Compensation and Benefit at Domino's Pizza

This article discusses the compensation and benefit policies at Domino's Pizza. It includes an analysis of the workforce, compensation, contextual variables, and structural variables. The article also provides recommendations for the company.

RUNNING HEAD: COMPENSATION AND BENEFIT
compensation and benefit
Domino’s Pizza

COMPENSATION AND BENEFIT 1
Table of Contents
Executive summary / Company analysis...............................................................................................2
Workforce analysis................................................................................................................................2
Compensation analysis..........................................................................................................................3
Contextual variables..............................................................................................................................4
1. Task environment and domain.......................................................................................................4
2. Business strategy...........................................................................................................................4
3. Organisation..................................................................................................................................5
4. Workforce......................................................................................................................................5
5. Technology....................................................................................................................................5
Structural variables................................................................................................................................5
1. Job design......................................................................................................................................6
2. Coordination and departmentation.................................................................................................6
3. Decision making and leadership....................................................................................................6
4. Communication and information...................................................................................................7
5. Control system...............................................................................................................................7
6. Reward system...............................................................................................................................7
Management system..............................................................................................................................7
1. Quality system...............................................................................................................................7
2. Performance management system..................................................................................................8
3. Policies and procedures.................................................................................................................8
4 Information system.........................................................................................................................8
5. Talent management system............................................................................................................8
6. Change management system..........................................................................................................8
7. Project management system...........................................................................................................8
8. Risk management system..............................................................................................................9
9. Health and safety system...............................................................................................................9
Compensation mix and related measures of success..............................................................................9
1 Base pay.........................................................................................................................................9
2 Merit pay........................................................................................................................................9
3 Indirect pay...................................................................................................................................10
Goals for the reward and compensation system...................................................................................10
Your recommendations........................................................................................................................10
References...........................................................................................................................................11

COMPENSATION AND BENEFIT 2
Executive summary / Company analysis
As per the Domino’s Pizza website, it is a well-known American pizza restaurant
chain which was founded in the year 1960 by Tom Monaghan and his brother named James
(Domino’s jobs 2018). Domino’s is famous among the principal companies of pizza
manufacturing and delivery in the United States and in other parts of the world.
The strategy of delivering quality pizza at reasonable prices had been in force since
1960 when the owners borrowed a sum of $900 and started their business with a small pizza
store in the area of Ypsilanti, Michigan (Domino’s jobs 2018). The establishment now is
headquartered at the domino’s farm office park in Ann Arbor, Michigan (Domino’s jobs
2018). The industry serves its products worldwide amounting to 13,811 in a total number of
locations (Campaign 2018). The subcategorization of products includes Desserts, chicken
wings, pasta, pizza and submarine sandwiches. As per the report of January 2017, it is stated
that the total revenue of the company contributes nearly about US$ 2.47 billion. The
operating income and net income are included in the figures of US$ 2.47 million and US$
214.68 million respectively (Domino’s jobs, 2018). The hours of operation are flexible in
nature. There is the existence of a non-unionised environment as principles are the foundation
of mutual interest where the harm arising to the parties is nil. This also eliminates the
occurrence of strikes and less productivity. In addition, the company also provides the
employee stock purchasing program with the basic life insurance and adoption of benefits.
Since the day of hiring, the full-time employees are eligible for full claim of health and
wellbeing benefits which includes vision, medical, dental as well as voluntary benefits.
Sometimes, the company faces the challenge in 30 minutes free delivery policy. However, the
customers range of all income groups because of its fair price policy (Domino’s jobs 2018).
Workforce analysis
The total number of employees working under the cover head of Domino’s is around
290,000 approximtaely. Dominos offers the job opportunity for the seekers of all age group
but more prominently major part of its workforce are young bloods with the zeal of working
in an effective and efficient manner (Campaign, 2018). Some of the skills and competencies
the employees need to obtain over the training session include handling of cash,
administration of people, service-oriented skills, cleaning and maintenance in addition to
proper management and scheduling of consumer relations (Campaign, 2018).

