WrapItUp: Developing a New Compensation Plan

Case Questions:

1. Among the 4 options below, which action do you recommend for WrapItUp (Reyes) and why based on the information presented in the case?
    Keep the new ShareIt plan as is and roll it out to a larger sample of stores.
    Modify the ShareIt plan by increasing base pay and reducing the proportion of variable pay; roll it out to a sample of stores.
    Keep the ShareIt plan as is but require that managers grow revenues but not through cost-cutting.
    Eliminate the ShareIt plan and increase base pay so that managers are paid above market wages (no variable pay).
2. (2a) What were three major problems WrapItUp was experiencing prior to implementing the ShareIt program? (2b) What do you see as the primary causes of each program at WrapItUp?
3. What are the 4 strengths of the ShareIt plan (be specific)?
4. What are the 4 weaknesses of the ShareIt plan (be specific)?
5. Do you think managers’ increase in pay was solely responsible for the results? Why or why not?
6. What 3 changes should Reyes consider making to the ShareIt plan or other areas of WrapItUp before rolling it out to other restaurant locations (be specific)?

Clearly indicate your responses to questions 1 to 6.