Reference no: EM132926702

Let's assume a FMCG company that stands for fast-moving consumer goods, which evaluate employees' performance based on the financial year "July-June". The performance evaluation score of the employees are used to determine the incentive plan for the employees. The performance score and incentive plan for this company are given below:

Performance Score Incentive based on the basic

95+ 120%

90+ 100%

85+ 80%

70+ 60%

60+ 40%

50 or more 10%

Less than 50 0%

The revenue of FMCG companies largely depends on their sales-volume. Because of this pandemic, the company is estimated to sales decline by 30% in the current year, which definitely affects its liquidity position (available cash to pay immediate liabilities) and profit negatively. In this situation, (1) Should the company evaluate the performance of employees for this year based on the performance appraisal scorecard? Justify your position (evaluate/not evaluate) with its possible impacts on employee behaviour.

(2) Assume that the company has decided to evaluate the performance of the employees in this year. Should the company give incentive bonus based on this exiting incentive-plan? What are the possible options (mention at least 3 options) the company may choose to give incentive bonus considering its weak liquidity position and profitability? What would be possible impacts of each option?