Wrapit Up Case Study

http://www.lmca.net/hal_article2.pdf

Wrap

it up: a new compensation plan

Case question:3

consider the financial results achieved by the two pilot stores. Based on that alone would you say that the plan succeeded in both pilots? why or why not? does your opinion change if you incorporate the customer service scores?

The present pay package is as follows:

• Basic pay at par with industry.

• Variable pay too low in the industry and doesn’t have profit sharing model.

• A five band salary scale, revised once in a year.

• No stagnation increase post the final band.

Crafting of ShareIt:

• The performance metric was set to profits and not to Volumes.

• Appraisal also linked to profits, every quarter.

• Profit share was 35% [ managers ], 15% [ Asso.Managers ], 50% [ company].

• Employee can voice out there opinion/suggestion which would inturn result in a potential, allowing a higher and better service.

The Sojourn at CostaMesa:

• To manage costing by negotiating with the suppliers and working out with menus that will require lesser cost in inputs.

The Sojourn at SantaMonica:

• Publicity campaigns like RepeateIt, and book launch with Chef Signing books were devised.

• Marketing campaigns like offering discount coupons, setting new menus, hosting twitter and facebook pages.

Outcomes:

Sno SantaMonica CostaMeca

1 Revenue Increased by 11% Decreased by 15%

2 Profitability Increased by 25% Increased by 21%

3 Survey with customers mixed Poor feedback

4 Work timing Working more during the ShareIT Working more during the ShareIT

The pilot project may fail for reasons:

• The plan is simple, yet it does not take into account the business model, stage of growth, population to demographics and the like.

• The plan sounds like a growth to labour contract and not like a long term strategy in marketing.

• Staff challenges, anticipating the path for the future and tracking mechanism is a void and not clearly noted for.

How to...