Henderson Printing is a small$-$ to medium$-$sized manufacturer of account books, ledgers, and various types of record books used in business. Located in Halifax, the company has annual sales of about $$12$ million, mostly in the Atlantic provinces.

The owner, George Henderson, is a firm believer in making a high$-$quality product that will stand up to many years of use. He uses only high$-$grade paper, cover stock, and binding materials. Of course, this has led to high production costs and high prices. He also believes in a high level of customer service and is willing to make the products to customers$$ specifications whenever they so request. resetting the equipment. for relatively short production runs of customized products takes extra time and drives up costs. The firm employs about $80$ people. The firm has a few supervisors to oversee production, but their responsibilities are not spelled out, so the supervisors often contradict one another. Whenever there is a problem, everyone knows that you have to go to George for a definite answer.

he company also has several salespeople who travel throughout the Atlantic region. The company has one bookkeeper to keep records and issue the pay cheques. The firm has no specialists in accounting, marketing, human resources, or production; George handles these areas himself, although he has no real training about them which is causing issues at the workplace. George tries hard to be a benevolent employer. Although he feels the organization cannot afford any formal employee benefits, he keeps sick workers on payroll for a considerable time. George have shown little interest in unionization during the few approaches made by union organizers. George has never gotten around by to giving annual raises, so any employee who wants a raise has to approach him. He gives raises to most people who approach him, but the amount depends on his mood at the time and on how well he knows the employee. George believes that a good employer should recognize the contributions made by employees during the year. Every Christmas, if profits allow, he gives merit bonuses to employees.

Not surprisingly, longer term employees tend to receive much higher bonuses than new employees. He has noticed this tendency, but assumes that if an employee has been with the firm longer, that person must be more productive. Use the following questions to guide your analysis of the case and formulate your analysis and recommendations.

What is contributing to the high turnover of new employees?

What are the causes and consequences of employee dissatisfaction with Henderson$$s compensation practices?

Do you think the compensation system is fair, equitable and effective? Why or why not?

What principles for effective reward systems are being violated in Henderson$$s compensation practices?

What recommendations for improving compensation practices would you offer Georgette?

Set line spacing to $1\mathrm{.}5.$

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