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Marilyn faces multiple restrictions in her existing compensation system. The flat $14 hourly wage without benefits creates pay inequality because it fails to consider employee skills and work responsibilities and performance levels. The absence of performance-based rewards in the compensation system leads to decreased employee motivation because staff members receive no additional compensation for delivering outstanding customer service or exceeding their standard tasks. The current compensation system has resulted in low employee morale and decreased customer satisfaction while experienced staff members think about leaving according to Dessler (2020).

Marilyn should implement a strategic compensation system which will enhance both employee motivation and workforce retention. The implementation of performance-based pay structures with satisfaction-based and sales-targeted bonus systems will drive employees to deliver superior service. Sales-oriented staff members will increase their productivity when they receive commissions as part of their compensation. The addition of healthcare benefits together with flexible work hours and paid vacation time would enhance the appeal of working at the company. Employee awards and development programs alongside non-monetary recognition systems help boost staff engagement according to Milkovich et al. (2019).

A solution that combines different elements represents the most successful approach. A stable base wage should exist alongside multiple incentive structures and benefits and recognition programs to establish a complete rewards system. The combined approach drives employee motivation while maintaining staff retention and supports Marilyn's customer satisfaction initiative (Armstrong & Taylor, 2020).