What levels of pay and benefits should you offer?

An important element of the human resource function is the determination and administration of pay and benefits. Pay includes employees' base salaries, pay raises, and bonuses, and is determined by a number of factors such as characteristics of the organization, the nature of the job, and levels of performance. Employee benefits are based on membership in an organization (and not necessarily on the particular job held) and include sick days, vacation days, and medical and life insurance. It is important to link pay to behaviors or results that contribute to organizational effectiveness.

Read the case concerning one of the leading hotel chains in the world, The Four Seasons Hotels and Resorts. The Four Seasons has an excellent reputation for customer service and also for employee satisfaction. Afterwards, analyze the reasons behind this reputation.

In 2015, Four Seasons Hotels and Resorts was one of only 12 companies to be ranked one of the "100 Best Companies to Work For" every year since Fortune magazine started this annual list. The Four Seasons often receives other awards and recognition such as being named the "Best Hotel Group Worldwide" by Gallivanter's Guide and dominating Travel & Leisure's World's Best Awards Readers' Poll and Condé Nast Traveler's Readers' Choice Awards based on customers' responses. In an industry in which annual turnover rates are over 35%, the Four Seasons' is around 13%. Evidently, employees and customers alike are satisfied with how they are treated at the Four Seasons. Understanding that the two are causally linked is perhaps the key to the Four Seasons' success. As the Four Seasons' founder, Isadore Sharp said, "How you treat your employees is how you expect them to treat the customer."

The Four Seasons was founded by Sharp in 1961 when he opened his first hotel. It was called the Four Seasons Motor Hotel, located in a less-than-desirable area outside downtown Toronto. Whereas his first hotel had 125 inexpensively priced rooms appealing to the individual traveler, his fourth hotel was built to appeal to business travelers and conventions. It had 1,600 rooms, conference facilities, several restaurants and banquet halls, and an arcade of shops. Both styles of hotels were successful, but Sharp decided he could provide customers with a different kind of hotel experience by combining the best features of both kinds of hotel experiences—the sense of closeness and personal attention that a small hotel brings with the amenities of a big hotel to suit the needs of business travelers.

Sharp sought to provide the kind of personal service that would really help business travelers on the road—giving them the amenities they have at home and in the office, amenities they miss when traveling on business. The Four Seasons was the first hotel chain to provide bathrobes, shampoo, around-the-clock room service, laundry and dry cleaning services, large desks in every room, two-line phones, and around-the-clock secretarial assistance. While these are relatively concrete ways of personalizing the hotel experience, Sharp realized that how employees treat customers is just as, or perhaps even more, important. When employees view each customer as a unique individual with his or her own needs and desires, and empathetically try to meet these needs and desires and help customers overcome any problems or challenges they face and truly enjoy their hotel experience, a hotel can indeed serve the purpose of a home away from home (and an office away from office), and customers are likely to be loyal and highly-satisfied.

Sharp realized that for employees to treat customers well, the Four Seasons needed to treat its employees well. Salaries are relatively high at the Four Seasons by industry standards. Employees participate in a profit sharing plan, and the company contributes to their 401(k) plans. Four Seasons provides medical and dental insurance. All employees get free meals in the hotel cafeteria, have access to staff showers and a locker room, and receive an additional highly attractive benefit—once a new employee has worked for the Four Seasons for six months, he or she can stay for three nights free at any Four Seasons hotel or resort in the world. After a year of employment, this benefit increases to six free nights, and it continues to grow as tenure with the company increases. Employees like waitress Michelle De Rochemont love this benefit. As she said, "You're never treated like just an employee. You're a guest . . . You come back from those trips on fire. You want to do so much for the guest." The Four Seasons also tends to promote from within. For example, while recent college graduates may start out as assistant managers, those who do well and have high aspirations could potentially become general managers in fewer than 15 years. This promotion system helps to ensure that managers have empathy and respect for those in lower-level positions as well as the ingrained ethos of treating others (employees, subordinates, coworkers, and customers) as they would like to be treated. All in all, treating employees well leads to satisfied customers at the Four Seasons.

1.The Four Seasons Hotel and Resorts can causally link its ____________ to its customers’ satisfaction and the many awards it has received including being one of the “100 Best Companies to Work For.”