COMPENSATION AND BENEFIT 3
On the basis of the information attained from the sources, the eminent strategy which
this company could attain to maximize its profit is a focus on the management of human
relation strategy. There is a constant requirement for the teamwork tactic as the line includes
the contribution of indefinite people for the successful delivery.
Also, Domino’s takes into the need and favourability of its workforce by addressing
the different people with a different mechanism. Say for example, after analyzing that there
are many students who are capable of working and are unemployed which in turn restricts to
remove the poverty within. To resolve the aforesaid, Domino’ started the policy of part-time
job for seekers so that it could help in covering the day to day expenses. The breaks for the
scholarship are also open for extraordinary students. Efforts are inclined towards the retaining
of quality employees by proper handling of human resource management i.e. timely
promotions and hike, quality benefits along with monetary increments etc. (Furness 2009).
Compensation analysis
The compensation committee periodically reviews and finalizes the base salary of the
officers including the Chief Executive Officer’s salary. There are three main hierarchy levels
of employees in Domino’s Restaurants. The lower level consists of hourly paid employees
(i.e. fast food workers, cashiers, and cooks); the middle level consists of salaried employees
(i.e. Assistant Managers and Managers), and the top-level employees are the CEOs and
owners. The hourly rate of the Domino's delivery driver ranges on an average of $7.40 per
hour. Consequently the salary of restaurant assistant manager and customer service
representative amounts to $10.47 and $7.59 respectively (PayScale, 2018). Apparently, while
fixing the figures of pay the committee considers factors of the median base salary of the peer
group, a recent survey of the peer group, agreement terms and conditions, measurement of
performance against objectives, the degree of leadership along with responsibilities, the term
of experience as well as an entire compensation package (PayScale, Inc 2018).
The CEO has a well-defined channel of annual performance incentive scheme
governed by Domino’s Pizza, Inc. The employees working have the opportunity of earning
an annual performance incentive which is entirely based on the cash payment of Company’s
performance in the market. The percentile of the bonus is nearly 100% of the annual base
salary except for the Chief executive officer who is entitled to the benchmark of 200% of the
respective base salary (Careers at dominoes, 2018). The measurement of the required

COMPENSATION AND BENEFIT 4
performance practices segment income which is defined by the Company under the clause of
the statement of Financial Accounting standard.
The segment income approach laid down by the committee in 2008 has proved an
excellent barometer towards the overall success of the company till the date. Moreover, there
is also a policy in which there is no inducement paid to the officials lest the annual
performance incentive edge is equal to almost 90% of the targeted incentive which surpassed
in the appropriate fiscal year. The supreme annual performance incentive to be marked under
the head of Senior Executive cannot exceed $2,500,000 (Furness, 2009). Also, there are time
bonuses which are obtainable to managers, operation supervisors, assistant and HR managers.
Various profit sharing charts are designed which serve the interest of varied people. As a
result of this, the proportion of compensation mix includes bonuses and profit sharing. There
is regular allotment of merit pay to the extraordinary performing workers and managers in
form of increased pay or scholarship granted.
Contextual variables
These are termed as the fleeting factors which involve the setting in along with the
interaction happening, also delineated from the personal as well as interpersonal
physiognomies (Bamburry, 2015). Some of them are mentioned below:
1. Task environment and domain
The company deals in the products line such as desserts, chicken wings, pasta, pizza
and submarine sandwiches. The quality of the product to be delivered is given due
importance. The topmost and upgraded machines and technology have been used. The
hygiene also plays a crucial role in this regards. There was an introduction of hot bags in
order to keep pizzas crispy and hot during delivery as well.
2. Business strategy
The strategy adopted is to deliver quality and taste within the reasonable price range.
Also, multi-flavor and multiregional specifications are added after the careful scrutinization.
American –Italian products are formulated with pizza being the main highlight in accordance
with countertop and various toppings. The 30 minutes free delivery is the famous business
policy of Domino’s within its targeted customers (Bamburry, 2015).

