1. Using the five-step compensation strategy formulation process (Figure 6.1), formulate a compensation strategy for production workers in the Multi-Products Corporation case on page 481 in the Appendix and summarize it using a strategic template similar to that shown in Figure 6.2. Justify your recommendations.

FIGURE 6.1 THE COMPENSATION STRATEGY FORMULATION PROCESS Define the Required Behaviour Define the Role of Compensation Determine the Compensation Mix Determine the Compensation Level Evaluate the Proposed Strategy.

FIGURE 6.2 COMPENSATION STRATEGY TEMPLATE JOB FAMILY: Sales Engineer TOTAL COMPENSATION LEVEL: MATCH? LEAD? 20% LAG? Proportion of Total Pay 1. Base Pay 50% a. Job evaluation b. Market pricing 50 C. Pay for knowledge 2. Performance Pay 30% a. Individual performance pay i. Piece rate ii. Commissions 10% iii. Merit bonuses iv. Special incentives b. Group performance pay i. Gain sharing ii. Goal sharing iii. Other group pay France Commissions 10% C. Organization performance pay i. Profit sharing 5% ii. Stock plan 5% iii. Other organization pay 3. Indirect Pay 20% a. Mandatory benefits 8% b. Pension plan 4% C. Health & life insurance 3% d. Paid time off e. Employee services f. Other benefits Automobile 5%%