¶ … Hiring Variable Pay Plan" Chapter 12. In a (4-8) page paper, address questions . Remember evaluate HVP program proposed. In paper: Include a summary situation. Assess attractiveness HVP program applicants receive offers, deciding attractive
HVP Plan
If I were an applicant, the high-risk HVP plan would be attractive to me. The plan still provides a base salary, yet it offers the potential for extremely high bonuses -- up to 60%. Salaries are initially negotiable, allowing for a great deal of flexibility to bargain 'up' during the hiring process, even if the salary is technically below market value. As someone with a great deal of confidence, I feel that I could make the high-risk plan work for me. Also, there is an additional 10% bonus for top talent during the first few years of employment, which would make my salary even higher, if I qualified. The likelihood of profiting is strong, given that the company is aggressively recruiting new hires, and its current workers...
The plan seems likely to increase job offer acceptance rates, given that the primary reason cited for turning down offers of employment was the desire to accept similar high-risk compensation plans at competing companies. However, there are other considerations, such as the desirability of working at EMS in general, relative to other firms. If the high-risk bonus plan that EMS is offering is similar to that at other companies, there is no guarantee that employees will select EMS first, unless they are attracted by the hot skills premium offered. That fact presents its own problems, namely the problem of retaining talent after the expense of training new hires.
Q3. The plan seems unlikely to reduce turnover. The plan rewards highly desirable candidates with an additional 10% bonus only during the first two years of employment, and once that bonus expires these candidates will have a strong incentive to seek employment…