COMPENSATION AND BENEFIT 5
3. Organisation
The organization opened its first franchise in the year 1978 which was 200 in number.
After the successful running of 38 years, Domino's pizza sold its ownership of 93% of the
company in 1998 to Bain capital for the worth of $1 billion. Subsequently, In 2004 Domino’s
also started trading in common stock on the defined stock exchange. As of now, the company
has a total of more than 9350 stores in the wide area of more than 60 international markets
(International Franchising with Domino’s, 2018).
4. Workforce
The employees retained are of high quality and skills with the tact of working as team
members so that it could maximize the output and revenue earned. The goals are exercised
towards the reduction in employee turn-over and moreover maintaining the long life
continuity in the workforce. The grievance redresser mechanism is also formulated in order to
exercise transparent control and quality productivity (PayScale, Inc 2018). The age group of
the workforce is generally within 23-40 which justifies on the hand respective knowledge and
experience as well. The working hours are flexible in nature. Additionally, the base pay
ranges as per the designation and the productivity of the officials. Various other incentives,
rebates and perk benefits are granted to facilitate the interests of employees.
5. Technology
The Domino’s philosophy has paved its way on the ground of convenience ensured to
its customers. This ethos helped in almost every dimension from the creation of piping hot
pizza at the reasonable prices towards the innovative technology. The technology adopted of
ordering food online aided in becoming the first ever pizza company to offer services for
home delivery. The system of creating a mobile app on each platform, a highly responsive
website, single click ordering mechanism and tracking facility available on ordered items
grabs the attention of its customers. The technology of fastest and easiest mode is worked
upon to get pizzas out of them. The upcoming advent is of development of DRU which
stands for Domino’s Robotic Unit i.e. an autonomous delivery vehicle attached to a GPS
driver tracker (Domino’s 2015).
Structural variables
These variables include the integer ratio which custodies the long-term circumstances
of the society which are embedded in social, political and various other organizational
arrangements that lay down the fundamentals of risk valuations. Some of discussed in detail

COMPENSATION AND BENEFIT 6
1. Job design
Dominos is well renowned for their pizzas so in that context the process would start
when the products (base, vegetables, oregano, chili flecks etc.) are acquired from the
suppliers. Thereafter the essentials are transported to the destinations. Later, orders are taken
on the counter and order number is allotted to customers. The details are fetched and cash is
collected. The order summary is passed to the back office operators and cooks. After the
preparation, the prepared order number is displayed on the screen and customer collect the
order via the drive-thru window. The working components involve purchasers and supply
personnel, preparation cooks, frontline staff and waiters for the cleaning of sitting area.
2. Coordination and departmentation
There is a high concentration of the authority and responsibility within each designed
hierarchical level of the company. The staff needs to report to the shift in charge officer who
in turn needs to report to the assistant manager. The shift manager is lawful to report to the
general manager. Both the horizontal and vertical level of defragmentation works
(Grueneberg, Schneiderman & Chiu, 2016). Each department has several other
subcategorizations in it.
(Source: Domino’s hierarchy, 2017)
3. Decision making and leadership
The decision making flows from top to bottom within the organization depending on
the relative post, the degree of autocratic power is granted. The procedure is automated and
strict in nature to ensure the easy and quick experience for the customers. All the decision
regarding the policy of new additions and price fixing, discounts, coupons, changes in taste
and flavor i.e. topping and crust lie in the hand of top most directors and owners. The
implementation of designed policies in an exact manner lies with subsequent levels below.

