Question

QUESTION 3 Marketing Executives 1 and 2 Progress Check 2015 2018 Employee 1 Employee 2 2015 2016 2017 2018 2015 2016 2017 2018 | Performance (%) 70 85 80 85 75 75 75 Potential 70 75 70 90 90 65 65 85 Absenteeism (%) | 10 18 23 Annual Sala 33,600 35,280 36,690 38,525 33,600 35,280 36,690 38,525 What was the average performance growth rate for Marketing Executives 1 and 2 from 2017 to 2018? 5.00% 5.29% 7.16% 6.46% 6.83% If the company is trying to boost all employees' potential to at least 85%, what is the average percentage increase in potential for Marketing Executives 1 and 2? 5.00% 5.33% 8.33% 10.00% 13.33% Assuming that performance and potential are the only two equally important determinants of employee value, what was the difference in value between Employee 1 and Employee 2 on average across the years (i.e., 2015 to 2018)? 3.75% 5.63% 11 .25% 15.00% 77. 19% If there were to be a salary revision in 2019 solely based on employees' average work attendance rate in the three years prior to that, and Employee 2 was expected to have a salary of $39,125 in 2019, what would Employee 1's 2019 salary be (round up to nearest dollar)? $19,562 $28,725 $34,168 $39,196 $41,919

Answer 1

Average formula = n1+n2...nn divided by n

Part 1: Performance growth rate 2017-18

Employee 1 = (85-80)/80 = 6.25%

Employee 2 = (80-75)/75 = 6.67%

Average = 6.25% + 6.667% / 2 = 6.46% = answer

Part 2: Average increase in potential

	Employee 1		Employee 2
	Potential %	Diff (85-potential%)	Potential %	Diff (85-potential%)
2015	65	20	70	15
2016	65	20	90	0
2017	70	15	85	0
2018	75	10	90	0
AVERAGE		16.25		3.75
Average of 16.25 & 3.75			answer	10

For employee 2, In year 2016-2018, the potential is already 85% or more, hence we have taken the target increase to be zero.

Part (c)

	Employee 1		Employee 2
	Performance %	Potential %	Performance %	Potential %	Diff in performance % (eg. 2015: 70-75)	Diff in potential % (eg. 2015: 65-70)
2015	70	65	75	70	-5	-5
2016	85	65	75	90	10	-25
2017	80	70	75	85	5	-15
2018	85	75	80	90	5	-15
	Average				3.75	-15

part (d)

	Employee 1	Employee 2
	Absenteeism %	Absenteeism %
2015	10	5
2016	7	18
2017	6	4
2018	2	23
Average absenteeism	6.25	12.5
Average attendance (100-average absenteeism)	93.75	87.5
Average salary in 2019 as per average attendance (44714.29*93.75%)	41,919.64	39,125
Salary for 100% attendance (39125/87.5%)		44,714.29

The average attendance of employee 2 is 87.5%

He gets an expected salary of 39,125 for 87.5%

If he had 100% attendance, he would get = 39,125/87.5% = 44,714.29

Now, employee 1 has 93.75% expected attendance.

In the Question it is clear that the salary structure for both employees is same over the years.

Hence, employee 1 will get a salary of 44,714.29*93.75% = 41919.64