During her first year at university, Amelia Santos became quickly aware that there were not many healthy food and drinks on her campus. After taking a few business courses, she learned how to start a business and manage employees. In February 2018, after extensive development of a strategic business plan and a loan in the amount of $75,000 from the Business Development Bank, she started University Health Foods on Wheels. Based on a marketing plan that stressed fast delivery on campus, excellent customer service, and healthy foods, the firm grew rapidly. In short, students would call a telephone number and order their food from a menu. Health Foods would deliver it for them. At present, the company employs 16 people: 8 cooks earning between $18.75 and $20.25 per hour; 8 delivery persons paid between $16.50 and $18.50 per hour; 2 phone order clerks, each earning $15.75 per hour; an assistant manager earning $21.10 per hour; and a general manager with a wage of $24.00 per hour. 

Amelia intends to create a new managerial position, purchasing agent, to handle the complex duties of providing healthy food items for the company’s numerous suppliers. Since the position of purchasing agent is new, Amelia is not sure how much to pay this person. She wants to employ an individual with five to eight years of experience in food-related purchasing. 

Questions

1. What factors should Amelia consider when setting the wage for the purchasing agent position? What resources are available for them to consult when establishing this wage? 

2. Are there any incentive pay systems Amelia should consider? Discuss a few options.