#7 Awarding Compensation Exercise | Pay-For-Performance & Compensation (20 Points)

Following are the work records of five employees. As their supervisor, you have just completed their annual performance appraisal reviews, and it is now time to make recommendations for their future salary.

Your department budget has allocated $6,880 (pot) for salary increases. Distribute the $6,880 among the employees based on the descriptions of each.

Also take into consideration their current Compa Ratio. The actual compensation salary at 100% Compa Ratio for their position is $40,000 annually.

Performance Ratings: BA = Below Average A = Average AA = Above Average E = Exceptional

1. Jennifer Moore earns $28,850. Her performance appraisal was exceptional (E). Her peers are upset because they feel she is working only to provide a second income. Moreover, her peers see her as trying to show them up.
2. Rick Watson earns a salary of $36,000. His annual performance appraisal was average (A). Several members of the work group have spoken to you about the difficulty involved in Ricks job. They feel that it is a tough and demanding job and that he is doing his best.
3. Jim Miller earns $31,250. His performance appraisal was below average (BA), and he seems to have difficulty adjusting to his coworkers. Jim has had a difficult time this past year. His wife passed away early in the year, and his father has recently been diagnosed as terminally ill.
4. Jean Jackson currently earns $41,000 annually. Her performance appraisal rating was exceptional (E). She is respected by her peers and is felt to be an asset to the work group. She is divorced and has three children to support.
5. Wayne Brown earns $28,000. His performance appraisal was above average (AA). He is respected by his peers and is generally considered to be a good guy.

Complete the compensation Scorecard by: populating the performance appraisal rating and current salary; and then allocate the $6,880 budget pot by including the amount of increase you will give to each employee. Your goal is to stay within your budget of $6,880 by being fair to employees based on their performance. You will be primarily graded on your reasons, justifications and comments.

Employee	Appraisal Rating* BA/A/AA/E	Current Annual Salary	Current Compa Ratio	Proposed Salary Increase Amount	New Annual Salary	Comments/Justification/Reasons for Giving the Amount
J. Moore	E	$28,850	72%
R. Watson	A	$36,000	90%
J. Miller	BA	$31,250	78%
J. Jackson	E	$41,000	102%
W. Brown	AA	$28,000	70%
Total Distribution				**

** Your goal is to stay within your budget of $6,880