Assume that you are employed as compensation and benefits manager in the human resource department of a large health care organization. Recently the organization experienced significant turnover in upper management. The long-time chief executive officer retired and was succeeded by a CEO from outside. The new CEO quickly replaced four other high-level managers, including the vice president for human resources, with people of his own choosing. After six months on the job, the new CEO secured board approval to explore the feasibility of an executive incentive compensation system and presented the board with a suggested design for such a system. As the compensation and benefits manager, your participation and input are requested. You are added to a small committee formed to determine how to go about fulfilling the charge from the board. The first issue the committee has to address is deciding whether to pursue the design of the system internally or engage the services of a human resources consultant specializing in compensation.
1. Prepare arguments for engaging an outside consultant to design the executive incentive compensation system.
2. Prepare arguments against engaging an outside consultant to design the executive incentive compensation system.