Pay Decisions at Performance Sports

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Week 1 Written Assignment: Week 3 Case Study

1. What factors should Perkins and Balkin consider when setting the wage for the purchasing agent position? What resources are available for them to consult when establishing this wage?

When setting the wage for the purchasing agent position Perkins and Balkin must consider their internal and external factors.

Internal factors include compensation strategy of the organization, worth of the job, employee’s relative worth and employer’s ability to pay. A company’s compensation strategy is how they plan to compensate their employees in general terms. The worth of a job is just what it says, what that position is worth to the company in the revenue or cost savings it generates. An employees relative worth is how that individual employee performs next to their counterparts. An employers ability to pay may be determined by how much margin and/or revenue the company generates.

External factors include conditions of the labor market, area pay rates, cost of living, collective bargaining and legal requirements. The labor market reflects how much supply and demand there is within the industry for a particular position. Area pay rates are the general pay range that employers in the area are willing to pay for positions. The cost of living of any area of the country can vary widely and has a definite effect on what the compensation of a position will be. Collective bargaining references union negotiations for large groups of union workers. The primary goal of these negotiations is typically salary increases.

2. Suggest advantages and disadvantages of a pay-for-performance policy for Performance Sports.

The advantages of a pay for performance policy is typically that productivity is increased while overall employee compensation costs are decreased because it doesn’t pay poor performers well. The disadvantages are measuring employee performance isn’t always easy. Employees...
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