Reference no: EM133523937

Assignment:

Please answer 5 questions below using the case study.

The Fit Stop Ltd. is a newer firm having opened its doors just over 3 years ago (prior to COVID-19). Its business objective is to sell all types of training, fitness, conditioning, and exercise equipment to the general public. The Fit Stop specializes in this equipment and provides customers with personalized advice geared to a customer's specific training or conditioning needs (e.g., training for a particular sport, rehabilitation from injuries, strengthening of back muscles to deal with back pain, general conditioning and fitness), whether the customer is eight or 80 years of age.

In order to provide high-quality advice, each store employs a physiotherapist (to provide advice on problems such as injuries or chronic back pain) and a person with a bachelor's degree in kinesiology (to provide advice on training for various sports or other physical activities). A staff member will even sit down with customers and develop a personalized training or conditioning program that meets their own specific objectives and needs, at no cost to the customer.

The remainder of the staff in the store consists of a manager, with a Bachelor of Commerce degree, and sales staff, who have at least high school diplomas. Due to the long hours, it is expected that between 8 and 12 salespeople are needed for each store. Because the stores are located in shopping malls, they operate on a seven-day-a-week basis, open 9:00-9:00 weekdays, 9:00-6:00 Saturdays, and noon to 6:00 on Sundays.

Aside from personally helping customers, the roles of the physiotherapist and kinesiologist are to train other employees in how each type of equipment can be used for various conditioning and rehabilitation purposes. Initially, sales staff are given general training, but as time goes by, each salesperson will be expected to learn in depth about all the different pieces of equipment, to help customers diagnose their needs accurately, and to be able to explain proper use of the equipment. Because of the high level of training required, all employees are full-time.

The founder of the business is Susan Superfit, who has undergraduate degrees in kinesiology and commerce from the University of Saskatchewan. While at university, she participated in many sports (and suffered many injuries due to her all-out style of play). She came up with the idea for this business while laid up with one of her injuries. While there were businesses that sold fitness and conditioning equipment, she often found that the people selling it had very limited knowledge and often gave poor advice on what to buy and how to use it.

She secured funding from private investors and from Growthworks, a large Canadian labour-sponsored investment fund. In order to get volume discounts on the equipment she will be purchases and to beat competitors into the market, she started off quite large, with stores in major cities in Ontario and the four western provinces, before expanding to Quebec and the Atlantic provinces. She knew that this might be a risky strategy and that cost control will be essential to keep the business going long enough to become well known and develop a stable clientele. She did not expect the business to make a profit for at least one year, or maybe even two.

Her main competitors are sporting goods megastores and department and discount stores, each of which sells some of the same equipment. Some of these outlets are able to price their equipment lower than The Fit Stop will be able to, but none have the range of equipment that The Fit Stop has, and none provide the personalized services that The Fit Stop does.

Susan believes that the key to her business success is to have highly motivated and knowledgeable employees who have a strong concern for their customers and who are able to work as a team with the other employees to provide the best possible customer service. Since no two customers are exactly alike, employees need to be innovative in developing solutions that fit their needs. It is also crucial to keep up with the latest fitness and training trends, as knowledge about fitness is continually increasing, along with new and different types of specialized equipment. A key aspect of company strategy is to be the most up-to-date and advanced supplier of new products and techniques.

Although Susan has given a lot of thought to her business, one thing she hasn't really given much thought to is how to compensate her employees. Since she doesn't really know much about compensation, she has tended to feel that the safest thing is just to do what her competitors are doing.

1) What is the managerial style currently in place?

2) I have decided that the organization is well-suited for an organizational performance pay plan. Which plan would work best? Design and describe how I would deal with some of the design issues.

3) Identify the benefits system (including specific benefits) that would make the most sense for this firm. Including all elements of indirect pay that are relevant.

4) Develop a plan for communicating and implementing your compensation strategy

5) How might COVID-19 impact your compensation strategy?