Panda Express

Panda Express’s is the company I chose to research this week. Panda Express’s approach to compensation does seem to support their competitive strategy. They offer a higher quality fast food experience while positioning themselves with a price not much higher than ordering a meal from say McDonalds or Taco Bell. The compensation they offer is also above what you would expect to be paid at other fast food establishments. Regular employees can make $20 an hour with the potential for bonuses and managers can make over $60,000 in total compensation a year. Along with the monetary compensation they also offer tuition assistance, vacation time and 401K match up to 4%. Both of these compensation packages are higher than you would see at other fast food establishments. Having superior compensation also helps show that this company doesn’t just say they care about the family’s and the communities they operate in but actually offers better pay so that their employees can be better members of their communities. The fast food product market helps improve the effectiveness of Panda Express’s compensation practices. They have differentiated themselves from lower quality fast food establishments. Being viewed as a superior product and offering higher compensation allows Panda Express to thrive even in a tough product market such as fast food restaurants. They use only fresh ingredients and make the food in an open kitchen. This allows the customer to actually see the cooks prepare the food they are going to eat. The labor market for fast food restaurants is large but has high turnover. Panda Express appears to have much lower turnover than the competition which is largely in part due to the superior compensation package they offer. This saves them money on hiring and training which also helps improve the quality of the service they offer. The company culture appears to be unique compared to competitors. Family and community are important to this business and its employees. Both of these markets combined affect their compensation practices by highlighting them to potential employees. They offer better pay and benefits than the competition in a market where margins are small and turnover is usually high.

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