Module 7- Draft

Based on the case study analyses, discussions, and textbook readings up to this point in the course, you should have gathered enough information to make recommendations and revisions to the current benefits and compensation package to address concerns and gaps previously identified from the Emerging Pharmaceuticals Case Study and the 2018 Medtronic Benefits data. You will not be answering the questions in the case study; however, you will address the prompts in Section II of the Final Project Guidelines and Rubric document and the Milestone Three Guidelines and Rubric document.
Overview: For the final project, you will analyze Emerging Pharmaceuticals in order to evaluate and revise the company’s total rewards system. You will utilize information presented in the case study to compare and contrast the organization’s total reward system with external benchmarking data. You will also analyze the data for gaps and make revisions to the existing compensation and benefits package. The information you are provided with will be based on a specific aspect of a benefits and compensation package (retirement benefits, medical benefits, and so on). You must also create a presentation to stakeholders that explains the proposed changes, your rationale behind the changes, and the implications of the changes for the organization. For Milestone Three, you will prepare a draft of your recommendations and revisions (Section II). The submission will have the major heading “Revisions.”
Prompt: Begin by reviewing your first two milestone submissions. Then, based on the concerns and gaps you previously identified and the feedback from your instructor, make recommendations and revisions to the current total rewards package described in the case study and provided supplements.
Draft your revisions so that they thoroughly cover each of the critical elements listed in Parts A–C below. Specifically, the following critical elements must be addressed: II. Revisions: In this part of the assessment, you will make recommendations and revisions to the current benefits and compensation package to address any concerns and gaps previously identified.
A. Make recommendations to the current total rewards package that address concerns related to your previous analysis of the quantitative and qualitative data. In other words, what changes would you make to the current benefits and compensation package in order to address any concerns you previously identified?
B. Identify potential financial, procedural, and legal constraints regarding the revised total rewards package.
C. Explain the financial cost of proposed changes to both direct and indirect compensation. Be sure to address fully funded organizational changes, partially funded changes (and by what percentage), and fully employee-funded benefits. Identify the increase or decrease for total employee costs.
Rubric Guidelines for Submission: This milestone should be submitted as a 2- to 3-page Microsoft Word document with double spacing, 12-point Times New Roman font, and one-inch margins. Sources should be cited according to APA style
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ATTACHED FILE(S)
Emerging Pharmaceuticals and Medtronic Comparison

1

Introduction
You have recently been hired as a Total Rewards Director for Emerging Pharmaceuticals, a
growing pharmaceuticals manufacturer on the West Coast of the United States with 25
global locations. Emerging Pharmaceuticals was started by a group of private investors in
2011 and has skyrocketed in revenue over the last 3 years. Projected revenue for Emerging
Pharmaceuticals is expected to top $5 Billion by the end of the calendar year.
Your job is new to the organization, created because the organization has increasingly been
losing talent to Medtronic, one of Emerging Pharmaceuticals’ main competitors. Turnover
of new hires with less than 2 years of employment at Emerging Pharmaceuticals is 25%. The
vice president of human resources at Emerging Pharmaceutical feels it’s important to
compare the health, wealth and work/life offerings of Emerging Pharmaceuticals with
Medtronic and is expecting you to develop a Total Rewards strategy for the coming year
that will retain critical employees, respond to the needs of multiple generations in the
workforce, and keep costs under control.

Emerging Pharmaceuticals and Medtronic Comparison

2

Emerging Pharmaceuticals Workforce
The workforce at Emerging Pharmaceuticals has tripled since its inception in 2012, growing to a total of 15,000 employees working in jobs such
as scientists, research analysts, IT techs, sales, administrative support, call centers, patient advocates, clinical trial specialists, patent attorneys,
and middle- and senior-level management. The employee demographics with employment types are shown below.

Global Full-Time Employees
Age and Status
Demographics
Total in Current
Calendar Year
Total of all employees 15,000
30 and under 2,640
31-50 10,018
51 and above 2,012
Total Females 7,042
Locations
U.S.10,100
Asia- Pacific865
Canada895
U.K.2003
Latin America807

Global Part-Time Employees
Age and Status
Demographics
Total in Current
Calendar Year
Total part-time employees 330
30 and under 105
31-50 125
51 and above 100
Total Females 247
Locations
U.S 220
Asia- Pacific 23
Canada 27
U.K. 45
Latin America 15

Employment Type
Employment Type by PositionTotal in Current Calendar Year
Administrative Support Staff 6,600
Professional 4,375
Clinical/Scientists/Research Analysts 2,450
Middle Managers 1,200
Senior Management375

