Environment Protection Proposal
Proposal for Improving Company Productivity by Compensating Interns
Prepared for
Carlos Rodriguez
Owner
Twenty First Century Studios
Jacksonville, Florida
March 11, 2011
Table of Contents
Informative Abstract iii
INTRODUCTION
Statement of Problem 1
Background and Review 1
Need 2
Benefits 3
Qualifications 4
Limitations and Contingencies 4
PLAN
Objectives and Methods 5
Time Table 5
Cost and Budget 5
Expected Results 6
Feasibility 7
CONCLUSION
Summary of Key Points 9
Request for Action 9
Works Cited 10
Informative Abstract
Twenty-First Century Studios has the potential to provide college students with incredible hands on experience in the music and video production fields and establish itself as a serious contender in the entertainment industry. What stands in the way of renowned status and positive internship experiences is a lack of dedication, motivation, and positive work ethic among its employees and interns.
To motivate and instill the aforementioned qualities in college level employees, management should compensate interns for the exhibition of traits deemed desirable by the company. The company can compensate in three possible ways: an hourly wage, a lump sum bonus at the end of the internship, or a combination of an hourly wage and lump sum bonus. The amount to be compensated is left to the hiring manager, but it should be justly proportional to the quality of work and effort exuded by the intern.
A compensation system will increase productivity and lead to many benefits for the company. Managers will have more leverage over interns with a compensation system and can expect them to work efficiently. In addition, management will be able to focus on the tasks they should have been doing all along instead of monitoring and cleaning up after interns. With their newfound time, the managers can focus on expanding the clientele and bring in new projects for the company to work on and increase revenue streams. These benefits will promote the company as a real contender in the entertainment industry.
With the executive approval of this proposal, preparations can be started at once to devise a compensation strategy for interns starting in May 2011.
INTRODUCTION
Statement of Problem
Intern managers have a difficult time ensuring professionalism, reliability, and dedication in unpaid internships. With volunteer for college credit systems that most universities have for students who do not land a paid internship position, there is no way to enforce intern cooperation and positive work habits. At Twenty-First Century Studios, most interns offer their services to earn an internship credit through their college or university, but they can easily drop the internship just like they can drop a class. Without compensation, interns cannot be instilled with professionalism as they pass through the company. Management must pay for damages stemming from careless work or even finish the work assigned to interns. If the sole focus is ensuring the intern is doing his or her job correctly, the manager cannot focus on their own tasks or expand the business.
Background and Review
Most college students hope to land an impressive job upon graduation and seek valuable internship opportunities to gain enough experience to qualify for those jobs. When applying to various internships, students first look for ones they believe will suit their needs the best—ones that pertain to their interests, have opportunities for long term employment, or have compensation so they can continue to pay for the remainder of their college education. If students cannot find their ideal internship, they may settle for one that is lackluster in their eyes and not become as dedicated to the company, especially if compensation is not provided for the intern. Companies must work to provide meaningful internship opportunities to college students and not simply hire unpaid help.
As the job market becomes increasingly competitive, individuals that want to land jobs leading to a successful career must have credible experience. Since so many college students and graduates are now seeking valuable experience, the demand for internships has skyrocketed. Increased demand, along with an economic recession, has led some employers to recruit unpaid help in the form of an intern.
No one keeps an accurate count of paid internships versus unpaid internships on a national level, but evidence can be seen of increasing unpaid internships on local job postings. For example, Steven Greenhouse, a writer for the New York Times quoted Lance Choy, director of the Career Development Center at Stanford University, in his article “Unpaid Intern, Legal or Not” on April 2, 2010 stating, “Employers posted 643 unpaid internships on Stanford’s job board this academic year, more than triple the 174 posted two years ago.”
Figure 1
As can be seen in Figure 1, employers are jumping at the chance to hire unpaid interns.
To keep unpaid internships legal in the United States, college students must earn college credit in lieu of receiving pay. The system is plausible in theory but can actually be detrimental for both students and employers.
