7:06 LABOR ECONOMICS CASE.doc The Case Suzie was frustrated by John's (her boss') compensation policy for the leasing staff at a large apartment complex she managed. She though they were paid too...

Make a recommendation to John regarding Suzie's idea, giving a rationale that must include finance and human resource management concepts.

Extracted text: 7:06 LABOR ECONOMICS CASE.doc The Case Suzie was frustrated by John's (her boss') compensation policy for the leasing staff at a large apartment complex she managed. She though they were paid too little and felt that fairness dictated that they should receive significant raises, despite historical raises significantly higher than the average inflation rate (5% to 15% per year versus 2.5% inflation). Her rationale was that she wanted to keep good, honest people and that the company and apartment complex makes a bunch of money year in and year out. Periodic market surveys demonstrated that the total compensation package at Suzie's property was in the top half of all properties surveyed. The following table shows the general comparison. COMPONENT MARKET SUZIE'S PROPERTY $18 to $28.50 depending upon experience and tenure Up to 10% of gross pay based upon property, team, and individual performance. Base Pay $18 to $25.50 Merit pay 5% to 20% (of base pay) commissions for new leases and renewals individually |responsible for Apartment Discounts 10% to 50% of base wage if 25% to 35% of base wage if live on property live on property Benefits Company pays 0% to 50% health and retirement benefits a smaller contribution to |(less prevalent) Company pays 50% of health, dental, and no match for retirement. John's rationale was the property was a great place to work, with a family atmosphere. In addition, the property location and maintenance levels sell themselves. It's an easy sell. John's tendency has been to hire quality people with little industry specific experience and typically no more than a high school education. Thus, as an entry level opportunity, the job provides a base compensation package of 37,000. People, women mostly, tend to take this position and stay for quite a while. Within two to three years, with job specific training, they tend to improve their earnings to just over $44,000 annually. Then their pay tends to level off, growing only slightly faster than the cost of living. While John's policies have not created turnover, Suzie remains frustrated. She recently restructured the office, reducing staffing by .5 FTE. She wants to spread the savings to the remaining 2 full-time employees. She wants to train them in non-leasing related functions (like bookkeeping) and pay them up to $8,000 more each per year as a result of their expanded duties. ( Previous Next > 4 000 Dashboard Calendar To Do Notifications Inbox