Emerging Pharmaceuticals and Medtronic Comparison

3

Employee Value Proposition
The employee value proposition (EVP) at Emerging Pharmaceuticals in the early stages was focused on challenging work, competitive pay and
opportunities to advance. In response to the increasing exodus of employees to Medtronic, the vice president of human resources hired an
external consultant to conduct employee focus groups. She is concerned with the results, especially in employees aged 31-50 with at least 2
children, which make up 37% of the workforce. The vice president learned of employee concerns about selections and costs in the health plans;
disenchantment with the 401(k) plan, which has no employee match; and questions about career paths, advancement opportunities, and work
hours. The high level of organizational growth has put pressure on all positions in the organization.
Here are the aggregated results of the focus groups’ responses:
TOPIC CATEGORIES FROM EMPLOYEE RESPONSES
% RESPONDED
AS IMPORTANT
Work remotely 10%
Tuition reimbursement 8%
Healthy lifestyle reward/Voluntary benefit options 6%
Financial Wealth Options/Pension Match5%
Paid Time Off/ Family Time Options 8%
Market “right” pay for position 10%
Opportunities to use skills/abilities 3%
Job-specific and company-sponsored general training 8%
Professional development opportunities 9%
Workplace safety 2%
Community engagement/Corporate social responsibility 5%
Recognition of job performance/variable pay options 8%
Employee respect and diversity in the work environment6%
Trust between employees and Sr. Management 5%
Teamwork within department 7%

The vice president read comments such as:
Emerging Pharmaceuticals and Medtronic Comparison

4

 I never get home before dinner and we have a new baby at home. I leave for work at 6 a.m., fight highway traffic to be in by 8, and
extra work always ends up on my desk towards the end of the day. I can’t seem to get out of the office until 7 p.m. and home by 8:30.
By the time I get home my son is already asleep. I wish the company had a way for me to work from home.
 I don’t see how I can move up in the organization when management positions require a degree, and the tuition reimbursement for
school is so low. Thirty-five hundred a year doesn’t go very far. Just the textbooks can cost $1,000.
 There are some real safety hazards in my lab; OSHA would have a field day.
 While I understand that the organization had to implement a “working spouse” surcharge for my health insurance, my husband and I
are really into a healthy lifestyle. We don’t smoke, we exercise and eat right and there’s no incentive for us – my husband’s health
plan is not as good and we are concerned about coverage because we’re trying to save for our first home. But now I have to pay
another $50.00 per month to cover him in our plans. How come there are no rewards for people like us who really work to take care of
ourselves?
 The company claims they care about providing good rewards for us, but there are no voluntary benefit options, the pension plan has
no match, and I don’t know how I can save enough to retire. Are the profits just going to the “people at the top” and leaving the rest
of us behind?
 The paid time off schedule only goes up to 18 days after 10 years of employment, with no sick time. I guess we’re supposed to leave
after 10 years. Is this a way to get rid of older employees?
 I always go the “extra mile” at work and my manager doesn’t seem to notice.
 I like my job, but a couple of people I worked with left recently for better pay at another company.

After reading all of the employee feedback, you and the vice president decide to compare Emerging Pharmaceuticals Health, Wealth and Work/
Life Total Rewards structure with information from Medtronic and make some revisions to the total rewards strategy for Emerging
Pharmaceuticals.

Health Options for Emerging Pharmaceuticals
Emerging Pharmaceuticals offers two health plan options to employees: the Value Preferred Provider Plan (Value PPO) and the Choice Plus
Preferred Provider Plan (Choice+ PPO). The Value PPO has lower bi-weekly costs but higher out-of-pocket costs at the time of service. The Value
PPO uses a narrow network of providers with higher penalties for out of network providers. The Choice+ PPO has higher bi-weekly costs, but
lower out-of-pocket costs. The Choice+ PPO offers a broader network of providers for participant choice.
Emerging Pharmaceuticals and Medtronic Comparison

5

Emerging Pharmaceuticals promotes the use of generic drugs and has established a $5.00 co-pay for generic prescriptions, and the organization
is considering a partnership with Care Compare, a benefits selection tool that helps employees search for and compare the cost of procedures at
various providers or facilities. If an employee uses Care Compare, Emerging Pharmaceuticals offers a financial incentive for selecting the lowest-
cost provider.

