Final answer:
To prevent the loss of top salespeople like Kevin, the Tire Company should adopt either merit pay or commission-based pay to align compensation with individual performance and productivity, incentivizing employees to work harder and stay with the company.
Step-by-step explanation:
To avoid losing other top-performing salespeople like Kevin, the Tire Company should consider implementing merit pay or a commission-based pay system. Both of these compensation strategies align pay with individual performance, thereby incentivizing employees to work harder and stay with the company. Merit pay rewards employees for their individual achievements, while commission-based pay offers a percentage of the sales generated by the employee, thus encouraging sales personnel to maximize their sales output.
Given that workers' productivity often depends on their pay, the Tire Company could benefit from these pay structures, as suggested by efficiency wage theory. Paying employees based on their productivity could lead to increased loyalty and motivation, reducing the likelihood of turnover. It is crucial for the Tire Company to assess its wage policies and determine which pay structure best aligns with its goals and sales force dynamics.