COMPENSATION AND BENEFIT 7
Leadership is put into existence by the formulation of a team leader who in turn is responsible
for the acts of members of the group.
4. Communication and information
In actual terms, both the formal and informal channels are used to seek information
and communicate it. Generally, a major part of communication on the daily basis is
conformal in nature. The working environment involves a lot of vocal communication in
addition to hands-on wisdom takes place at every single phase. The parameter is developed
upon the channels of politeness and sociability.
5. Control system
The control is binding on the practices followed by the workers at Dominoes. The act
which is played on the part of the employees should be within the boundaries and set
principles of organization. They are controlled on the job through the standardization
procedure which entails direct supervision and extending of punishment and penalty in case
of any deviations. It keeps a check on quality to be maintained.
6. Reward system
Moreover, for the employees with extraordinary performance and skills, the rewards
are extrinsic in nature along with certain benefits (i.e. paid hourly rate). The employees are
also paid separately for the overtime hours. The reward system is also extended to the loyal
customers such as rewards on online order done, is stored under the head of “rewards”. For
example- a piece of the pie reward program allows earning 10 points per day in the context of
online orders of value $10 (Laudon & Laudon, 2016).
Management system
The following step is defining what all system will be exaggerated in order to attain
the desired goals using the managerial classical strategy.
1. Quality system
This includes the quality remarks which are earned since the period of practice. The
system rechecks the quality matches the benchmark which is stated on the Domino’s official
page. Sometimes the high-speed delivery of service might cause unwanted quality errors
which in turn could generate dissatisfied customer (Syed, 2016). The quality system
minimizes the chances of bad and unhygienic quality.

COMPENSATION AND BENEFIT 8
2. Performance management system
The performance of management is defined to measure the performance of the
specific employee. It can be done by gauging the number of units produced per hour or
number of delivery made within the guaranteed time limit in a day. Nevertheless, the agenda
lies are not all orders have the same specification. The consumer satisfaction survey has been
considered as one of the most accurate mechanism for managing the performance of the
individuals within the business corporation.
3. Policies and procedures
There should be well defined and clearly stated written and oral channels of
communication. The procedure should be strictly followed by each employee working at
Dominoes. In the event of non-occurrence it can lead to disruption, frequent breakouts and
halts, accidents and mishappenings which can be hazardous to both health and safety. Also, it
declines the productivity.
4 Information system
Howsoever, the information keeps a peer view on the day to day dealings of the
workplace. The total sales revenue are entered into a system which later on is compared with
its cost. The information regarding the management of human resource like pay, attendance,
leaves, incentives etc. are also properly recorded. This generates a crystal clear layer of
reliability and trustworthiness.
5. Talent management system
The talent of the workforce in practice is designed to make optimum use of the
resources. Due to the event of the uninterrupted rotating door of people which leaves the
organization along with new entrants, the system is expected to be affected. Generally, low
skill level brings out high revenue ratio creating the excessive burden on human resource
professionals. The right person has to be placed at the right place at right point of time.
6. Change management system
The new ideas and projections are visualized and applied into practical terms at this
stage after checking their sound validity. The transformation begins here to remain
competitive in the market. For e.g.: 30 minutes free delivery scheme, tracking of food online,
various coupons and vouchers, one pizza free on purchase of two etc. (Elmore, 2016).

COMPENSATION AND BENEFIT 9
7. Project management system
The newly embedded plans are designed in the format of the project which is headed
by the experts. It provides a roadmap for the execution of work on practical grounds. Also, it
needs to be highly flexible in nature so that modifications could be made as and when
desired.
8. Risk management system
It takes into account the various risk associated within the working of organisation.
Likewise, the hazard associated with the documentation and requirement of trading in
incongruities with the deceitful activity. Proper checks are curtailed to minimise the degree of
risk.
9. Health and safety system
The cleanliness and hygiene is given due importance at Domino’s units. The food
served should be fresh and healthy in nature so that never it becomes a factor causing food
poisoning. Domino’s makes it obligatory for the staff to excel in food handling certified
course as well. Wearing of hand gloves and hair cap is also must (Altabbakh, AlKazimi,
Murray & Grantham, 2014). Safety measures are regulated so as to restrict any major mis-
happenings or incidental consequences.
Compensation mix and related measures of success
1 Base pay
Segment income approach has been considered as a leading strategy towards the
respective base pay. The distinguished base pay is discussed in detail above. In comparison to
Pizza Hut (rivalry competitor), the former pays employees worthy hourly wages along with
separate overtime charges as well (He, Zha & Li, 2013). The salary range differs as per the
designation of workers. The lower level workers are paid comparatively low because of
insufficient experience and knowledge.
2 Merit pay
There is also the mechanism of pay for knowledge system for internal switching to fill
up the ladder (Bernardin & Wiatrowski, 2013). The extraordinary workers are paid for the
additional efforts exercised on their part in the particular work allotted. However, the
retention rates are very poor on an average basis. Efforts should be inclined more on
employee recognition programs, accessibility of scholarship and occasions for advancement.