Medical (bi-weekly costs)
Value Preferred Provider Plan (lower premiums but high out-
of-pocket costs)
Choice+ Preferred Provider Plan (higher bi-weekly
premiums but lower out-of-pocket costs)
Employee Only -$57.50Employee Only – $86
Employee Plus One- $157.50 Employee Plus One-$141.50
Employee plus two or more- $257.50 Employee plus two or more – $500

Health Plan Designs – Value Preferred and Choice+ Plans
Plan Design Elements Value PPO – 80 % Co-
insurance- In-Network
Value PPO – 80 % Co-
insurance- Out of Network
Choice+ PPO- 100% Co-
Insurance- In Network
Choice+ PPO- 100% Co-
Insurance- Out of Network
Office Visit Copay $25 $75 $10 $20
Urgent Care $35 $85 $20 $45
Emergency Room $250 $250 $100 $100
Inpatient $500 $1,250 $250 $250
Out-of-Pocket
Maximum
Employee $1,000 $3,000 $750 $1,250
Employee plus one $2,000 $5,000 $1,500 $2,500
Employee plus two $3,000 $7,000 $2,250 $3,750
Note: All plans are subject to a working spouse surcharge for spouses of employees who have the option of coverage with their own employer.
The surcharge is an additional $25.00 per paycheck.
Note: There are no wellness incentives for Emerging Pharmaceutical’s medical plans.

Emerging Pharmaceuticals and Medtronic Comparison

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Dental (bi-weekly costs)
Comprehensive Plan- Preferred Provider Basic Plan- Network Only
Employee Only -$12.50Employee Only – $7.50
Employee Plus One- $18.00 Employee Plus One-$14.50
Employee plus two or more- $40.00 Employee plus two or more – $25.00

Dental Plan Designs – Basic and Premium Plan
Plan Design Elements Basic Plan Premium Plan
Diagnostic/Preventive Care $100 deductible per person, all other work
covered by the plan
$150 deductible per person, all other work
covered by the plan.
Basic Restorative Procedures 75% coinsurance 50% coinsurance
Major Restorative Procedures No coverage 50% coinsurance
Orthodontia No Coverage 50% coinsurance, lifetime max to $1,500
Calendar Year Maximum $800 per person $2,000 per person

Vision (bi-weekly costs)
One Plan Design for All Employees
Employee only – $6.67
Employee Plus One – $11.00
Employee Plus Two – $13.65
Plan Design Elements Plan Co-Pays
Vision Exam$20 copay
Prescription Glasses
(instead of contact lenses)
$30 copay. Prescription glasses
(frames and lenses) covered 1x each
calendar year to max of $140
Contact Lenses (instead of
prescription glasses)
$165 allowance for contact lenses
1x each calendar year

Emerging Pharmaceuticals Insurance Enrollment Summary – U.S. Location
Medical Plan and Level of
Coverage
Full Time Part Time

Total
Employees
Value Preferred Provider Plan
Employee only 285 7 292
Employee plus one 400 10 410
Emerging Pharmaceuticals and Medtronic Comparison

7

Employee plus two or more 2,500 34 2534
Choice Plus
Employee only 315 6 321
Employee plus one 500 10 510
Employee plus two or more 2,000 65 2065

MEDTRONIC 2018 Health Plans Side by Side Comparison
CHP with HSA PPO Plan
Company-Provided Account Contribution HSA Contribution N/A

$500/ Employee only
$750/ Employee + spouse OR
Employee + children
$1250/family

Deductible $1,400/ Employee only $500 Employee only
$2,800/ Employee + spouse OR $1,000/family
Employee + children
$3,600/family

Out-of-Pocket Maximum (includes deductible) $3,500/ Employee only $3,500/ Employee only
$7,000/Employee + spouse OR $7,000/family
Employee + children
$9,000/family

Primary Care Provider Visit 20% co-insurance, after deductible $20 copay
Emerging Pharmaceuticals and Medtronic Comparison

8

Specialist Visit 20% co-insurance, after deductible $40 copay
Co-insurance 20% 20%
Preventive Care 0% 0%
100% covered by plan 100% covered by plan

Emergency Room 20% co-insurance, after deductible $150 copay
Online Care/Virtual Visit 100% covered by Plan, after deductible 100% covered by Plan, you pay nothing
Medtronic Mounds View Clinic 100% covered by Plan, after deductible 100% covered by Plan, you pay nothing

Salary Comparison
Job Title Emerging Pharmaceuticals Pay RangeMedtronic Pay Range
Average at domestic locations Average at domestic locations

