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Good Eats Company: Competitive base pay

As VP of HR at the Good Eats Company (a distribution center for a major food market - the owners are very wealthy!), you are experiencing turnover problems with the employees who select items to be packed and shipped to different customers (food markets). The plant manager has asked you to take the lead in fixing the problem. Your budget allows you to engage some outside assistance, and you have asked the pre-imminent firm HR consulting firm of Marsh & Marsh LLP to meet with you and study the problem.

While your primary emphasis might be on having a competitive base pay, you need to decide if there is anything you can do in the incentive department. Before you can make these decisions, what information would you like about

(a) pay (base + incentive) at major competitors,
(b) the nature of the turnover, and
(c) next year's labor budget.

Explain your answers.

Solution Preview

Reducing turnover is of particular concern as training a new employee is a costly event. As the problem states, we will need more information before meeting with the HR consulting firm if we are to arrive at a suitable solution.

a) To begin, we would need a little info about our company. I would need to know the average base pay for the relevant position (packer/shipper), I would want to know the base pay range (including starting pay and raise opportunities and intervals), and I would want to know the incentives available to these employees including those available to new employees as well as those who have been employed at the firm for some time (in other words, do incentives increase with tenure?).

To compare, I would need the same information outlined above for our major competitors. Local competitors would be of the most importance, but we could adjust for geographic pay differences if necessary for those firms located in other ...

Solution Summary

The competitive base pay for Good Easts Company is examined.