Question

In: Operations Management

Some organizations have adopted a pay leadership position, in which they pay at a substantially higher...

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.

Solutions

Expert Solution

Answer: Three potential explanations behind organizations reception of an authority approach are-

1. It need to empower initiative at each degree of the executives inside the association.

2. Initiative positions give awareness of other's expectations to the individuals. What's more, thus they perform better in pressure circumstances.

3. The compensation administration arrangement empowers initiative and installment at various degrees of Management subsequently that pay out is a significant inspiration factors for individuals to exceed expectations in the association.

The fundamental suppositions for this are-

1. Individuals will in general perform better in the event that they are given the post of initiative.

2. In the event that individuals are paid more on authority position it give them a feeling of fulfillment and inspiration to perform better.

Two factors that will decide climate the administration approach will be fruitful or not are-

1. The presentation of the whole group will improve and reflect in the business income of the organization.

2. The standard for dependability in the organization will decrease if the compensation administration approach is working acceptable.

One of the organizations which is receiving the compensation initiative is taken care of Ex . FedEx energizes initiative in all aspects of the executives inside the association. It has the arrangement of individuals administration benefit which means superb consideration for its representatives It energizes advancement inside the association and gives authority chances to its workers.

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