Scientists Average $93,500Range $82,000 to $100,000Average $103,900Range $92,000 to $112,000
Research Analysts Average $76,000Range $63,000 to $95,000Average $86,547Range $71,000 to $125,000
Clinical Specialist Average $69,000Range $63,000 to $90,000Average $78,000Range $70,000 to $128,000
IT Developers Average $90,000Range $85,000 to $120,000Average $95,370Range $89,000 to $132,000
Non- Clinical Manager Average $54,000Range $48,000 to $68,000 Average $61,750Range $55,000 to $74,000
Clinical Manager Average $100,000Range $75,000 to $110,000Average $105,000Range $75,000 to $120,000

Emerging Pharmaceuticals and Medtronic Comparison

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Wealth Benefits at Emerging Pharmaceuticals
The 401(k) plan has only been in effect for 3 years. The first 2 years of operations, Emerging Pharmaceuticals had no 401(k) in place, and when
the organization was ready to start a plan, contributions were not retro to the earlier years of operations, even though the organization had
some positive revenue results. The vice president of human resources read some comments from employees about the absence of retro
funding, but has not thought about the impact of the employee feedback to this point.

The WEALTH PLAN at Emerging Pharmaceuticals has two primary elements: a core contribution, and employee savings. Emerging
Pharmaceuticals makes a core contribution to the 401(k) at the end of each calendar year. The core contribution is 3% of eligible pay for each
eligible employee. The definition of eligible pay includes annual salary and anything considered to be regular wages. Pay not eligible for a core
contribution is pay earned because of a performance bonus, lump sum for unused PTO, or workers’ compensation payments. Emerging
Pharmaceuticals makes the core contribution whether you are saving as an employee or not. Employees are not eligible for the pension plan
until after completing 1,000 hours of service at Emerging Pharmaceuticals.
Employees can save up to the IRS limits each year and should consider options to save as much as possible. Contributions are made on a pre-tax
basis and there is a catch-up contribution of an additional $6,000 for employees age 50 and older.

Work-Life Benefits at Emerging Pharmaceuticals
The work-life benefits at Emerging Pharmaceuticals include paid time off, paid holidays, tuition assistance, and limited remote opportunities.
The major holidays are in addition to paid time off and include New Year’s Day, Memorial Day, July 4th, Labor Day, Thanksgiving, the day after
Thanksgiving, and Christmas Day. Paid time off is front-loaded according to years of service and is a use-it-or-lose-it benefit. Paid time off is also
used for illness. There is no separate illness bank of time. The paid time off schedule is developed off of years of service and, because Emerging
Pharmaceuticals is a young company, the table of time only shows 10 years. There are no provisions for time-off banks beyond 10 years. If an
employee has paid time remaining in their bank of time after December 15th of any year, the time will be lost. Paid time off banks are reset on or
around January 1st of each year. There is no carryover provision and no provision to “buy out” any paid time off.
The schedule for Paid Time Off is as follows:
Continuous Years of Service PTO in Days PTO in Hours Monthly Accrual in Hours
3 years or less 10 80 6.15
After 3 years 12 96 7.38
After 6 years 15 120 9.23
Emerging Pharmaceuticals and Medtronic Comparison

10

At 10 years and every year
thereafter
18 144 11.07

NOTE: As the Total Rewards Manager, you should think about how a short term list of time off affects retention of employees.

Remote Work Options
Remote work options at Emerging Pharmaceuticals are only available to scientists or analysts who develop data analytics for drug/patient
outcomes. The remote work option requires daily huddles by Skype for Business and attendance at unit meetings at least once a week. Emerging
Pharmaceuticals will provide the appropriate computer equipment and connections. Employees are required to be online by 8:00 a.m. each day
and may be required to work on the weekends as requested. There is no reimbursement for home-based Wi-Fi, which is vital to work remotely
from home.

Tuition Reimbursement
The tuition reimbursement program is available to eligible employees. Employees must have completed at least 1 year of service and will be
reimbursed for education that is considered either an “upskill” related to the employee’s current position, or coursework as part of an
undergrad or graduate degree (doctoral-level education is not included) at an accredited U.S. college or university. The yearly benefit is 100% up
to $2,000 for an undergraduate degree and up to $3,500 for a graduate degree.

Medtronic Benefits Information
For use in OL 620 comparison with the supplied case study data
Retrieved from
http://benefits.medtronic.com/SitePages/ChannelContentR2.aspx?ChnIDval=3&GrpIDval=16&IDval=21

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