A.use of programmed decision making

B.high turnover rate

C.high levels of pay and benefits

D.use of strict supervision over its employees

E.cost cutting measures

2.The Four Seasons uses ________ to motivate superior customer service.

A.high levels of pay and benefits

B.high pay levels with low levels of benefits

C.average pay levels with average benefits

D.average pay levels with high levels of benefits

E.high pay combined with average benefits

3.Which of the following does the Four Seasons have to offer by law?

A.matching contributions to 401(k) plans

B.high salaries

C.profit sharing plans

D.free meals in the cafeteria

E.Social Security insurance

4.Why does the Four Seasons continue to offer such extremely expensive benefits to its employees?

A.The Four Seasons focuses only on long-term costs, and these are short-term costs.

B.The workers’ union negotiated them.

C.The benefits offered by the Four Seasons are actually normal in the luxury hotel market.

D.It can write them off on the corporation’s income taxes.

E. The value gained in worker motivation outweighs the cost of the benefits in the long run.

5.The Four Seasons pays high salaries and provides expensive benefits. This suggests they are not following a(n) ______ strategy.

A.cafeteria plan

B.low-cost

C.employee satisfaction

D.high-performance

E.customer service focused

6.The Four seasons provides some unusual benefits. As described in the case, which of the following is NOT one of the benefits that sets the Four Seasons apart from other hotel chains?

A.high levels of health and dental insurance

B.free vacations at company-owned resorts

C.accrued vacation and sick leave days

D.free meals in the hotel cafeteria

E.access to staff showers and locker rooms

7.The Four Seasons offers _____ to its employees. Employees say this benefit lets them know what the guests feel like and makes them want to do even more for guests.

A.locker rooms and employee showers

B.free stays as guests at any of the company’s properties

C.high pay levels

D.matching 401(k) programs

E.company products such as robes and shampoos

1.

Superior Paver sued homeowners Pamela and Mark for $14,350 it claimed was still owed as extra work incurred in installing concreate pavers in the driveway of their residence. Pamela and Mark had previously paid the $45,000 contract price, and they counterclaimed for $60,500 for the reasonable cost of making the contractor’s work conform to the contract. The evidence established that Superior did not install a proper base of 3” to 4” of crushed limestone before installing the pavers as required by the contract, which caused the pavers to move creating gaps between the pavers and causing water to flow into the garage. To correct the problem the pavers needed to be removed and the area excavated and replaced with a crushed limestone base before, again, installing the pavers. Superior claimed it had substantially performed the contract as their performance resulted in a fully usable driveway, and, the proper remedy, if any, was the reduction of the market value of Pamela and Mark’s property due to any defective performance. Superior further asserted that the cost of redoing the entire job would be economic waste.

The result?

2.

A franchisee owner (Owner) of a popular hotel chain was bound by their franchise agreement with Mega Hotel Inc (Mega). Part of Owner’s obligations included that Owner maintain their 60 room hotel to at least minimum quality assurance standards. Owner’s hotel failed five consecutive quality inspections over two years, with the inspector noting damaged guest rooms, burns in the bedding, and severely stained carpets. Mega canceled the franchise agreement. Owner sued Mega for wrongfully canceling the agreement (breach of contract).

Owner’s defense against Mega cancelling the franchise was the following. The bridge repairs on the road leading to the hotel had adversely affected the hotels ability to live up to the franchise agreement. Further, the repairs made it commercially impractical for Owner to live up to the franchise agreement. For reasons such as the inability of hotel staff to arrive on time and properly clean the rooms. Will Owner’s defense prevail?

In a survey of 3,827 ​travelers, 1,459 said that location was very important for choosing a hotel and 1,175 said that reputation was very important in choosing an airline. Complete parts ​(a) through​ (c) below.

a. Construct a 95​% confidence interval estimate for the population proportion of travelers who said that location was very important for choosing a hotel.

b. Construct a 95​% confidence interval estimate for the population proportion of travelers who said that reputation was very important in choosing an airline.

c. Write a short summary of the information derived from​ (a) and​ (b) Which of the following is the best summary of the information derived from​ (a)?

