Reference no: EM133631199

Carter Cleaning Centres The New Pay Plan Carter Cleaning Centres does not have a formal wage structure, nor does it use rate ranges or compens- able factors. Wage rates are based mostly on those prevailing in the surrounding community and are tempered with an attempt on the part of Jack Carter to maintain some semblance of equity between what workers with different re- sponsibilities in the stores are paid. Jack does not make any formal sur- veys when determining what his company should pay. He scans the want ads almost every day and con- ducts informal surveys among his friends in the local chapter of the laundry and cleaners trade associa- tion. While Jack has taken a "seat- of-the-pants" approach to paying employees, his salary schedule has been guided by several basic pay policies. Although many of his col- leagues adhere to a policy of paying minimum rates, Jack has always fol- lowed a policy of paying his em- ployees about 10 percent above what he feels are the prevailing rates, a policy that he believes re- dluces turnover while fostering em- ployee loyalty. Of greater concern to Jennifer is her father's informal policy of paying men about 20 percent more than women for the same job. When confronted about this practice, Jennifer's father explains, "Men are stronger and can work harder for longer hours, and besides, they all have families to support.

Questions

1. Is the company at the point where it should be setting up a formal salary structure based on a complete job evaluation? Why?

2. Is Jack Carter's policy of paying 10 percent more than the prevailing rates a sound approach? How might wage rates be determined?

3. Do you feel that Jack Carter's gender wage differ- ential is justified? Is it a wise practice in today's workplace?

4. What suggestions would you make to Jennifer to im- prove her company's cur- rent pay plan?