In: Operations Management
Some organizations have adopted a pay leadership position, in which they pay at a substantially higher rate than do their competitors. Examples of such companies include Zingerman’s Deli, Moo Cluck Moo restaurant, Gravity Payments, CostCo, and Ivar’s Salmon House.
a. Explain three possible reasons for companies’ adoption of a pay leadership policy.
b. Evaluate the validity of these possible reasons and their underlying assumptions.
c. Discuss two factors that will affect whether a pay leadership policy will be successful or not. Give examples of particular organizations to illustrate your analysis.