Case Solution for WrapItUp: Developing a New Compensation Plan

Complete Case details are given below :
Case Name :      WrapItUp: Developing a New Compensation Plan
Authors :           W. Earl Sasser Jr., Rachel Shelton
Source :             HBS Brief Cases
Case ID :            4362
Discipline :        Service Management
Case Length :    11 pages
Solution Sample availability : YES
Plagiarism : NO (100% Original work)
Description for case is given below :
A restaurant chain based in California offers made-to-order sandwich wraps using fresh, healthy ingredients. The founders of the company take a very active role in day-to-day business and tightly control every aspect of the restaurant operation from hiring store managers to planning the menu. Management is concerned that employee turnover is high, customer satisfaction is decreasing, and revenue growth is flat. The newly hired human resources leader believes addressing employee turnover can help solve the other problems. She develops a profit-sharing program as a pilot at two restaurants. The managers in the pilot program have their compensation tied directly to restaurant profits. The program also allows managers to customize menus, work with local suppliers, and try different promotion ideas. After six months, profits at the pilot locations improve while customer reviews are mixed. The HR manager must review the complete results and decide whether to roll out the pilot program to more locations, modify the program, or abandon it altogether. Students consider the operational challenges of running a service business and the issues related to compensation, change management, and employee autonomy.
 
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