COMPENSATION AND BENEFIT 10
3 Indirect pay
These include the non-monetary benefits and perks granted to workers at Dominoes.
Likewise, there are indemnification and medical benefits, fuel and housing welfares. The
program also comprises of retirement income and a savings plan for the individuals and also
for the higher and management authorities.
Goals for the reward and compensation system
The foremost goal is to retain the quality employees with distinguished skills in the
long run. It also boosts the energy and morale of the workforce. The monetary benefits
provide the mental peace and satisfaction. Moreover, the overall productivity is increased
which in turn increases profit as well.
Your recommendations
I would suggest Domino’s needs to maintain the defined benefit pension plan. Also,
the number of perquisites reserved for the highest executive officer’s class should be
maximized in order to retain them for a longer period. There should be the formulation of
total compensation mix wherein minimum wage rate is increased. There shall be the policy of
internal switching within the organization which would cut down the new hiring cost.
Uninterrupted training session and knowledge should be imparted to new skills and
technology. There should be proper feedback system at managerial level. Fairness and
transparency should be there to ensure employee satisfaction and this can be done by making
implementation of some strict norms and regulations such as no discrimination act, fair pay
scale policies and all other basic rights. Moreover, for maintaining transparency the
management staff can involve the low and midde level staff in decision making process.

COMPENSATION AND BENEFIT 11
References
Altabbakh, H., AlKazimi, M. A., Murray, S., & Grantham, K. (2014). STAMP–Holistic
system safety approach or just another risk model? Journal of Loss Prevention in the
Process Industries, 32, 109-119.
Bamburry, D. (2015). Drones: Designed for product delivery. Design Management
Review, 26 (1), 40-48.
Bernardin, H. J., & Wiatrowski, M. (2013). Performance Appraisal. Psychology and
Policing, 257.
Campaign. (2018). Domino’s Pizza news, articles & analysis. Retrieved from
https://www.campaignlive.co.uk/tag/brand-name/dominos-pizza/10676
Careers at dominoes. (2018). Explore Dominoes. Retrieved from
https://jobs.dominos.com/dominos-careers/explore-dominos
Dominoes. (2015). Technology and innovation. Retrieved from
https://www.dominos.com.au/inside-dominos/technology
Domino’s jobs. (2018). History. Retrieved from
http://jobs.dominos.com.au/our-company/history
Elmore, A. (2016). The Future of Fast Food Governance. U. Pa. L. Rev. Online, 165, 73.
Furness, V. (2009). Domino’s pizza – voluntary benefits plan. Retrieved from
https://www.employeebenefits.co.uk/issues/october-2009/case-study-dominos-pizza-
voluntary-benefits-plan/
Grueneberg, S. A., Schneiderman, J., & Chiu, L. Y. (2016). Drafting Franchise Agreements
after Patterson v. Domino's: Avoiding the Minefield of Vicarious Liability and Joint
Employment. Franchise Law Journal, 36(2), 189.
He, W., Zha, S., & Li, L. (2013). Social media competitive analysis and text mining: A case
study in the pizza industry. International Journal of Information Management, 33(3), 464-
472.
International Franchising with Dominoes. (2018). the overview. Retrieved from
https://biz.dominos.com/web/public/international/international-franchising

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Laudon, K. C., & Laudon, J. P. (2016). Management information system. Pearson Education
India.
PayScale, Inc. (2018). The average hourly rate for Domino’s Pizza Employees. Retrieved
from https://www.payscale.com/research/US/Employer=Domino's_Pizza/Hourly_Rate
Syed, I. (2016). SWOT analysis and operation management decisions of Domino's pizza.
Retrieved from https://www.grin.com/document/337519