BUS 310

Topics: Management, Motivation, Reward system Pages: 13 (3150 words) Published: April 12, 2015

Compensation at Carrington

Executive Summary: 
The managerial style I chose: as HR person I would use Human Relations Managerial Strategy. This strategy helps to coordinate employees and supervise them. The organization is not big so it would be appropriate to have informal (grapevine) communication as well. This strategy will help me motivate employees both extrinsically and intrinsically to enhance task behaviour. With this strategy it will be autocratic decision making, so only top-level management would be able to make decision with minor consultation (Long, 2010). However the opinion of employees is important. Providing comfortable environment for work will increase employees’ motivation, their loyalty and performance. Proposed compensation strategy: The compensation mix consists of three components: base pay, indirect pay and performance pay. The largest part of compensation package in the company will be base pay. The salary will be calculated on monthly basis. In this industry much depends on employees performance: how they treat customers and how they perform their job duties. That is why part of their salary will depend on their performance results. Performance pay will consist of two parts and coincide 10% of total billings. I will give this bonus to technicians, set the goals every two weeks, set achievable goals on the amount of sales and split the bonus equally between the group. In order to work well this plan must be designed with input from employees. Last part of the commission mix is indirect pay plan that will be fixed benefit system where all employees are covered by a standard package of benefits (Long, 2010 p.445). It will include mandatory benefits, health benefits, pay for time not worked and miscellaneous benefits. Summary of the compensation mix is: 47% of base pay, 45% of performance pay and 8% of indirect pay. Introduction:

 Carrington Pest Control Company is a local pest control firm in a large city. The company’s business is to provide safe environment out off termites and other pests by annihilation. It is medium sized firm that has two locations and 18 technicians. The company is in business for around 20 years. Due to nature of the business: high turnover rate, unreliable service and shady business practices, it was hard to gain a good reputation with the public (Miller, 2001). One of the biggest issues that the company has is the high turnover rate, which is around 50%, and it is less than average in the industry. The company spends more money on recruitment and training and loose customer loyalty because they deal with different techs. Most of quits occurred within the first year, as job requirements weren’t suitable for employees’ interests (Miller, 2001). Moreover it is challenging to find a candidate because of low unemployment. Another problem is unfavorably perceiving of a new plan by employees. Most techs in Midtown branch are complaining about new compensation plan that does not work for them well (Miller, 2001). Managerial Strategy: 

Describe the environment of Carrington, is it stable or unstable, simple or complex – state why? Pest Control Company is in a complex environment (Naceur, 2000). The external elements of real importance are: a few big competitors, lack in labor market, customers and service quality. Government regulation is minimal and it has little impact (minimum wage and working conditions). Human resources are a big problem because the company has not many workers and turnover rate is relatively high (Miller, 2001). In this industry customer prefer to work with the same company over the years and get high quality service. Also management cannot retain employees with a new plan. The labor market has low supply and low level of unemployment, which makes harder to replace employees. It can be considered that the company is stable. There are a few reasons for that: the management knows the average turnover rate, the business and products remain the...

References: Long, R. (2010). Strategic compensation in Canada, 4th ed. Nelson Education Limited, Toronto, Canada.
Miller, Thomas. (2001). Compensation at Carrington: The New Pay Plan. The University of Memphis. The North American Research Association
Naceur, A. K. (2000). Environmental Uncertainty. Retreived from ASQ: http://asq.org/pub/qmj/past/vol10_issue4/jabnoun.html
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