Wrap It Up

Developing a new Compensation

Plan

Introduction
Problem
Statement

Prop
ShareIt
osed
Solut
ion

Background
Shawn Jackson and Simon Sethi
Northern California, 2002
Fresh, healthy, locally sourced ingredients
Consumer preference of quick meal alternatives
30 restaurants by 2011
Focus on freshness and special diets
All stores company-owned
Passion for delivering fresh quality food

Concerns
Tight relationships with long term employees
Centralized social media activities
Disorganized recruiting
High turnover
Difficult to attract and retain top talent
Lack of motivation among managers

Frustration among employees at all levels

Declining customer satisfaction
No change in menu
Regular customers not given any discounts
Manager turnover

Inconsistency in menu and service due to local

sourcing

Compensation
It is what employee receive in exchange for their
contribution to the organisation.
Nature of Compensation

a. Base Pay
b. Variable Pay
c. Benefits
Dimensions of Equity in Compensation Planning

a. Internal Equity
b. External Equity
c. Individual Equity

Objective of Compensation Planning

Attract Talent
Retain Talent
Ensure Equity
New and Desired Behaviour
Control Cost
Comply with legal rules
Ease of operation

ShareIt
For Individual store profits
Motivation for Managers
Store Selection for Pilot Program

Comparative Analysis
Store Name

Santa Monica

Costa Mesa

Location

New City
Centre

Shopping Mall

Opened in
2004

Opened in
2007

Experience

Employee Enfranchisement
Achieved through an integration of

empowerment with methods of pay for

performance .
Participatory management : Encourage

employee to participate in organizational

decision making.
Employees are encouraged to voice their

opinions about their working conditions.

Such combinations have the potential for

ShareIt Insights
Existing Pay Structure
Basic Pay: At Par with the
Industry
Variable: Differs w.r.t.
amount and qualifiers

ShareIt Structure
Profit = Performance
Metric
Quarterly Appraisal
Linked to Profits not
Revenue
5 Bands : Revised on
Store Manager : 35%
yearly basis
Profit
No pay difference b/w top Associate Manager : 15%
and low range of band
Profit
No incentive to improve
WrapItUp :50% Profit
after band is achieved
Benefits were Paid one
month after quarter end.

WrapItUp Manager Compensation vs Industry Benchmark

Santa Monica Strategy

Setup a Facebook Page and Twitter account.
New Menu was designed RepeatIt
Offered discount coupons
Chef appearances and book Signing

Costa Mesa Strategy

Focused on Cost Reduction
Renegotiated terms with suppliers
Substituted with less expensive ingredients

Income Statement of Costa Mesa Store before ShareIt

Income Statement of Costa Mesa Store during ShareIt

Income Statement of Santa Monica Store before ShareIt

Income Statement of Santa Monica Store during ShareIt

Customer Surveys Report

Outcomes Of Steps Taken

Parameter
s
Revenues
Profitabilit
y
Working
hours
Customer
surveys

Santa Monica

Costa Mesa

Increased by
10.2%
Increased by
24.5%
Increased from
50hours to 70
hours a week
Mixed results

Decreased by
1.45%
Increased by
21.8%
Downgraded
customer
satisfaction

Solutions
Based on these points we observe that the result of

the programme showed improvement in profitability.

Stores have been able to increase their profits and
have been able to increase the incentives for
managers.
However we opine that the cost containment

approach adopted by the manager at Costa Mesa

would not sustain in long run and would lead to
customer dissatisfaction.
The employee turnover is bound to increase in this

scenario. We recommend the customer centric

approach adopted by Whitfield at Santa Monica.

 The promotions and new menu items

introduced would add value to customer

satisfaction.
The idea of taking orders through text

messages would further help the store to

retain its customers.
Better customer relationship program should

be introduced. There is no such mention in the

case that how the employees should be
motivated other than giving improved

 There should be some metrics to measure

the employee satisfaction level also. This can

lead to have better satisfied pool of
employees which in turn would yield high
profitability with improved customer
satisfaction.
Reyes should roll out the programme in some

other stores to evaluate how other store

managers would react to the combination of
freedom and pressure that ShareIt program
offers.

Thank You