Page 708 - Business Principles and Management

Human Resources

Management Event

You have 30 minutes to prepare a speech for the employees of a
successful clothing store called Latest Edition. Your speech will be
seven minutes long, and the audience has three minutes to ask questions.
Salary and benefits are very important to Latest Edition’s employees.
Full-time employees’ salaries are based totally on commission. They earn
14 percent of all sales during the year. Latest Edition sells expensive cloth-
ing and it is not unusual for the top sales associates to sell $10,000 worth
of merchandise on a weekend shift during the busy holiday season. On a
summer weekday, however, sales can be slow to nonexistent. Full-time em-
ployees receive four weeks of paid vacation and 80 percent of their health
insurance. Part-time employees earn $8.50 an hour and no commission or
fringe benefits.
You must report the latest pay and benefits package for part-time and
full-time employees. Latest Edition must watch its total budget carefully to
compete with national department stores like Macy’s and Nordstrom. Full-
time employees will now be paid a base salary of $20,000 and 10 percent
commission on all sales. They will still have four weeks of paid vacation,
and the company will cover 90 percent of their health insurance. Part-time
employees will earn $7.00 per hour plus 8 percent commission on sales,
with no benefits. All employees will receive a 40 percent discount on cloth-
ing they purchase for themselves. You must give this information a positive
twist, because the level of concern among employees has been raised with
the changes.

PERFORMANCE INDICATORS EVALUATED
• Demonstrate knowledge of human resources management and
management concepts.
• Apply critical-thinking skills to interpret personnel policies.
• Demonstrate effective oral communication skills.
• Demonstrate effective persuasive and informative communication
and presentation skills.
• Discuss compensation, benefits, and incentive programs.
For more detailed information about performance indicators, go to
the BPA Web site.

THINK CRITICALLY

1. Why are compensation and benefits difficult topics to present to
employees?
2. Name advantages and disadvantages of paying commission on sales.
3. How do you think the change of compensation for part-time
employees will affect their sales performance?

http://www.bpa.org/

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