Evaluate a compensation strategy, Strategic Management


The Fit Shop      

The Fit Shop Ltd. is a brand new firm that will open its doors exactly four months from today.  Its business objective is to sell all types of training, fitness, conditioning, and exercise equipment to the general public.  The Fit Stop plans to specialize in this equipment and to provide customers with personalized advice geared to a customer's specific training or conditioning needs  (e.g. training for a particular sport, rehabilitation from injuries, strengthening of specific muscle groups to deal with back pain, general conditioning and fitness), regardless of the age of the customer.

In order to provide high quality advice, each store will employ a physiotherapist (to provide advice on problems such as injuries or chronic back pain) and a person with a bachelor's degree in kinesiology (to provide advice on training for various sports or other physical activities).  In fact, a staff member will even sit down with customers and develop a personalized training or conditioning program that meets their own specific objectives and needs at no cost to the customer upon purchase of equipment.

The remainder of the staff in the store will consist of a manager, with a Bachelor of Commerce degree, and sales staff, who will have at least a high school diploma.  Due to the long opening hours, it is expected that between 8 and 12 salespeople will be needed for each store.  Because the stores are located in shopping malls, they will operate on a seven-day-a-week basis, open 9:00 to 9:00 weekdays, 9:00 to 6 Saturdays, and noon to 6:00 on Sundays.

Aside, from personally helping customers, the roles of the physiotherapist and kinesiologist will be to train other employees in how each type of equipment can be used for various conditioning and rehabilitation purposes.  Initially, sales staff will be given general training, but as time goes by, each salesperson will be expected to learn in depth about all the different pieces of equipment, to help customers diagnose their needs accurately, and to be able to explain proper usages of the equipment.  Because of the high level of training required virtually all employees will be full time.  The exception will be students who are enrolled in physiotherapy or kinesiology, will be employed on a part time basis. 

The founder of the business is Susan Superfit, who has an undergraduate degree in both kinesiology and commerce from the University of Saskatchewan.  While at university, she participated in numerous sports (and suffered frequent injuries due to her all-out style of play).  She came up with the idea for this business while laid up with one of her injuries.  While there were businesses that sold fitness and conditioning equipment, she often found that the people selling them had very limited knowledge about the products and often gave poor advice on what to buy and how to use it. 

She has secured funding from private investors and venture capitalist.  In order to get volume discounts on the equipment that she will be purchasing and to beat competitors in the marketplace, she wants to start with stores in major cities in Ontario and the four western provinces before expanding into Quebec and the Atlantic provinces.  She knows that this is a risky strategy, and that cost control will be essential to keep the business going long enough to become well known and develop a stable clientele.  Susan does not expect the business to make a profit for a least a few years. 

Her main competition will be sporting goods mega-stores and department and discount stores, each of which sells some of the same equipment.  Some of these outlets will be able to price their equipment lower than The Fit Shop but none will have their range of equipment and none will provide the personalized service of her firm.

Susan believes that the key to her business success will be highly motivated and knowledgeable employees who have a strong concern for their customers and are able to work as a team with other employees to provide the best possible customer service.  Since no two customers are exactly alike, employees will have to be innovative in developing solutions that fit their needs.  It will also be crucial to keep up with the latest fitness and training trends, as knowledge about fitness is continually evolving along with new and different types of specialized equipment.  A key aspect of the company strategy is to be the most up-to-date and advanced supplier of new products and techniques.

Although Susan has given a lot of thought to her business, one thing she has not much consideration is how to remunerate her employees.  Since she does not really know much about compensation, she tends to feel that the safest thing would be to follow her competitors' practices.


After reading the case , Make sure each questions are answered with its corresponding  question , advice Susan according to each question in details. Some questions are asked first person because your trying to ask susan question and explaining them to her so she will be headed in the right direction.

Question: What group performance pay (gain-sharing, goal-sharing or other group bonus plans ) are the best choice for the fit shop , advice Susan in details with examples according to the case scenario.

Question: What sort of organization performance plans (profit sharing, employee stock plans, other organization performance plans)  is the best choice for Susans firm explain in details.(according to the case , advise her )

Question: Describe the issues involved in compensating contingent workers, executives and international employees.

Question: Do you know how to evaluate a compensation strategy prior to implementation? Explain that according to the case.

Question: do you know the constiant that limit the design of a compensation strategy?


Posted Date: 3/6/2013 2:54:22 AM | Location : United States

Related Discussions:- Evaluate a compensation strategy, Assignment Help, Ask Question on Evaluate a compensation strategy, Get Answer, Expert's Help, Evaluate a compensation strategy Discussions

Write discussion on Evaluate a compensation strategy
Your posts are moderated
Related Questions
Question: (a) What do you meant by the following terms: • Information System (IS) strategy, • Information Technology (IT) strategy? (b) Explain five approaches to IT st

Jidoka - Quality At Source Jidoka was first introduced by Dr Taichi Ohno into the Toyota Motor Company in the early 1960s. In the process of producing an efficient material fl

Q. Illustration of extrinsic reward? Monetary reward is an illustration of extrinsic reward and considered as the most important of all 'hygiene factors' according to Frederick

Four perspectives of the balanced scorecard Customer perspective e.g. what should we do right for our customers and what do they value? Internal perspective e.g. what

Q. Explain about Opportunity cost pricing? Opportunity cost pricing is considered most mathematically correct way of viewing transfer pricing. Reason is that it looks at transf

Q. Explain about Value based management? Value based management (VBM) is an approach which focuses on strategies and actions to create more value for shareholders.  Value being

Q. What do you mean by Dual pricing? Dual transfer pricing means setting one transfer price for the internal seller and another transfer price for the internal buyer.  The basi

Question Sarah and John are both working for a software development company. The manager of the new product division was originally the leader of the project team for whi

Merits of economic value added (EVA): -  Cash not accounting based measure therefore less distorted for performance measurement. -  Consistent or goal congruence with profit

Your assignment is to write a memo or email based on the case below.Dropthe completed and final assignment in the assignment dropbox on Slate and bring a hard copy to next week's c