Presented By :Monica Singh - 13810052

Amar Keshari - 13810008

Rakesh Ranjan - 13810066

Shivani Singh - 13810072

Wrap It Up

Developing a new Compensation Plan

Introduction

Problem

Statement

ShareIt

Proposed

Solution

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

Industry

Profit = Performance Metric

Variable: Differs w.r.t. amount

and qualifiers

Quarterly Appraisal

Linked to Profits not

Revenue

5 Bands : Revised on yearly

basis

Store Manager : 35% Profit

No pay difference b/w top

and low range of band

Associate Manager : 15%

Profit

No incentive to improve

after band is achieved

WrapItUp :50% Profit

Benefits were Paid one

month after quarter end.

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

hours

Increased from

50hours to 70

hours a week

-

Customer

surveys

Mixed results Downgraded

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

approach adopted by Whitfield at Santa Monica.

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

the store

Thank You