Base Pay, Pay for Performance, and Benefits

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Student: I am presenting assistance below each case question. References have been provided wherever required and used for further research on this topic. The executive summary of the case is also given below.

Executive Summary:

Hotel Paris International is a rapidly growing hotel chain with headquarters in Paris and presence in several cities across the globe. The company is facing growth related challenges related to managing the customer service levels in the organization. The company strongly believes that world class customer service will be the key to differentiate the company's service against other hotel chains and will be a critical success factor for expanding business in other markets.

One of the most important factors contributing to superior customer service and distinct experience for guests by motivated and highly performing employees is compensation strategy of the organization. The company's current compensation strategy is nowhere close to best practices pursued by high performing service businesses and leaders in the hotel industry and other service businesses.

The company is planning to restructure its current remuneration and salary structure and introduce a pay for performance plan in the organization to motivate the workers, enhance their performance and tie their remuneration with the performance they deliver in order to align the broader corporate goals and objectives and mission towards achieving superior customer service to the compensation strategy of the organization. Pay for performance strategy, along with a renewed incentives, recognition and benefits approach will allow the organization to enhance the motivation and performance level of employees, retain and attract the best talent in the industry and pave the way to achieve world class customer service in the organization.

What type of base pay plan should Hotel Paris implement? Job based or person based? It can be different for different levels within the organization. Support your decision by highlighting the benefits of the plan you choose and disadvantages to the plan you don't.

The base pay plan should be person based in Hotel Paris. In other words, the worker's base salary should be based on the skills, knowledge and experience he possesses. This would help the company in directing the employee towards the desired behavior. If a highly skilled and experienced employee will not be paid for his skills, such as in a job based pay plan, he will not be motivated to display extraordinary performance as he knows that his compensation is tied to his job position.

In determining internal equity, what are some of the factors that should be considered when conducting job evaluation. That is, what would you weight more heavily if you were charged with developing a job evaluation program? How would you go about ranking positions within the hotel, from housecleaning and front desk up to general manager?

The different positions in the organization will be ranked on the basis of several factors, such as functions required to perform the job and the relevant skills, experience and knowledge/education required for the position, importance of the position to the overall strategic plan, goals and objectives of the organization or strategic importance of the position, etc. Factors such as skills, knowledge and experience required for each job will be given more weight. Similarly, given the strategic importance of effective compensation for achieving the desired goals, the strategic importance of each position will also be taken into account in a major way while deciding on the ranking of different job positions. The decision making level, level of authority and responsibility, number of people being managed by the personnel in the position, etc. are some of the other factors that are used in the ...