Saturday, August 10, 2019
Case study Essay Example | Topics and Well Written Essays - 2000 words - 4
Case study - Essay Example As part of the consultancy services, the bank has found three major underlying problems that led to the issues faced by Hole in the Wall. They are namely, equating performance of the employees with their pay, isolating employees from collaborating and preventing innovation in the process and avoiding conflict management leading to unsettled quality issues and personal enmity. The report analyses the three root problems in details, explores a host of possible solutions for eliminating the problems and recommends the best possible solution to the company for implementation. Equating performance with pay The salesmen are paid exclusively by the commission per window sold, which is often sacrificed while negotiating with clients. The production and fitting teams are also paid based on the number of windows produced and fitted respectively. While this model of compensation is aimed at motivating employees, it leads to unstable salaries, unhealthy sales model and shoddy workmanship (Solomo n and Podgursky, n.d.; Hamel, 2013). To earn maximum commission, the salesmen make unrealistic promises to too many customers without co-ordinating with other units and then to commit to these orders, components are procured in a rush and windows are produced as early as possible, leading to substandard products made from substandard materials. As a result, windows are sent back to the factory for rework, thereby increasing the number of unsatisfied customers. Also, since sales are low during recession, numbers of windows fitted are also less, which leads to falling income of the fitting team, perhaps which is why one of the three fitting teams quit. There are two salary models that can replace performance-based pay and eliminate its consequences: a fixed salary and a hybrid salary. In a fixed salary structure, the employees are paid a consistent remuneration every month. This means they do not have to worry about the financial hardships that their families will go through in the ev ent of bad performance in a particular month due to low sales, economic recession or poor market conditions. This creates stability in income and uniformity in the quality of life, thereby giving a feeling of financial security and contention to the employees. It also boosts productivity as they have more time to focus on work and no worries to make ends meet. In a hybrid salary structure, the employees receive a minimum base pay every month that creates stability in income and uniformity in the quality of life, just like a fixed salary structure. However, outperforming employees also get additional variable income based on their performance, such as, higher sales, more units worked upon or overtime hours done at the factory. Therefore, if an employee wishes for a pay raise besides the regular appraisal, he or she may do so simply by giving a little more attention to work instead of looking for another job with higher salary. It also improves the companyÃ¢â¬â¢s performance without pressurising employees to deliver more (UC San Diego, 2013). While both the pay structures can solve the present problem of inconsistent monthly remuneration and unhealthy race against time to earn more, the hybrid pay structure seems much more viable for Mr. Barker.