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What should Harvey Finley do with the compensation scheme of Cathy Brannen, given her contribution and the present standing of the Troupville Business Systems?
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.
Increasing growth of the company
Sufficient knowledge of the business
Lack of proper compensation structure
Indefinite job description
Timely expansion of business
Booming computer industry
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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The ACA 2 will eliminate the 2% override that would result to equal the compensation among other employees. However, Cathy Brannen would then probably complain about this elimination of the 2% overrides as part of her compensation. Cathy therefore, would certainly ask for justification of these changes knowing that she has not only been a competent and an effective employee but she has been also working in the company for several years.
In the ACA 3, this action would somehow again justify the percentage overrides of Cathy Brannen because she will be given higher responsibility as the General Manager of the business. Though given a much lower percentage override, this will compensate such decreases in the override by giving Cathy Brannen extra benefits and bonuses. The only problem that would arise from this action would be that Cathy would complain on such decreases given that she has been with the business since the beginning of the business and has contributed a lot already.
After having considered the important aspects of this case, we further recommend ACA 1 which is to retain the 2% sales override but delegate greater company responsibilities to her in the form of promotion as Marketing Manager.
This ACA will prove to be an optimal solution to the stated problem of Troupville Business Systems because this addresses our chosen objectives of establishing a reasonable compensation arrangement which will be agreeable on both parties and validates the 2% sales override provided to Brannen. This likewise provides and immediate solution to the present problem of the company as much as a long term solution on the problem regarding right form of compensation and other matters concerning human resource.