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Wrap It Up

Developing a new Compensation Plan

Presented By :
Monica Singh - 13810052
Amar Keshari - 13810008
Rakesh Ranjan - 13810066
Shivani Singh - 13810072
Introductio
n
Proble
m
Statem
ent
ShareI
t

Propo
sed
Soluti
on
Background
 Shawn Jackson and Simon Sethi

 Northern California, 2002

 Fresh, healthy, locally sourced ingredients

 Consumer preference of quick meal alternatives

 30 restaurants by 2011

 Focus on freshness and special diets

 All stores company-owned

 Passion for delivering fresh quality food


Concerns
 Tight relationships with long term employees

 Centralized social media activities

 Disorganized recruiting

 High turnover

 Difficult to attract and retain top talent

 Lack of motivation among managers


 Frustration among employees at all levels

 Declining customer satisfaction

 No change in menu

 Regular customers not given any discounts

 Manager turnover

 Inconsistency in menu and service due to local

sourcing
Compensation
It is what employee receive in exchange for their contribution
to the organisation.

 Nature of Compensation
a. Base Pay
b. Variable Pay
c. Benefits

 Dimensions of Equity in Compensation Planning

a. Internal Equity
b. External Equity
c. Individual Equity
Objective of Compensation Planning

 Attract Talent

 Retain Talent

 Ensure Equity

 New and Desired Behaviour

 Control Cost

 Comply with legal rules

 Ease of operation
ShareIt
 For Individual store profits
 Motivation for Managers
 Store Selection for Pilot Program

Comparative Analysis

Store Name Santa Monica Costa Mesa

Location New City Centre Shopping Mall


Experience
Opened in 2004 Opened in 2007
Employee Enfranchisement

 Achieved through an integration of empowerment

with methods of pay for performance .

 Participatory management : Encourage employee to

participate in organizational decision making.

 Employees are encouraged to voice their opinions

about their working conditions.

 Such combinations have the potential for producing

extraordinary service.
ShareIt Insights
Existing Pay Structure ShareIt Structure

Basic Pay: At Par with the Profit = Performance Metric


Industry
Variable: Differs w.r.t. amount Quarterly Appraisal
and qualifiers Linked to Profits not
Revenue
5 Bands : Revised on yearly Store Manager : 35% Profit
basis
No pay difference b/w top Associate Manager : 15%
and low range of band Profit
No incentive to improve WrapItUp :50% Profit
after band is achieved
Benefits were Paid one
WrapItUp Manager Compensation vs Industry Benchmark
Santa Monica Strategy

 Setup a Facebook Page and Twitter account.


 New Menu was designed – “ RepeatIt”
 Offered discount coupons
 Chef appearances and book Signing

Costa Mesa Strategy

 Focused on Cost Reduction


 Renegotiated terms with suppliers
 Substituted with less expensive ingredients
Income Statement of Costa Mesa Store before ShareIt
Income Statement of Costa Mesa Store during ShareIt
Income Statement of Santa Monica Store before ShareIt
Income Statement of Santa Monica Store during ShareIt
Customer Surveys Report
Outcomes Of Steps Taken
Parameters Santa Monica Costa Mesa
Revenues Increased by 10.2% Decreased by
1.45%
Profitability Increased by 24.5% Increased by
21.8%
Working Increased from
hours 50hours to 70 -
hours a week
Customer Mixed results Downgraded
surveys customer
satisfaction
Solutions
 Based on these points we observe that the result of
the programme showed improvement in profitability.
Stores have been able to increase their profits and
have been able to increase the incentives for
managers.

 However we opine that the cost containment


approach adopted by the manager at Costa Mesa
would not sustain in long run and would lead to
customer dissatisfaction.

 The employee turnover is bound to increase in this


scenario. We recommend the customer centric
 The promotions and new menu items introduced
would add value to customer satisfaction.

 The idea of taking orders through text messages

would further help the store to retain its customers.

 Better customer relationship program should be

introduced. There is no such mention in the case


that how the employees should be motivated other
than giving improved incentives.

 Rework on the compensation plan


 There should be some metrics to measure the

employee satisfaction level also. This can lead to


have better satisfied pool of employees which in turn
would yield high profitability with improved customer
satisfaction.

 Reyes should roll out the programme in some other

stores to evaluate how other store managers would


react to the combination of freedom and pressure
that ShareIt program offers.

 Include multiple parameters like revenue and size of


Thank You