PAY DECISIONS AT PERFORMANCE SPORTS- A CASE STUDY
Katie Perkins owns Performance Sports which is a mail-order golf equipment business. At present she has sixteen people working for the firm and all of them receive fixed pay. Perkins feels the need for a new managerial position in the firm, of a purchasing agent with an experience of six to eight years in the same business.
The challenge here for Perkins is to come up with a wage that creates a win-win position for both sides or at least adequate satisfaction for the new employee to work energetically for the company. There are some factors or elements that must be considered while setting up the wage for this new employee. Firstly since this is a managerial position than the wage should be greater as compared to the wage of the customer representatives and somewhere close to the wage of the current assistant manger of the company. Secondly Perkins intends to have some one who has a six to eight years of practice in the business so the candidate past wages must be evaluated. Other factors may be his performance, past track record and the comparison with the wages provided by competitors for the same position.
Perkins has recently found out that one of his competitors is providing its customer service representatives wages on “pay for performance” basis. On the same time two customer service representatives have showed dissatisfaction with the current pay arrangement since they think that they are paid less in contrast with the profits that they bring for the company. Introducing pay for performance system in the firm would be one of the trickiest decisions for Perkins since this system brings with its self a lot of advantages and disadvantages. Pay for performance system motivates and retains key talent hence increasing the overall productivity of the organization and creates a healthy competition amongst employees. But on the other hand it can create rifts amongst the...
References: Henderson, R. I. (1998). Compensation management: rewarding performance. ( 2nd Ed.). Reston Pub. Co.
Please join StudyMode to read the full document