In managing production worker compensation and expenditures for best practice training, the overriding objective of company managers should be to
compensate production workers at levels that are close to the highest in the industry in each geographic region where its production facilities are located–this is because companies with the highest total annual compensation packages attract highly-motivated workers with the skills needed to achieve the highest levels of labor productivity.
o make sure its annual total compensation of production workers remains below the average annual total compensation paid by all companies in the regions where it has production facilities.
o pay an incentive per non-defective pair that results in the lowest feasible reject rate for branded pairs produced.
o achieve labor costs per pair produced that are at worst below the industry average and at best are very close to (or even equal to) the industry-low in each region where the company has production facilities.
