People’s Home Gadgets (PHG) is a young company competing in the consumer electronics and appliances industries. The company has a large selection of items which range in the price spectrum from very low cost to very high end. Recently, the company has hired a full-time director of HR. Paula Hillman. Paula comes in at a time when the company is experiencing issues with their sales representatives, who record a high turnover rate of 70% annually. The following paper explores the alternative HR systems that the new HR head can apply to reduce the turnover rates. Also, the text includes the main strategic performance driver for PHG and how its customer service representatives contribute to it. In addition to this, the essay covers an HR system design meant to realize its strategic performance.
Nature of the HR system that Paula should employ
As a new HR manager, Paula anticipates creating an HR system that will motivate PHG's customer service representatives to retain their position at the company. The management at PHG noted that the high turnover by the representatives at the company could be attributed to frustrations over payments. PHG applies a merit-pay system that involves paying its sales representatives commissions based on the sales they make. However, the company which is known for its low costs forces its representatives to lower the prices of the commodities they are selling in certain instances. This results in the sales representatives cutting into their take and home pay. Therefore, the HR system that will be implemented should also include strategies that maintain the low-cost policy of the business besides encouraging employees to stay in the company. The HR h
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