Group and present an action plan for what solutions should be utilized.

Two Harbours Teachers Two Harbours is a private school that employs 100 teachers. The current total payroll for the teachers is $6,500,000. Teachers are paid according to salary schedules that include: a. "Steps" that pay for accumulating experience; and b. "Groups" that pay teachers more when they attain higher education levels. Each step represents four years of teaching experience and each group represents the teachers' increasing educational attainment. Critics of such a schedule say that they guarantee steadily climbing costs, even in times when the school's finances do not permit increases. The following shows the current salary schedule at Two Harbours, as of January 1 of this year (Year 1): Step Group 1 Group 2 Group 3 Group 4 $48,040 $50,273 $54,375 $58,230 1 $50,578 $52,939 $58,029 $61,388 2 $53,519 $56,014 $61,890 $65,146 3 $56,460 $59,096 $65,742 $68,916 $59,809 $62,566 $69,810 $73,291 S $63,152 $66,068 $73,868 $77,666 The compensation team at Two Harbours is aware of the following: 1. A number of teachers will receive raises during Year 1 due to their accumulating experience and higher education attainment, that is, changes in "steps" and "groups." The total raise amounts to $80,000. 2. The current collective agreement states that teachers' salaries will rise by 1% on January 1 of next year (Year 2); and 3. Student enrollment is expected to rise by 3% next year (Year 2)