Question

SUBJECT: HUMAN RESOURCE MANAGMENT//Complete Exercise #2 - page 430 of strategic compensation. Three firms are described briefly below. For each firm, identify the role (if any) that you believe indirect pay should play in the compensation system, and the specific benefits that it would make the most sense to offer. Explain why. a. A company offers lawn maintenance and yard cleanup services in the summer and snow removal services in the winter. It employs about 600 people at peak season (in summer) and has branches in major cities across the Prairies. b. A retail clothing chain offers personalized service and caters to upscale customers. It is located in major cities across Canada and employ's approximately 600 sales staff. c. A computer software firm develops customized software for various specialized applications for individual clients. Located near Ottawa, it employs about 1000 people.

Answer 1

Answer-a) The company here only employs large number of employees in the peak season. In the summer they do maintenance and clean up services and winter they do snow removal services. By this we know that they dont require Employees throughout the year , they want Employees only in the peak season. So their is no use if indirect pay over here as they don't need to retain their employees with benefits such as insurance, rewards etc. Here only direct benefits such as salary or hourly wage is enough.

Answer-b) The Company here is a retail clothing chain offering products and services to upscale customers. The role that indirect pay plays over here is minimun because the sales people are more focused on their incentives and commissions. They do get indirect benefits such as gratuity, insurance etc, but these done effect their job rotation. As they switch over to those companies who give more incentives.

Answer-3) The Company here operates in computer software for application for individual clients. In a tech firm, the indirect pay has a bigger role because here their is minimum incentives and people are more concerned about their social benefits like health insurance, child care etc. The specific benefits that make the most sense to offer is a fixed salary, a variable salary and a yearly bonus.