Compensation differences - organizational and personal levels

You are the HR Manager of a retail store with 4 locations within one metropolitan area. The company's sales/marketing strategy have been to be the low-cost leader (i.e. have lower prices than competitors), and therefore the compensation strategy has been 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?

An employee in this organization, Jerome, found out from one of his team members makes a lot more money than he does. He's mentioned this to you and told you he's really "bummed" and doesn't think this is fair. What information can you give him, to help him understand how his salary is determined?

MUST BE 250 WORDS