Question

MANAGEMENT AT WORK Denise Owens, the owner and CEO of Extreme Routes, an indoor rock-climbing gym, needed to clear her head. She wanted to do what she did best -climb a really difficult route, at least a 5.11 on the Yosemite Decimal System, and preferably with a difficulty suffix of cord. Kitty, will you set up a new route for me? And make it hard. Sure thing, boss. Is 5.12. okay? Kitty, the route setter and instruction manager, had been at Extreme Routes for seven years and was one of Denise's closest friends, Perfect! Knowing a treat would be waiting for her that afternoon, Denise turned back to the spreadsheet in front of her. What was she going to do about these expenses? She had good staff, and she wanted to keep them, but she wasn't sure she was spending her budget for salaries and benefits most effectively. Denise had a basic compensation plan in place. Route setters were paid the most, because without new routes, the gym's clients wouldn't keep returning. Climbing instructors had the next highest take-home pay, and front desk staff were paid the least. Everyone who worked for Denise had medical, dental, vision, and life insurance. During the last staff meeting, both Kitty and Misha, the front desk manager, mentioned that some of the employees weren't working as hard as they could and that there wasn't much teamwork among the staff

If Denise decides to pay above market wages, she will find that she:

A. Increases the gym's overall costs
B. Decreases the profitability of the gym
C. Loses employees to turnover
D. Attracts and keeps better employeese

Answer 1

Paying above market wages could increase overall costs but also draw and retain better employees, potentially improving business in the long-term.

Step-by-step explanation:

When Denise decides to pay above market wages, she will find that one of the potential outcomes could be that she attracts and keeps better employees. While it might increase the gym's overall costs, providing higher wages could lead to greater employee satisfaction, reduced turnover, and potentially, more skilled and committed employees. However, this is not a simple equation; higher wages could also impact the profitability of the gym in the short term if the increase in staff productivity and customer retention do not offset the higher wage bill. Denise needs to consider not just wages but other factors like employee engagement strategies, process improvements, and customer service enhancements to boost teamwork and productivity among her staff.