1. Draw a diagram showing with arrows how compensation at Hotel Paris should influence employee performance, which should in turn influence Hotel Paris performance. Include at each level examples of relevant compensation policies, employee behavior, and Hotel Paris outcomes. The Hotel Paris s competitive strategy is To use superior guest service to differentiate the Hotel Paris properties, and to thereby increase the length of stay and return rate of guests, and thus boost revenues and profitability. HR manager Lisa Cruz must now formulate functional policies and activities that support this competitive strategy by eliciting the required employee behaviors and competencies.

Like several other HR systems at the Hotel Paris, the compensation program was unplanned and unsophisticated.

The company has a narrow target range for what it will pay employees in each job category (front-desk clerk, security guard, and so forth). Each hotel manager decides where to start a new employee within that narrow pay range. The company has given little thought to tying general pay levels or individual employees pay to the company s strategic goals.