Problem: You are the HR Manager for a retail store with 4 locations within one metropolitan area. The company's sales/marketing strategy has been to be the low cost leader (i.e. have lower prices than competitors), and therefore to pay its store employees just above minimum wage, in the first quartile. Your boss has just told you that he is changing the strategy and now he wants to provide "optimum service", and not necessarily the lowest prices.
What changes should be made in the company's compensation strategy as a result of this new direction?
You expect your boss will be surprised at how much impact the new pay strategy will have on the payroll budget. What could you suggest to reduce the impact?