Yum Compensation Strategy

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The fast food industry is one of the highest grossing employer in the nation. Its compensation strategy has been on the forefront of many debates and the discussion of employee dissatisfaction. Such disparity in compensation has prompted nationwide protest of workers and garnered attention from policy makers, media outlets and stakeholders. Much of the outcry has focused on CEOs being paid lucrative salaries while the front line workers’ wages are at or slightly above the poverty level. As the dilemma continues to unfold in the media, compensation plans continue to play an enormous role in the recruitment and retention of workers. As discussed previously in Assignment 1, Yum! Brands, Inc. is a Fortune 500 corporation based out of the United States and comprises of three major submarkets that have become household names across the globe. Yum! is one of the largest public company in the fast food industry. Yum! Brands operates licenses that include KFC (chicken), Taco Bell (Mexican food) and one of America’s favorite, Pizza Hut (pizza). The first assignment discussed factors that contributed to low wages of front line workers and CEO as well as pay disparity. Such factors included: laws and market influences; compensation strategies; challenges related to compensation and compensation practices as it relates to the company and its stakeholders. Currently, Yum! has over 40,000 restaurants in 128 countries and territories, 90% are owned and operated by franchisees or licensees in the United States and 67% internationally (Yum!, 2014). By meaning, Yum! does not own or operate the restaurants. Instead a legal agreement is entered into whereby the franchise owner pays Yum! for the use of their trademark, trade name and adv... ... middle of paper ... ...ty is far reaching. For example, to be considered for a Pizza Hut franchise, a worker will need to have $360,000 in cash and net worth of $1 million. The total estimated initial investment will be between $1,290,000 and $3,088,000. If the worker has $360,000 to invest and good credit they will meet the net worth requirement (BusinessMart, 2010). A fair and equitable compensation plans should factor in what employees perceive as valuable based on each employee particular situation. Such rewards should provide a balance of intrinsic and extrinsic benefits. Perks and benefits can make or break a company's ability to attract and retain workers in any industry and not just the fast food industry. Providing benefits such as health insurance benefits such as paid holidays and paid vacation time, will show employees that they are valued team member of the company.

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