PROBLEM
What should Harvey Finley do with the compensation scheme of Cathy Brannen, given her contribution and the present standing of the Troupville Business Systems?
OBJECTIVES
To establish a compensation package that would be fair for Cathy Brannen and the rest of the Troupville employees.
To keep Cathy Brannen in the company with an arrangement that is agreeable to her and the company.
To find an alternative solution that would justify the 2% override on Cathy Brannen’s compensation.
AREAS OF CONSIDERATION
• Salary scheme of other employees in managerial positions.
• Cathy’s seven years of stay in Troupville Business Systems.
• Annual profit of the company.
• Rate of compensation of a receptionist.
• Cathy’s previous compensation in her prior job.
• Cathy’s competitiveness, skills, and talents.
• Reaction from other employees who have known Cathy’s compensation scheme.
• Agreement between Cathy and Harvey regarding the onset of the business.
• Harvey’s financial capability in paying his employees.
SWOT ANALYSIS
Strengths Weaknesses
Increasing growth of the company
Competent employees
Sufficient knowledge of the business
Lack of proper compensation structure
Indefinite job description
Opportunities Threats
Wide connections
Timely expansion of business
Booming computer industry
Other competitors
Possible return of economic recession
ALTERNATIVE COURSES OF ACTION
1. Retain the 2% sales override but delegate greater company responsibilities to her in the form of promotion as Marketing Manager.
2. Eliminate the 2% Cathy Brannen’s compensation but promote her as the General Manager of the business and give her a better wage incentive plan in the form of benefits or extra bonuses.
3. Decrease Cathy Brannen’s percentage override from 2% to 1%, promote her as the General Manager of the business, and give her extra bonuses and benefits.
ANALYSIS OF THE ALTERNATIVE COURSES OF ACTION
The ACA 1 will justify the idea of giving Cathy Brannen a 2% sales override since this entitles her with more work to do for the company. The 2% sales override will serve as a royalty to her indispensable contribution to the success of the company. This will also maintain her interest in further working with the company by boosting her work morale noting that she had spent a great deal of effort and invested so much time to make both ends meet for the company. Her promotion to Marketing Manager will prove to be fair enough with the other top level managers she will eventually work with and fit with her potentialities. And further justify the cost of her compensation arrangement will keep Brannen as an essential asset of the company and uphold fairness on the part of the employees of the Troupville Business Systems.
Also, when she steps out of the position, the company will hire a new receptionist in replacement to her and avoid disrupting transactions.
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