well as HR specific trainers for jobs we need

assistance with.

Education is a key element in the likelihood of engagement, in that those who were more

educated tended to be less engaged due, it was reasoned, to the company’s inability to meet

expectations of their college graduates. This is a key aspect from the alternative benefits above

because as we mentioned earlier personal growth was not as much a factor for the 3 comparative

companies and the only one to mention it was Twitch, with an internship opportunity. While

college graduates may not be looking immediately for additional opportunities for personal

growth, the ability to manage expectations will be key focus for our organization because we

want as many highly educated personnel as possible and helping people grow has both its own

personal rewards and allows the individual to feel valued by the organization. We need should

focus on both internal training and development as always but also provide more structured

education for those who want to accelerate their growth through partnership with a university on
aspects that would directly assist the organization in its goals, like HR, software, and

communications.

Other forms of engagement Lipman summarized have less effect on our company’s

ability to deal with. For example women have higher engagement than men, but we need to focus

on diversity in a flat structured company and we need to be able to avoid illegal hiring practices.

Likewise, those who are given the ability to work remotely tend to have higher engagement, but

that is already part of our culture and while it needs additional study, it is something we already

have.

Proposal for Benefits

Herzberg (1959) and Vroom’s (1964) theories provide us with essential ways to attract

and keep our employees motivated, or engaged. Herzberg warns us about how our hygiene

factors will perhaps bring employees in, but are not able to successfully motivate our employees.

Vroom tells us that when we do use the motivation factors from Herzberg’s two factor theory

that we need to be able manage expectations to have the highest impact.

As a flat structured organization, we will necessarily have a generally flat compensation

focus as well. The necessity to provide as much equity as possible will be key in providing for

our employees with 3 determination factors that provide opportunities for growth. First will be

the type of position they hold. Those on the same team performing the same functions should be

paid equitably. Second, will be tenure with the organization, those with the longest time with the

company should be paid more than those who most recently joined and those with tenure should

be reviewed to keep up with the market share of their positions’ value to the company, we are

not likely to find a lawyer who is willing to take the same salary as a team member. Finally, we
should provide options for growth personally, and pay those with a greater number of

competencies more than those with only a single competency to provide a greater variety and

diversity from which to draw on team perspectives and opportunity to innovate.

As to benefits, we need to provide both the hygiene and motivational factors in a way that

encourages engagement. Required benefits are aptly named and would remain part of our

package. Other benefits would highlight the ability for continued personal growth through a

strong internal training program and partnership with a university. We would probably go middle

of the road with options like PTO, health, vision, dental, life, AD&D, and 401 (k). But we would

highlight with training about pension contribution, university access, and compensation-based

increases to motivate additional trust and management of expectation for our employees. The

training of one another on a topic can be important for the specialization of team members, and

the ability to train others will be a key factor we look for in team composition.

Conclusion

The ability to keep up with the competition is part of business, but when we find an

opportunity to grow more than them, we must seize on it first and provide the best possible

options to build our brand, attract the best employees and build our capacity in the market. There

were only two glaring holes that we discovered at this time, childcare, which will have a certain

amount of impact, and personal growth which can have a significantly higher impact for a

company with a portion of competency based income structure. That personal growth option will

assist in both drawing in and keeping our workforce. Through education of our employees we

also provide them with the knowledge that will assist them in being successful in their roles and

future planning. We will provide a market value compensation and benefits package, but the

focus on this element of personal growth will help keep us engaged and highly productive.