Part 4 (choose one section): establishing a pay structure, recognizing employee contributions with pay, or providing employee benefits The policies and procedures within each section should accomplish three goals: 1. Sustain or increase Sweets and Treats competitive advantage 2. Be applicable to and successfully followed by all current and future Sweets and Treats locations 3. Supported by current and future Sweets and Treats employees.

Establishing a Pay Structure Should the employees of Sweets and Treats be considered exempt or nonexempt employees? o Exempt not eligible for overtime pay o Nonexempt eligible for overtime pay Should Sweets and Treats pay at, above, or below the market rate? What should be the pay range for each job at Sweets and Treats? Should Sweets and Treats have pay differentials (e.g., for location)? Should Sweets and Treats use skill-based pay systems? Recognizing Employee Contributions with Pay What percentage of pay should be based on individual, group, and organizational performance at Sweets and Treats? If a percentage of pay is based on individual performance, which individual incentive(s) should be used? If a percentage of pay is based on group performance, which group incentive(s) should be used? If a percentage of pay is based on organizational performance, which organizational incentive(s) should be used? Should your answers to the previous questions apply to all employees or should executives be paid differently? Providing Employee Benefits What percentage of compensation for Sweets and Treats employees should be based on pay versus benefits? Should Sweets and Treats employees only have legally required benefits or optional benefits too? If optional benefits, should all Sweets and Treats employees be offered optional benefits or not? If optional benefits are offered, which types of optional benefits should be offered? Should optional benefits-eligible employees be offered a single benefits package or should cafeteria-style plans be offered? o Cafeteria-style plans - a benefits plan that offers employees a set of alternatives from which they can choose the types and amounts of benefits they want