Case Study 1P: Lead the Orchestra

An orchestra has many different levels for different instruments. The number of
instrumentalists required to play in it depends on how big its size and how large the demand
is.

1. Describe the orchestra’s pay structure in terms of levels, differentials, and job- or
person-based approach.

The Exhibit 1 shows many and different titles; thus, the pay structure of the orchestra has
many levels to be distinguished. In analyzing the pay differential for two positions (one
principal position, one who is not), we could see how large the gap between the positions
even though they play the same instrument. For better understanding, I’ll give an example,
notice the pay differential for Principal Flute and Flute position wherein the former one
receives $4,337 while the latter receives, $1,445. Several other positions with the same
scenario also have the same gap in their pay differential. Thus, this proves that it’s not the
instrument you play, it’s the knowledge and skills for the position that will get you a ticket to
receive higher fee. In explaining the huge gap, it could be also perceived that grave
importance of some instruments like the violins compared to other instruments who doesn’t
play so much note. Moreover, I think the location where the orchestra will perform affect the
pay structure as well. The bigger the town is, the higher pay you will receive too. Therefore,
all of these are part of the concept we call hierarchical pay structure wherein an organization
values the difference in work content, skills, and contributions (Newman, Milkovich, Gerhart,
2014).

The said pay structure can reflect the skills and knowledge an instrumentalist has wherein it
can be considered as person-based approach (Newman, Milkovich, Gerhart, 2014). In here,
we can assume that the more skills and knowledge you have, the higher the pay that you will
receive.

2. Discuss what factors may explain the structure. Why does violinist I receive more
than the oboist and trombonist? Why does the principal trumpet player earn more
than the principal cellist and principal clarinetist but less than principal viola and
principal flute players? What explains these differences? Does the relative supply
versus the demand for violinists compare to the supply versus the demand for
trombonists? Is it that violins play more notes?

The factors that can explain the pay structure are internal and external structure, as well as
organizational structure.
It can be explained by internal structure as this certain part will include the instrumentalist’s
skills and knowledge and how impressing or not when he or she delivered the performance.
In external structure, one concept we call the economic factor could play a key role in the
pay structure in which it pertains than a supply and demand for an instrumentalist depends
on the area where the orchestra will perform like the aforementioned answer in #1. On an
additional note, organizational structure can explain the pay structure in a sense that it
encompasses the working condition, strategies, human capital and strategies, as stated by
Newman, Milkovich, Gerhart (2014).

The reason why an instrumentalist earn more than other instrumentalist is because of the
the importance of the instrument in an orchestra as well as how much work is needed or
done for a performance like playing more notes more than other instruments wherein we
could relate this to the hierarchical pay structure.

Yes, the relative supply and demand for violinists can be compared to the relative supply
and demand for trombonists in a sense that they play a factor in determining how to
formulate the right pay for them. The higher the demand for a supply of talented
instrumentalist, the higher the pay. While the lower the demand for a supply of talented
instrumentalist, the lower the pay will be.

3. What is the pay differential between the principal viola and next highest paid viola?
What about between the principal trumpet and the next highest paid trumpet? Why
these differentials between the principal and other? Why aren’t they larger? Smaller?
Why is the differential between trumpet players different than between the viola
players?

A principal viola player receives a fee of $5,036 whereas the next highest paid viola player
receives a fee of $2,483 which their pay differential is amounting to $2,553. On the next
question, the principal trumpet player receives $4,233 while the next highest paid trumpet
player receives a fee of $3,638, which their pay differential is equivalent to $595.

With respect to the given pay differentials, we can perceive that some instrumentalists needs
a better push or motivation in the form of incentives to perform at their best and reach a
higher position that they deserve. On additional note, it could also be related to the skills
needed to play that instrument and the demand of that instrument in an orchestra. So, the
pay differential could act as a motivational factor and a determinant of how supply and
demand on instrumentalists and instruments affects the pay structure for each position.

4. How well do equity and tournament models apply? Do custom and tradition
play any role? What about institutional theory?
In relation to hierarchical pay structure, the tournament model seems to apply since pay
increases substantially if a musician moves to a principal position. The size of the differential
between the top jobs and the other jobs as derived from the data given in Exhibit 1 is rather
significant. On an additional note, there is minimal evidence to support the application of the
equity model wherein we need to identify the similarities and differences of each related
position to another first before we can apply this model. Thus, more information is needed to
assess the perceptions of the fairness of the pay structure by the musicians.

Additionally, the elaborated hierarchical pay structure seems like it’s contradict Drucker’s
depiction of the orchestra as a cooperative work unit for the future where all members are
working in harmony toward a single goal because of the competitive ambience that it poses
whereas one would want to reach a higher position to get a higher pay. In relation to this, we
can’t identify if custom and traditional play any role as each instrumentalist would surely be
competitive no matter what customs or traditions they have as they are all vying to get higher
position with greater pay.

Newman, Milkovich, Gerhart (2014) states that institutional theory sees firms as
responding/conforming to normative pressures in their environments so as to gain legitimacy
and to reduce risk. This means that to reduce risk and due to pressure their received from
their environments, organizations simply imitate others wherein they adapt the best practices
from the other organizations. This is not applicable to an orchestra as they have a reward
plan that is used to energize the artists and hone their skills and attention so that they
operate close to peak performance.

REFERENCE:

Milkovich, G., Newman, J. & Gerhart, B. (2014). Compensation (11th ed.). Avenue of the
Americas, New York: The McGraw-Hill Companies, Inc.