Instructor Question:
Can you think of any companies that follow a lag and/or lead policy? Why do they believe it pays to pay differently? Can you think of any companies that follow performance driven and/or work/life balance policies?
Think about the characteristics of each policy to determine which policy a company follows.
Examples
a. Costco follows the lead policy as they currently pay over the market rate compared to frontline workers of major wholesale retailers. Costco believes it pays to pay differently because they understand that people do better work when they feel fairly compensated. Instead of paying workers the lowest amount possible, Costco chooses to pay higher wages and offer good benefits. Employees feel appreciated and less stressed about paying their bills or finding another job in an economy where frontline workers work multiple jobs to make ends meet. Costco is able to boast of retaining quality employees and developing talent.
Dollar tree follows the lag policy with the goal to keep operational prices low. As the name suggests, the organization is able to keep prices low and affordable for communities in rural areas with the trade off with disgruntled employees and poor working conditions. A 2020 report found that dollar tree employees made about $9.68 per hour.
This discussion points back to the first chapter regarding compensation and strategy. To maintain low prices, the organization follows a business strategy which is aimed at reduction of operational cost but, i will add that dollar tree should review other ways to reward employees as disgruntled employees could have the entire organization shut down as customers will move to where they will be treated better.
Reference:
Requirements: Paragraph
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