Compensation Managing Compensation Costs
Order Description
Compose a 2-3 page paper that addresses the exercise posed in “Still Your Turn (see attachment) – Managing Compensation Costs, Headcount, and
Participation/Communication Issue” beginning on page 669 of the Mikovich text. APA formatting standards must be followed. A minimum of 3 scholarly resources from
outside of class need to be used.
Answer questions below from the article in the attachment file.
What is the difference between these two sets of companies?
Is it simply that one set of companies cares more about its employees that the other set of companies care about its employees?
Or , is it also the case that Southwest, Nucar, and Lincoln Electric have set up their compensation strategies in a way that makes them more able (than Cisco, HP,
American, and GM) to cut labor costs when times are tough? (For more background, go to google.com or another search engine and conduct separate search for each company
using its name the term “layoff.”)
What about protecting investment in employees and employee relations?

What can an employer do to make labor costs flexible so that profits do not take as much of a beating during difficult economic times and so that fewer employees need
to be laid off?
If you were in charge of designing a compensation system for a company that is fairly new but is now reaching a stage and size where it needs a formal compensation
system, how would you design the compensation system to have labor cost flexibility?
To what degree would have others at the company participate in the design of the new compensation system?
Who would participate?
Would you follow a policy of pay openness in communicating your compensation system?
Provide rational for your decisions.
Case Study pulled from:Milkvich, G., Newman, J., & Gerhart, B. (2014). Compensation. Eleventh Edition. McGraw-Hill Irwin.