A.One can be 95​% confident that the sample proportion of all travelers who said that location was very important for choosing a hotel lies within the interval in​ (a).

B.One can be 95​% confident that the population proportion of all travelers who said that location was very important for choosing a hotel lies within the interval in​ (a).

C.There is a 95​% probability that the sample proportion of all travelers who said that location was very important for choosing a hotel lies within the interval in​ (a).

D.There is a 95% probability that the population proportion of all travelers who said that location was very important for choosing a hotel lies within the interval in​ (a).

Which of the following is the best summary of the information derived from​ (b)?

A.One can be 95​% confident that the population proportion of all travelers who said that reputation was very important in choosing an airline lies within the interval in​ (b).

B.One can be 95​% confident that the sample proportion of all travelers who said that reputation was very important in choosing an airline lies within the interval in​ (b).

C.There is a 95​% probability that the sample proportion of all travelers who said that reputation was very important in choosing an airline lies within the interval in​ (b).

D.There is a 95​% probability that the population proportion of all travelers who said that reputation was very important in choosing an airline lies within the interval in​ (b).

Three different companies each purchased trucks on January 1, 2018, for $76,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $6,000. All three trucks were driven 81,000 miles in 2018, 55,000 miles in 2019, 46,000 miles in 2020, and 71,000 miles in 2021. Each of the three companies earned $65,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes. d-1. Calculate the retained earnings on the December 31, 2021, balance sheet?

Three different companies each purchased trucks on January 1, 2018, for $74,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $5,000. All three trucks were driven 80,000 miles in 2018, 60,000 miles in 2019, 45,000 miles in 2020, and 70,000 miles in 2021. Each of the three companies earned $63,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes. d-1. Calculate the retained earnings on the December 31, 2021, balance sheet?

Three different companies each purchased trucks on January 1, 2018, for $74,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $5,000. All three trucks were driven 80,000 miles in 2018, 60,000 miles in 2019, 45,000 miles in 2020, and 70,000 miles in 2021. Each of the three companies earned $63,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes. c-1. Calculate the book value on the December 31, 2020, balance sheet?

You are trying to develop a strategy for investing in two different stocks. The anticipated annual return for a $1,000 investment in each stock under four different economic conditions has the following probability distribution:

Probability : 0.1 , 0.3, 0.3 , 0.3 .

Economic Condition: Recession, slow growth, moderate growth, fast growth.

3. Return} -Stock X: -100 , 0 , 80 , 150 .

4. - Stock Y: 50 , 150 , -20 , -100 .

a) Covariance of stock X and Y

The head of maintenance at XYZ Rent-A-Car believes that the mean number of miles between services is 2135 miles, with a variance of 145,924

.

If he is correct, what is the probability that the mean of a sample of 40 cars would differ from the population mean by less than 29 miles? Round your answer to four decimal places.

1)  Average tire life is 30,000 miles (μ = 30,000) and σ = 2,300 miles.  What is the

     probability that a tire will last 35,000 miles (or more)?

2)  If μ = 130 and σ = 20 on an employment test and the company only hires from the top

     75% of scores, what is the lowest score you can get and still get hired?

3)  The SAT has μ = 500 and σ = 100.  What score would put you in the top 15%?

4)  For a standard IQ test, μ = 100 and σ = 15.  

      a) What IQ would put you in the top 10%?

      b) If your IQ was 135, what percentage of the population is smarter than you?

Superhero physics: a) Choose a height between 1.00 miles and 3.00 miles. How fast would a superhero have to throw a ball straight upwards in order for it to rise this high? Give your answer in both m/s and mph. Assume air resistance is negligible, since at these speeds that's as believable as superheroes are. b) Choose a time between 1.00 minutes and 3.00 minutes. How fast would a superhero have to throw a ball straight upwards in order for it to spend this much time in the air (that is, for it to take that much time to return to their hand)? Give your answer in both m/s and mph. Same assumption. c) Without resorting to further calculations, which of these two balls will be in the air longer? Explain your reasoning, explicitly citing evidence. d) Choose one case, (a) or (b), and calculate the time required for the ball to rise halfway to its highest point, and the time to rise from there to the highest point. Check: see next question. e) Why does it take less time to rise halfway to the highest point than to rise the rest of the way?