3 - 2 Pay structure and benchmarking

3 - 2 Pay structure and benchmarking - Pay Structure and...

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Pay Structure and Benchmarking Learning objectives: Integrate information about organizational culture and strategy with the point- factor method of compensation See how differences in a company’s wage policy can have dramatic effects on their overall compensation bill Rationale: The pay structure of a company is a reflection of numerous factors, including the company’s desire to minimize costs, attract the best people, target revenues towards the most important positions, and maintain a sense of fairness among all employees. Of course, these goals are often in opposition to one another. As such, managers must carefully consider how they are making tradeoffs between different values. Scenario Dayton’s is a large department store chain with locations primarily in the upper Midwest. This organization has recently restructured its operations and believes that it needs to engage in a similar restructuring of its wages. The previous compensation package was increasingly seen as inadequate for the company’s purposes. Specifically, wages were set from location to location by individual managers, making cost accounting very difficult, and often resulting in extreme wage fluctuations from store to store. There is data collected at the corporate level that summarizes individual managers’ decisions, but pay policies vary widely from location to location. To rectify this situation, Dayton’s CEO is strongly committed to a mission of developing a single point factor system that will cover wages in all stores. To develop this program, you have been asked to generate a new pay system for the company’s flagship store in downtown Chicago. This store employs approximately 150 individuals, although many are part time. Dayton’s has achieved competitive advantage by being a premier location for designer clothing and accessories. This distinction has been achieved by an intensive training program for sales floor employees, who are known for their courtesy, product market knowledge, and attention to customer concerns. Employees typically work in
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This note was uploaded on 07/18/2011 for the course MAN 4301 taught by Professor Kammeyer during the Fall '10 term at University of Florida.

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3 - 2 Pay structure and benchmarking - Pay Structure and...

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