Need
From the company’s standpoint, Twenty-First Century Studios needs a way to ameliorate the lack of responsibility and work ethic in interns. These two qualities are needed for interns to professionally complete their assigned tasks in a timely manner. Presently, interns are given tasks to complete on an individual basis with no deadlines. Consequently, they take their time completing the monotonous work and draw it out to last longer than it should take. While performing the task, some interns are careless in their execution and cause damage to studio equipment, thereby costing the company money it should not have to spend to replace the equipment. The interns that pass through Twenty-First Century Studios also have issues when it comes to punctuality. Most interns do not show up for work on time or call ahead to let the boss know they will be arriving late. Some even failed to show up for weeks at a time without as much as a phone call to let the intern manager know what was happening.
With the current volunteer for credit system at Twenty-First Century Studios, there is no way to enforce intern cooperation and positive work habits. At your company, most interns offer their services to earn an internship credit through their college or university, but they can easily drop the internship just like they can drop a class. Without compensation, interns cannot be instilled with professionalism as they pass through the company.
From an intern’s perspective, unpaid internships are most often last resort choices. Since most college students normally attend college in the fall and spring semesters, summer is a prime opportunity to work and earn money to cover expenses incurred during the other times of year. Because of this, college students aspiring to intern look for paid internships first and settle for unpaid ones when they can’t find paid internships that suit their desires. Unpaid internships cause unneeded stress on the interns. They know that by taking the unpaid internship they are forgoing any opportunities to earn money with another summertime job and accept the fact they may have to take out student loans to pay for food, housing, books, and tuition since they are not getting paid during the summer. Some unpaid interns who are in desperate need for money to complete their college degree often pick up a second job in addition to a full time unpaid internship. These individuals sacrifice weekends, nights, hours of sleep, and outside social interaction to make ends meet. These extreme measures contribute to unwarranted stress in the interns (Kamenetz, Anya).
Stressors from financial burdens cause anxiety, tension, mood swings, and lack of focus that can carry to the workplace. Interns may become hostile, difficult to work with, and even take longer than expected to complete assigned tasks. Loyalty and dedication to the company suffer horribly as the intern ends up resenting the company for taking his or her valuable time that could be spent earning money to help ends meet in a “menial” part time job. Interns will end up feeling as though the company does not care about them on a person level which will impact their needs for social and psychological fulfillment in a job (Dr. Marie Dasborough).
Furthermore, interns are not being adequately prepared for the real world in an unpaid internship. They are not being shown that routine obligation and fulfilling company needs leads to rewards. They are simply providing their services free of charge to whoever needs work done in the workplace. Without any attainable benefits, drive and motivation are lost and both the intern and the employer suffer (Kamenetz, Anya).
Benefits
Receiving compensation for hours of work adds a sense of professionalism to an intern’s role and gives employers more leverage over employees. For example, if an intern fails to show up to work without providing sufficient reasons or is consistently late, you can dock their paycheck or fire them. Second, providing compensation will inspire dedication to your company. Interns will feel as though they are being treated justly and that their services are being valued. According to David Terpstra:
“Pay matters to most employees and research has shown that the level of employee pay satisfaction is linked to a number of significant organizational outcomes. For example, evidence indicates that pay satisfaction is related to overall job satisfaction, motivation, and performance. Pay satisfaction levels are also strongly related to absenteeism and tardiness.”
Interns will be motivated to perform their best if they are being compensated for their efforts and dedication in the workplace. When they are performing well and being rewarded fairly, job satisfaction will increase and inspire loyalty to the company. With increased loyalty, individuals will aspire to become more professional and someone that can be counted on in the work environment. With higher job satisfaction, tardiness and extreme absenteeism will be greatly reduced and allow for a more productive work environment.
In addition, compensating interns will relieve pressure on management. Interns will be motivated to diligently work and complete projects to continue earning their paycheck or a bonus. The intern manager will no longer be forced to make sure that all interns are efficiently working or finish their projects for them. Instead, they can focus on expanding the business by soliciting new clients and generate larger streams of revenue.
From the intern’s view, compensation will show that the employer cares about the financial well-being of its interns. They will not have to pick up an additional summer job to pay for the remainder of their education and they will be able to focus on excelling in one job. Stressors will not present themselves in the workplace and the intern will stay productive for the complete time at work. Interns will be content with their work environment and strive for possible bonuses based on performance, quality of work, and any other characteristic the company wants to encourage. Motivation and performance will dramatically increase.
