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    The Best Laid Incentive Plan

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    amishaa13
    Hiram Philips implemented a new performance management system at Rain Barrel one year ago that showed positive results. However, the company was now adjusting more slowly than competitors due to a consumer spending slowdown. Hiram took measures to reduce costs like labor and across all units, improve productivity by 50% and on-time shipments by 92%, and better customer service by handling more calls per day with less time spent on each. However, employees found loopholes and critics argued the layoff policy and sales incentives could be improved.

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    The Best Laid Incentive Plan

    Uploaded by

    amishaa13
    55 views6 pages
    Hiram Philips implemented a new performance management system at Rain Barrel one year ago that showed positive results. However, the company was now adjusting more slowly than competitors due to a consumer spending slowdown. Hiram took measures to reduce costs like labor and across all units, improve productivity by 50% and on-time shipments by 92%, and better customer service by handling more calls per day with less time spent on each. However, employees found loopholes and critics argued the layoff policy and sales incentives could be improved.

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    HRM

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    Hiram Philips implemented a new performance management system at Rain Barrel one year ago that showed positive results. However, the company was now adjusting more slowly than competitors due to a consumer spending slowdown. Hiram took measures to reduce costs like labor and across all units, improve productivity by 50% and on-time shipments by 92%, and better customer service by handling more calls per day with less time spent on each. However, employees found loopholes and critics argued the layoff policy and sales incentives could be improved.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    55 views6 pages

    The Best Laid Incentive Plan

    Uploaded by

    amishaa13
    Hiram Philips implemented a new performance management system at Rain Barrel one year ago that showed positive results. However, the company was now adjusting more slowly than competitors due to a consumer spending slowdown. Hiram took measures to reduce costs like labor and across all units, improve productivity by 50% and on-time shipments by 92%, and better customer service by handling more calls per day with less time spent on each. However, employees found loopholes and critics argued the layoff policy and sales incentives could be improved.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 6

    HRM

    THE BEST LAID INCENTIVE PLAN

    Hiram Philips, CFO and Chief Administrator Officer, reported statistics which
    demonstrated positive results of the performance management system
    which was implemented one year ago.
    There was an abrupt slowdown in consumer spending and Rain barrel was
    adjusting less rapidly than its competitors.
    Keith Randall, CEO focused on innovation. He was a Marketing Visionary,
    however the company had no budget integrity under his leadership.
    The company was fat and happy.

    The company had the potential for greatness but lacked the discipline.

    MEASURES TAKEN BY HIRAM


    Reduction in Labour Cost
    Removing the bottom quartile using buyout packages
    Reduction of 10% on all the units (Jack Welschs Philosophy)

    Improved Productivity
    Productivity improved by 50%
    Worst performers names were put on Wall of Shame.

    Increase in On-time Shipments


    Improved customer service.
    Shipment gone up by 92%

    MEASURES TAKEN BY HIRAM

    Better customer service

    Customer service metric

    Number of calls handled by each service rep per day increased by 50%
    Time spent per call reduced from 6 minutes to 4 minutes.

    One single measure established on time delivery


    On time meaning when the product left the company property

    Commission on sales to employees

    Commission to be given only on the actual sale price.


    Commission to be calculated based on number of sales per quarter.

    Importance of straight forward rules and rewards in driving superior performance.

    CONCERNS
    People were finding loopholes in the rules.
    Mindlessly counting patents.
    Company employees being not treated well by the sales representatives.
    Layoff policy had its own loopholes and was criticized.
    No mentoring and no guiding work culture. The only focus became sales.
    Area-wise differentiation was not taken into consideration. Hence, focus
    towards main locations in order to increase sales.
    Customers unsatisfied with the delivery service because of the loopholes in
    the rules.
    Customer call center service was not upto the mark, since there was a
    target of 4 minutes for the call.

    CASE COMMENTARY
    Hiram should not have taken such extreme measures.
    He should have introduced performance metrics by consulting different heads in
    company.
    He should have listened to the employees what they feel about these policies.
    He should have run a pilot programme in a department before running through out
    the organization.
    He should have set high goals and communicated them to the employees. If there is
    a problem in the process, he should have worked on removing the obstacles.
    He should have had feedback loops in place to understand the actual problems
    faced by the people.
    Wall of Shame should be replaced with Wall of fame.
    He should define objective criteria for measuring performance and also test whether
    it captures the true performance that ultimately adds value to the organization.

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