Minuteman Imprinting Background (scenario) Peter Hillen had an uneasy feeling of apprehension as he took arrived at the Victoria B.C. office to start a new job as general manager. Peter Hillen is a recent graduate with a Commerce Degree. Minuteman Imprinting is a small manufacturer and reseller of custom imprinted promotional products. The company has annual sales of about $9 million, mostly around B.C. and Alberta. The owner, Kate Kerrick, built up the business over 40 years. She uses high-quality materials, resulting in high production costs and high retail prices. The result is resetting the equipment for relatively short production runs of customized products (which takes extra time and increases costs.) There are a few supervisors who oversee production, but their responsibilities are not clearly spelled out, so the supervisors often contradict one another. There is no system for scheduling production; in fact, there are few systems of any kind. Kate tends to resolve most decisions and issues. Most of the firm employees (50) work in production. The company also has several travelling salespeople. Additionally, there is one book-keeper to keep records and issue the paycheques. Several office employees to handle routine administrative. Kate manages most areas of the company (accounting, marketing, human resources.) Kate tries hard to be a generous employer. The company cannot sustain the cost of any formal employee benefits. Sometimes, sick workers are kept on payrollfor a considerable time, especially if Kate knows the worker has a family to support. There is little interest by employees in unionization. Minuteman has no formal system for determining compensation. Kate tends to make all pay decisions on the spur of the moment, so almost everybody has a different pay rate. There isno policy for annual raises, so any employee who wants a raise has to approach Kate. Depending on her mood (and how much she knows about you), Kate gives raises to most people who approach her. When the company is profitable raises are higher. They are also higher if she knows the employee has a family to support, or if the employee's spouse has been laid off, or if the employee has added a new member of the family. Every Christmas, if profitsallow, Kate gives merit bonuses to employees (based on what she says are their contributions to Minuteman. One day in early December, she sits down with her employee list, by each department, and pencils in an amount next to each name. Everybody gets something, but the amounts vary greatly. If Kate can associate a face with the name (which is difficult sometimes, because new employees seem to turn over a lot), she tends to give larger bonuses. Longer-term employees tend to receive much higher bonuses than new employees. Kate has noticed this tendency, but assumes that if an employee has been with the firm longer, that person must be more productive, so this is fair. Kate personally distributes the bonus cheques on the last working day before Christmas. Since Kate has been with the business 40 years, she is planning to gradually step away from the business over the next year or two and turn the operation of the business over to the new General Manager Peter Hillen (Peter was not aware of this when he accepted the new job at Minuteman) To add to Peter's new challenge, the company bookkeeper informed Kate and Peter that there wasn't enough money in the bank to meet payroll Subject 1 State which type of organization is Minuteman Impressions (Classic, Human Relations or High-Involvement) and briefly state why based on the facts in the scenario (refer to Compensation Notebook 2.2 Contextual Variables) Subject 2 State your recommendation to Peter Hillen whether the pay policy should Lag, Lead, or Match the market (one-word answer.) Then, state your most important reason for choosing this pay policy (based on the information in the attached scenario Minuteman Impressions.) Subject 3 Review Paragraph 6 (starts with Kate tries to be.) Using your compensation knowledge of indirect pay what can Peter change or implement in order to contain costs and without negatively impacting desired behaviours