Discussion Board # 4 HR.docx - Introduction For many businesses in today\u2019s belt-tightening economy decisions on pay need to be strategic to ensure

Discussion Board # 4 HR.docx - Introduction For many...

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Introduction For many businesses in today’s belt-tightening economy, decisions on pay need to be strategic to ensure that employees are treated fairly and to ensure that businesses can remain viable. This requires knowing what your competitors pay their employees and knowing your own salary budget. But knowing what your competitors are paying can be both valuable and painful. As a primary stakeholder and former CEO of Costa Vida, a fast-growing chain of fresh Mexican restaurants, Nathan Gardner knew he was competing against some restaurant chains with competitive compensation systems. Costa Vida is a fresh Mexican grill featuring Baja-inspired foods that are made from scratch daily. Following a trip to Cabo San Lucas on the Baja Coast in Mexico, Costa Vida founders JD and Sarah Gardner were inspired with a vision: Bring the freshly made local cuisine with the vibrant lifestyle to the United States. They started their first restaurant in 2001, and after just 13 years, Costa Vida has more than 50 franchises in 15 states of the Union, and as of 2017, 3 locations in Canada. One of the main challenges Costa Vida faces is the fierce competition for customers as well as employees. For months, Nathan agonized over how he could develop a competitive compensation plan that matched the objectives of the organization, but that fell in line with the tight budget of each individually owned franchise unit. He stated, “We, of course, leave the final compensation decision to the franchise owner, but we do all we can to educate and persuade our franchisees to be competitive and fair. In the long run, this is how they can maintain a superior level of customer satisfaction.” 1
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Nathan pointed out that a strong benchmark for them has been In-N-Out Burger. In-N-Out started in California and is known for its great compensation package. They start out all their new “associates” (aka employees) at a minimum of $10 an hour. They also offer flexible schedules to accommodate school and other activities, paid vacation, free meals, and a 401k retirement plan. For full-time associates they provide medical, dental, vision, life, and travel insurance coverage. Their reason for paying so high is
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