Case Study 1 Pay Decisions at Performance Sports



Case Study 1 Pay Decisions at Performance Sports


Katie Perkins’s career objective while attending Rockford State College was to obtain a degree in small business management and to start her own business after graduation. Her ultimate desire was to combine her love of sports and a strong interest in marketing to start a mail-order golf equipment business aimed specifically at beginning golfers. After extensive development of a strategic business plan and a loan in the amount of $75,000 from the Small Business Administration, Performance Sports was begun. Based on a marketing plan that stressed fast delivery, error-free customer service, and large discount pricing, Performance Sports grew rapidly. At present the company employs 16 people: eight customer service representatives earning between $11.25 and $13.50 per hour; four shipping and receiving associates paid between $8.50 and $9.50 per hour; two clerical employees each earning $8.25 per hour; an assistant manager earning $15.25 per hour; and a general manager with a wage of $16.75 per hour. Both the manager and assistant manager are former customer service representatives. Perkins intends to create a new managerial position, purchasing agent, to handle the complex duties of purchasing golf equipment from the company’s numerous equipment manufacturers. Also, the mail-order catalog will be expanded to handle a complete line of tennis equipment. Since the position of purchasing agent is new, Perkins is not sure how much to pay this person. She wants to employ an individual with five to eight years of experience in sports equipment purchasing. While attending an equipment manufacturers’ convention in Las Vegas, Nevada, Perkins learns that a competitor, East Valley Sports, pays its customer service representatives on a pay-for-performance basis. Intrigued by this compensation philosophy, Perkins asks her assistant manager, George Balkin, to research the pros and cons of this payment strategy. This request has become a priority because only last week two customer service representatives expressed dissatisfaction with their hourly wage. Both complained that they felt underpaid relative to the large amount of sales revenue each generates for the company.


1. What factors should Perkins and Balkin consider when setting the wage for the purchasing agent position? What resources are available for them to consult when establishing this wage?

2. Suggest advantages and disadvantages of a payfor-performance policy for Performance Sports.

3. Suggest a new payment plan for the customer service representatives.



Case Study 2 Evaluate the Work-Life Climate in Your Company


What is the quality of the work-life environment in your company? The following survey provided by the Work and Family Connection will help provide a “case analysis” of the climate in your organization. Answers to the 20 questions will provide clear insights about your company’s position in the work-life area. Agree or Disagree with the Following Statements:

1. My manager or supervisor treats my work-life needs with sensitivity.

2. It is usually easy for me to manage the demands of both work and home life.

3. My career path at this company is limited because of the pressure of home life demands.

4. My job at this company keeps me from maintaining the quality of life I want.

5. My manager or supervisor is supportive when home life issues interfere with work.

6. My manager or supervisor focuses on results, rather than the time I am at my desk.

7. My manager or supervisor has a good understanding of flexible work hour practices.

8. If I requested a flexible work arrangement, my manager or supervisor would support me.

9. My manager or supervisor is often inflexible or insensitive about my personal needs.

10. I believe my manager or supervisor treats me with respect.

11. My manager or supervisor allows me informal flexibility as long as I get the job done.

12. My manager or supervisor tends to treat us like children.

13. My manager or supervisor seldom gives me praise or recognition for the work I do.

14. My manager or supervisor seems to care about me as a person.

15. I would recommend this company to others.

16. The work I do is not all that important to this company’s success.

17. If I could find another job with better pay, I would leave this organization.

18. If I could find another job where I would be treated with respect, I would take it.

19. If I could find another job where I could have more flexibility, I would take it.

20. I am totally committed to this company. For a perfect score, you should answer “Disagree” to questions 3, 4, 9, 12, 13, 16, 17, 18, and 19 and “Agree” to all the rest, 1, 2, 5, 6, 7, 8, 10, 11, 14, 15, and 20. To score, begin by giving yourself 20 points. Then deduct one point for every “wrong” response from the total score. If your score is 18 to 20: Congratulations! Your organization is leading the nation in flexibility and supportiveness. If your score is 14 to 17: Your organization is probably more supportive and flexible than most, but you have room to grow. If your score is 11 to 13: You could be open to other job offers in the race for talent among employees. If your score is 10 or less: Your managers will need help to manage the twenty-first-century workforce.