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You have been asked by the CEO of a large Edmonton-based engineering company to explore the use of variable pay for its professional employees (i.e., engineers, technologists, accountants, field managers, project managers). The company has about 3000 employees, mostly in the professional category. The organization already has a reputation for competitive pay practices, but it would like to ensure that it remains an "employer of choice" for its long term employees, as well as for its new hires.
Variable pay has many proponents who promote the connection between good performance and higher compensation. Yet, variable pay also has many detractors, who suggest the disadvantages of this form of compensation can outweigh any benefits, and should therefore be avoided. What do you think? Should this engineering company introduce variable pay, or not? If you recommend the use of variable pay, which form(s) of variable pay would you choose and why? If you recommend against the use of variable pay, what would you suggest the organization do instead to enhance its compensation practices?
The Chris Beehner Company manufactures two lines of designer yard gates, called model A and model B.- Find by graphical linear programming the best production mix of yard gates.
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