Why do you think the compensation plansdiffer at the two firms? In particular, why doyou think Kaufmann’s pays commissions tosalespeople, while Parkleigh does not?
Why do you think the compensation plansdiffer at the two firms? In particular, why doyou think Kaufmann’s pays commissions tosalespeople, while Parkleigh does not?
Attracting and Retaining Qualified Employees463ANALYZING MANAGERIAL DECISIONS:Structuring Compensation PlansParkleigh Pharmacy is a small department store inRochester, NY, specializing in upscale, expensivepersonal accessories (e.g., sunglasses, beauty aids,leather goods) and home decorations (e.g., crystal,china, table lamps). Kaufmann’s is a large depart-ment store chain, based in Pennsylvania, with sev-eral stores in the Rochester area. Kaufmann’s car-ries a broader range of products and caters more tomiddle-income consumers.Salespeople at Parkleigh are paid a straighthourly wage (i.e., no sales commissions). Inaddition, they are entitled to a 30 percent discounton anything they buy at the store. By contrast,salespeople at Kaufmann’s are paid an hourly wage(lower than the hourly wage paid at Parkleigh) plusa commission of 5 percent on sales they make.They receive no discount on products they buy atKaufmann’s.
1. Why do you think the compensation plansdiffer at the two firms? In particular, why doyou think Kaufmann’s pays commissions tosalespeople, while Parkleigh does not? Whydoes Parkleigh offer employees discounts onpurchases, while Kaufmann’s does not?
2. Assume, for the moment, that neither storepays sales commissions. Parkleigh offers anhourly wage plus the employee discount. Kaufmann’s offers only an hourly wage. Doyou expect Kaufmann’s hourly wage to behigher or lower than Parkleigh’s? Why?”
Answer preview for the “Why do you think the compensation plansdiffer at the two firms? In particular, why doyou think Kaufmann’s pays commissions tosalespeople, while Parkleigh does not?” essay…………………….
apa 334 words