Qualifications
I was the only one out of four unpaid interns for Twenty-First Century Studios in the summer of 2010 who showed dedication to my role throughout the entire ten week period. I witnessed how other interns “flaked” (as the company described) and showed no sense of professionalism. In addition, I am studying organizational behavior at the University of Miami which has provided me vast insights on why employees behave the way they do.
Limitations and Contingencies
Although this plan may raise initial financial concerns, the benefits will outweigh the costs as the compensation system will pay for itself. The Feasibility section (page 7) will discuss how such a compensation system is possible at Twenty-First Century Studios.
PLAN
Objectives and Methods
The objective of this plan is to compensate interns for their positive work ethic and dedication. Receiving compensation for hours of work fosters a sense of professionalism to an intern’s role, gives employers more leverage over employees, and causes interns to become motivated to complete work as quickly and accurately as possible. Interns can be compensated for their work in three possible ways:
An hourly wage
A lump sum bonus at the end of the internship
An hourly wage with the possibility of a bonus
Any one or combination of the above means of compensation will bring about a positive change in dedication, reliability, and professionalism to the interns in your business.
Time Table
Figure 2
Cost and Budget
This proposal will outline the cost of the three different compensation methods mentioned above. All methods assume a part time internship for 15 hours a week as are typical at Twenty-First Century Studios.
Method 1: An Hourly Wage
For calculations, the hourly wage is based on the Florida minimum wage of $7.50 per hour. The hourly wage can be set higher than this for the company; it is just used for bare minimum calculation purposes.
If interns are given the Florida minimum wage of $7.50 per hour for 15 hours a week for 10 weeks, the cost only comes out to $1,125.00 for an entire summer’s worth of work for one intern.
Method 2: A lump sum bonus at the end of the internship
Instead of guaranteeing an hourly wage, management may inform the interns on their first day that if their attitudes, work ethic, responsibility, and professionalism are properly displayed and improved upon throughout the internship, they will be awarded a lump sum bonus at the end of their internship. For the compensation to be just and meaningful to the intern, it should be at least $1000 (approximately $100 per week based on a 10 weeks of work). Management will have the right to grant the intern this compensation or give more for harder working employees.
Method 3: An hourly rate with the possibility of a bonus
The third method combines the first two methods for employers who will be looking for interns that go over and beyond what is expected of them. Interns can be guaranteed the minimum wage as well as the opportunity for a lump sum bonus at the end. As with the second method, management can inform the intern that if they meet certain requirements in the workplace, they may receive a bonus at the end of their internship. This method will ensure that the intern is giving as much effort as possible to help the company succeed.
Summary of Cost of Different Methods (Per Intern)
Hourly Rate: $1,125.00+
Lump Sum Bonus: $1,000.00+
Hourly Rate and Bonus: $1,125.00+
Expected Results
Compensation will increase an intern’s professionalism and give employers more leverage to demand the qualities they desire to have in their workplace. Interns will feel the company values their efforts and high level of work and not simply view them as free labor. Compensation will inspire dedication and loyalty to the company from interns.
The hourly wage makes the internship representative of any other job. Most interns will be appreciative of the compensation and would willingly accept it. Others may be up for a greater challenge. In this case the lump sum bonus or scholarship would be more practical. According to Phillip Perry, author of “Pay for Performance”, the third method is the most logical. It keeps the fixed salary low and urges people to go over and beyond what is expected of them to receive rewards. Perry highlights that such a system is especially helpful in small organizations like Twenty-First Century Studios where individuals account for a larger percentage of the company’s labor inputs.
Any of the compensation methods will lead interns to make a greater effort to commit themselves to the company and tasks assigned to them. Managers will enjoy the newfound luxury of being able to focus on their own tasks they should have been doing all along. No longer will managers need to clean up and pay for disasters left by careless or stressed interns or wait around for hours for an intern only to discover that they are not showing up. Productivity will dramatically increase in the company and will allow for the business to take on more clients and special projects. The company will be able to expand and provide greater returns to the managers and owners.
