Course text book is: Fundamentals of Human Resource Management by Robert N. Lussier; John R. Hendon
Read Case 11.1 on pages 305-306. Briefly summarize the facts. Analyze the facts provided, and then answer the questions at the end of the case (1-8) and support your reasoning using themes from the course.
Questions
1.What is the definition of an incentive pay system? Given this definition, does Best Buy have a pay for performance system?
2.Why would any firm (including Best Buy) use an “incentive-like” pay system?
3.Of the two basic choices in incentive pay, which one(s) does Best Buy appear to utilize in their compensation plans and “tracking systems”?
4.The veteran employee claims that by using their “tracking system,” Best Buy has created all of the problems of a commission system. What are the advantages and disadvantages of this system in general and more specifically for Best Buy?
5.The veteran employee’s perception was that Best Buy’s metric system, which focused on individual employees’ behaviors, decreased their job performance. What would be the pros and cons of Best Buy using a group incentive system?
6..Best Buy seems to use bonuses and commissions as part of their pay system. What are the effective and ineffective uses of each system?
7.What group incentive do you think might work best for Best Buy?
8.In light of Best Buy’s code of ethics and the opinions reported in this case, do you believe that it is ethical for sales associates to tell customers that they are simply paid a flat rate?
