Question

Developing a Compensation Structure

For this assignment, put yourself in the following scenario:

After a few years of selling new cars, you managed to get the funding to start your own small new car dealership as a sole proprietorship. Your starting staff of 10 employees will be as follows:

You are the Owner-Manager and will oversee everything. You will also be the Sales Manager and do some selling.

Sales staff. Three sales people reporting directly to you.

Service and Parts Manager. You will have one person supervise the mechanics and detailer.

Mechanics. You will need three mechanics to work on the cars.

Detailer. One person is needed to clean the cars, one to help out the mechanics, and one to work in parts.

Office staff. Two people must be available to answer phones, greet customers, make up the bills and collect money from sales and service, and do other paperwork including bookkeeping. They will report to you.

For this assignment, prepare your responses to the following questions as you design the pay structure for your car dealership:

What type of compensation will each classification of employee identified above to receive for their work? Will you give them a wage, a salary, or incentive pay (commissions, piecework, or standard hour)? Use Chapter 6's discussion of individual and organizational incentive pay types as you make these decisions. Remember you are NOT including Benefits in this discussion - only compensation/pay/etc. Be very detailed in what type of direct financial compensation you will offer - though I don't want you to say you will pay an office worker $10/hour. No number specifics are required.

As really the only executive in the care dealership, what will your compensation package include

What other considerations do you need to work through and consider as you finalize your pay structure for your new dealership? This information should be put in a listing format - bullets, etc.

Now, assume you are ready to begin offering benefits - indirect financial compensation - to your employees. Which benefits will you offer to all employees? Are there benefits you would offer to individual classifications of employees? Which ones? Will you offer stock options? Will you offer health care? Will you offer retirement contributions? What is mandated that you offer/which are voluntary for you to offer? Your text has a good discussion of a wide variety of benefit offerings.

Answer 1

The staff ought to be inspired for higher sales and incline a commission on the quantity of units sold-out. The supervisor is given basis output. The Mechanics is created to figure extra hour and so customary hour pay are going to be crucial.

I) Compensation:

Sales staff: wage + commission on sales

Supervisor: wage + work

Mechanics: wage + customary hour

Detailer: Wages

Office staff: wage

II) Yes, i'll provide them different incentives

Sales staff: Recognition and non-monetary incentives, ESOP

Supervisor: share, stock choices

Mechanics: Bonuses, Merit pay

Detailer: Bonuses

Office staff: Bonuses

III) because the government, my compensation package can include:

Net company profit

Stock choices

Bonus

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