Compensation Structure
The compensation structure should reflect the company business plan and goals by placing a priority on customer service, repeat business, new client referrals, and safety. What the company can afford to pay and implementing programs to reward performance that align employee compensation with the success of the company should be the basis of the compensation structure (Cascio, 2013, p. 419). The compensation structure should keep fixed labor costs low and place emphasis on benefits, incentives, and merit based-pay. The correlation between employee compensation and the success of the company ensures employees stake in repeat business, customer service, and generating referrals.
Position in the Market
The company’s ability to pay is less than that of its competitors and will remain constrained until the company can establish a reputation and gain a share of the market (Cascio, 2013, p. 420), so the company should position itself carefully in the market. LL should allocate 25% of its budget for salary and benefits and use performance incentives, merit-based pay to keep fixed labor costs low. LL should pay employees $9.33 per hour, which is $19,406 per year and is $2 per hour less than industry average for Austin, Texas. The company should pay management a salary 5% higher than employees to maintain the balance of compensation rates (Cascio, 2013, pp. 423-424). The company should use additional benefits, performance-based incentives, and merit pay to attract, retain, and motivate employees who share the company’s vision and goals (Cascio, 2013, p. 423).
About compensation that the United States Department of Labor, (2013), minimum wage rate in Texas is $7.25 per hour. This is absolute minimum wage. This rate may not be attractive to retain and recruit licensed drivers; however, it is used to clerical or cleaning staff, according to Bureau of Labor and Statistics (2013). National mean of hourly pay rate in limousine industry is $13.30,...