Feasibility
Since Twenty-First Century Studios normally takes one intern in the summer (last year was unusual in that there were 4 interns), the minimum cost of compensation will be $1,000. Despite this new cost, there are many ways to approach it:
Throughout the summer, keep special notes on how interns learn skills, accurately complete tasks, and show professionalism and compare them to previous interns
Use financial benchmarks to compare the output and number of client projects accepted to see how productivity increases
In the three months the compensated intern works for the company, higher efficiency will be evident as extra time for new projects will open up and allow for the opportunity to earn more revenue
By the end of the summer, the intern will have paid their salary and then some.
Another way to view compensating interns is like an investment. The company “gets what it pays for” as the common phrase goes. Paying an intern to be professional and responsible will benefit the company in the long run. In addition to simply helping contribute more revenue to the firm, there will be fewer losses due to accidents. Last summer I witnessed the accidental damage to:
Analog to digital audio converter from excessive force (Cost $1,500 to replace)
A microphone from being stored improperly (Cost $600 to replace)
Connectors that linked components of the audio production equipment from being inserted into the wrong receiving ports (Cost $50 to replace)
CDs and DVDs from being dropped and scratched (Cost $25 to replace)
All of the above damages caused frustration in the workplace and more stress for the managers as they had to find ways to pay for replacement. Figure 3 below presents a graphical representation of past and estimated costs with and without compensated interns. Compensated interns will be much more conscientious about their work which will lead to reduced accidents on the job and unnecessary replacement spending. These reduced accidents by compensating interns will actually save money as the graph illustrates.
Figure 3
In the graph, compensation method number three, an hourly wage with a bonus of $375, has been used. Even with the extra bonus given for over achievement and professionalism in the workplace, the cost to compensate interns is lower than it was to replace equipment damaged by careless, unprofessional interns by $675. While the graph depicts material replacement costs, it does not show opportunity costs and other losses by events such as interns not showing up on time to meet clients or lethargic work ethic. Compensating interns will eliminate these other types of company losses as well as the material replacement costs as interns are expected to assume more responsibility when they are receiving compensation.
CONCLUSION
Summary of Key Points
Compensating interns will benefit both Twenty-First Century Studios and the interns that work for the company. The company will be able to focus on expanding its market share in the entertainment industry instead of focusing on “babysitting” interns. For around $1,250.00 per summer, Twenty-First Century Studios will expand and profit from:
Increased leverage over interns in the workplace
Increased responsibility, punctuality, and professionalism in interns
Higher levels of intern dedication and loyalty to Twenty-First Century Studios
Increased motivation in interns which will lead to better performance and higher productivity
Increased company-wide productivity thus allowing more time for new projects
Increased levels and new streams of revenue
More time for management to focus on own tasks and jobs
More time and energy to expand the company in the industry
Reduced stress, anxiety, and tension in interns
Increased job satisfaction levels for both interns and managers
Request for Action
Swift action is needed to improve the efficiency and work ethic in interns at Twenty-First Century Studios so management can focus on their own roles and expand the business. One surefire way to ensure the growth and success of the company is to reward dedicated, responsible, and professional interns with just compensation. Through research completed in the fields of organizational behavior, compensation is the best solution to the stated problem. Once the decision has been made, this proposal can be enacted as soon as May 2011 for the next round of summer interns.
Works Cited
Dasborough, Dr. Marie. Class Lecture. Organizational Behavior. University of Miami, Coral
Gables, FL. February 8, 2011.
Greenhouse, Stephen. “The Unpaid Intern, Legal or Not.” New York Times. April 2, 2010.
http://www.nytimes.com/2010/04/03/business/03intern.html
Kamenetz, Anya. “Take This Internship and Shove It.” New York Times. May 30, 2006.
http://www.nytimes.com/2006/05/30/opinion/30kamenetz.html
Perry, Phillip. “Pay for Performance.” Industrial Distribution. July 1, 2008: 35.
Terpstra, David E. “The Relative Importance of External, Internal, Individual and Procedural
Equity to Pay Satisfaction.” Compensation Benefits and Review. Nov/Dec 2003: 67-74.
