If, for example, an employee is working in a high volume, low margin Department, they still have a similar chance at performance goals as someone working in a low volume, high margin (appliances, for instance) area of the store. Linking compensation to market pricing evens the playing field for employees.
Does using a job evaluation system for jobs that do not have market pricing data affect the relationship of these jobs to jobs that do have market pricing data? If so, explain how.
Certainly. Components of all job tasks surround performance, but if Sears is going to avoid compression in the workforce and maintain a rewards system, they must find a way to even out compensation structures. For jobs that do not have market pricing, the company must either guess or estimate compensation data, which is likely to be more qualitative than quantitative. Second, it is more difficult for the employee to understand value-based sales volume without a way to price goods to market.
What should Sears do if the market pricing data for a specific job goes down from the previous year? Explain your answer.
Using a compensation system that takes a base wage and adds a commission structure based on market pricing and turn data is a system that must be fluid and constantly evolving.
The price of goods is rarely static, and so many factors come into play that result in the necessity for flexibility with the structure. On an annual basis, different items will likely have different structures, but it would be rare if the entire department (e.g. The job) was reduced that dramatically. One way to handle a situation if that were the case would be to cross-train and allow high-performing employees the chance to transfer to departments that could utilize their expertise. If an entire job template decreases based on market pricing then it is likely something happened in the industry or to the market on those items, that is not particularly price elastic. One might need to adjust volume goals, or expand lines within that department as well. If the compensation structure is placed on an understandable matrix, though, it will be imperative that motivational tools (training, bonuses, etc.) be used to retain employees within departments with this situation.
REFERENCES and WORKS CONSULTED
Madigan, C. And A. Martinez. (2001). A Hard Road to the Softer Side: Lessons From
The Transformation of Sears. Crown Press.
Meyer, M. (2002). Rethinking Performance Measurement: Beyond the Balanced
Scorecard. Cambridge University Press.
“Sears Archives,” 2010. Searsarchives.com. Cited in:.