Q49

Top Gun Tech is a start-up video game developer for the Xbox Series X/S and it is based in Madison, WI. It has a small workforce of 12 employees. Given that the company is in start-up mode, it possesses limited financial resources and it is struggling to compete with other firms in terms of starting salaries for designers and programmers. The starting salaries they are offering new technical employees is $50,000/yr. whereas their competitors are offering $80-90,000/yr. The company is growing rapidly so it needs to hire new team members ASAP. If management hired you as an HR consultant to help them to deal with this issue, what would you recommend?

Keep the starting salaries at $50,000, but offer a performance incentive based on the firm's profitability that will make it possible for workers to earn $120,000-150,000/yr., if the company achieves its financial objectives.

Increase the salaries of new hires to $80,000/yr. plus a $10,000 performance bonus.

Increase the starting salaries for new hires to $70,000/yr. plus an annual merit pay increase.

Do not change anything, but have management meet with employees and educate them about the company's situation and the need to control costs including labor costs.