249218657-Wayside-Compensation-Final.docx - Compensation...

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Compensation Issue Analysis The Current System and its Purpose In principle, a compensation package aims to influence the controllable behaviours of a manger in ways which promote goal congruence. Wayside motels being profit centers, the desired behaviours would be ones which maximize profit. The current package however fails to account for the non-financial behaviours which undermine the corporate strategy and is capable of rewarding managers for elements beyond their control. RGMs have the discretion in recommending adjustments to the inn manager’s base salary. The choice to recommend an adjustment is arbitrary, however a 20 point criteria which takes into account the motel’s quality of service and other managerial elements has been unofficially used to aid in this recommendation. Using non-financial criteria does provide benefits in gauging performance; however the implementation of the 20-point criteria as part of long-term salary adjustments is ineffective. A base salary is commonly used to provide employees with basic and predictable cash flow and sets minimum standards of behaviour. Exposing this salary to annual adjustments based on elements which are subject to rapid short- term change fails to uphold the purpose of providing some predictability and security for the inn manager.
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