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Compensation and termination (Lead) Read the following scenario and then answer the questions that follow

Management

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Compensation and termination (Lead)

Read the following scenario and then answer the questions that follow.

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MANAGEMENT AT WORK

Denise Owens, the owner and CEO of Extreme Routes, an indoor rock-climbing gym, needed to clear her head. She wanted to do what she did best—climb a really difficult route, at least a 5.11 on the Yosemite Decimal System, and preferably with a difficulty suffix of c or d.

“Kitty, will you set up a new route for me? And make it hard.”

“Sure thing, boss. Is 5.12d okay?” Kitty, the route setter and instruction manager, had been at Extreme Routes for seven years and was one of Denise’s closest friends.

“Perfect!”

Knowing a treat would be waiting for her that afternoon, Denise turned back to the spreadsheet in front of her. What was she going to do about these expenses? She had good staff, and she wanted to keep them, but she wasn’t sure she was spending her budget for salaries and benefits most effectively.

Denise had a basic compensation plan in place. Route setters were paid the most, because without new routes, the gym’s clients wouldn’t keep returning. Climbing instructors had the next highest take-home pay, and front desk staff were paid the least. Everyone who worked for Denise had medical, dental, vision, and life insurance. During the last staff meeting, both Kitty and Misha, the front desk manager, mentioned that some of the employees weren’t working as hard as they could and that there wasn’t much teamwork among the staff.

If Denise decides to pay above market wages, she will find that she:

Loses employees to tumover

Attracts and keeps better employees

Decreases the profitability of the gym

Increases the gym's overall costs

After expenses. Denise cleared $500,000 last year. She is thinking about giving some of this money to her employees in what is known as plan

Last month, Denise lost two of her best employees. This turnover is for the gym. Denise should consider implementing plan, which is good for dealing with all types of turnover