Pay systems are internally fair and externally competitive in the labour market

ABC Inc., a mid-sized telemarketing firm, located in Oakville, Ontario, wants to ensure that its pay systems are internally fair and externally competitive in the labour market.  The CEO, who believes the organization’s compensation system can help it achieve its goals, has hired you to re-design the base pay for four key jobs in the organization: Customer Service Manager, Senior Customer Service Representative, Junior Customer Service Representative, and Telephone Receptionist.  The firm has about 50 employees hired in these four jobs.

ABC Inc. wants to implement a pay system that will reward its employees based on the firm’s performance.  The CEO has been informed that there are profit-sharing plans that can be used.  As a compensation expert, explain to the CEO two different types of profit-sharing plans that can be used.  Furthermore, discuss four key issues that ABC Inc. needs to consider in designing profit-sharing plans in general.