In this article, the author does not directly use the words like $$competitive advantage$$ or $$vertical fit.$$

However, he explains that Walmart pays its employees less than Costco because its business operation

model differs from that of Costco. In other words, Walmart pays its employees less because its

$$competitive advantage$($which translates into its business operation model$)$ differs from that of Costco.

And the different business operation models $($or competitive advantages$)$ leading to different pay

practices $($different pay levels in this case$)$ can be explained by the concept of $$vertical fit of HRM

practices.$$ So$,$ the concepts that you learned in the above video by Professor Yoon can be utilized to

some extent to explain why different companies pay their employees differently.

Now I have researched the pay level of the two jobs, flight attendant and customer service agent, for the

two airlines: Spirit and American $($on January $10$th$,2024).$ The results are summarized in Table $1$ below.

Table $1.$ Yearly Total Pay by Job and Company

Job

Spirit Airlines American Airlines

Average Most Likely

Range

# of

responses Average Most Likely

Range

# of

responses

Flight

Attendant $$53$K$/$yr$1)$ $$39$K $-$ $$72$K $988$ $$58$K$/$yr$1)$ $$44$k $-$ $$79$k $2$K

Customer

Service Agent $$40$K$/$yr$1)$ $$34$K $-$ $$47$K $36$ $$42$K$/$yr$1)$ $$35$K $-$ $$50$K $265$

$1)$ yr: year

For this research, I have used the estimates available on the Glassdoor website $($www$.$glasdoor.com$).$

Now, answer the following questions $($bolded in blue$).$

Q$1.$ As you can see in the above table, Spirit Airlines pays the two jobs less than American Airlines. Using

Bonus Assignment: Strategy and Pay

$2$

the concept of $$vertical fit of HRM practices,$$ explain why we may observe this pay difference between

the two companies. Since you are asked to use the concept of $$vertical fit of HRM practices,$$ you need to

discuss the differences in competitive advantages $($or business strategies$)$ of these two companies and

how this difference may affect the pay level decisions of the two companies. Your answer should NOT be

as simple as $$One reason why Spirit Airlines pays its employees less than American Airlines can be the

difference in competitive advantages $($or business strategies$)$ of the two airlines.$$ You need to also

explain how the competitive advantages $($or business strategies$)$ differ and how this difference may

affect the pay level to be different. $(20$ points$)$

Q$2.$ Now choose any two companies that are in the same industry but utilize different competitive

advantages to compete in the market $($like the Crusader vs$.$ Galacticans example in the video Strategic Fit

of HR Practices and Pay Decisions$).$ Then, choose a job $($any job that you like$)$ and compare its pay level in

two companies using the estimates available on the Glassdoor website $($www$.$glasdoor.com$).$

Q$2-1.$ From the perspective of $$vertical fit of HRM practices,$$ which company do you expect to

pay the job more? Why? $(20$ points$)$

Q$2-2.$ What is the pay level of this job in two companies estimated by Glassdoor? Is the pay

level difference you have observed on the Glassdoor website $($www$.$glasdoor.com$)$ in alignment

with your expectations in Q$2-1?$ If not, why do you think this is the case? $(20$ points$)$

For answering Q$2,$ you do not need to draw a table.

$*$ To see the pay level estimate on the Glassdoor website $($www$.$glasdoor.com$),$ follow the below steps.

To do this, you$$ll need to sign up for a Glassdoor account. Students get $12$ months of free access to all

the content on the website. If you have already used the $12-$month free period, you can easily extend

this privilege by providing either a review of your current $($or past$)$ workplace or compensation

information of your current $($or recent$)$ job. If neither works for you, please contact the instructor.

Step $1$: Go to the web page $($www$.$glasdoor.com$).$

Step $2$: On the main page, click the $$Salaries$$ tab on the top.

Step $3$: In the search box, type in the company name. And for the purpose of this assignment,

delete the location on the right side of the search box. Then, click the search icon $($the green

magnifying glass icon on the right side of the location box$).$

Step $4$: Among the search results, click the company of your choice.

Step $5$: Now, you$$ll see the pay level estimates of the jobs within the company that you had

chosen. Examine the estimate for the job of your choice.

The video demonstrating this process is also provided with the assignment.

$**$ Depending on when you visit the Glassdoor webpage, the details may differ a little as the website

gets updated occasionally. For example, the video asks you to click "Full Pay Details" of a given job.

However, as of $1/10/2024,$ the full details can be viewed just by clicking the given job title. However,

the overall process is not that different, and you would not likely have difficulties finding the needed

information on the Glassdoor webpage. But if you need help finding the information you need, please