Reference no: EM133163984

Sugarland Inc. is a mid-sized candy manufacturer in Toronto.  It has 3 divisions - rock candy, chocolate and jellies. The owners, Mr. and Mrs. English, who are absent for most of the year overseas, believed that the rock candy and chocolate divisions were doing OK, but they thought that the jelly division was causing them the most problems.  As the owners wanted to sell in a couple of years, they became concerned about what can be done to turn things around.  The owners authorized an audit of the company and they are now reading the report. They didn't realize things had gotten so bad or that they really hadn't had a good handle on the company's performance.

• Sales of rock candy are decreasing by 13%. Jellies sales are the same as they have been. Chocolate sales have increased by 29%.
• Due to the increased number of chocolate sales, the chocolate production staff have been overwhelmed with orders which they are having a hard time fulfilling.
• The customer service area is constantly dealing with clients whose orders are wrong or were never sent out due to poor paperwork by the sales force, rather than spending their time establishing relationships with their customers. 
• Although the intent of management was to have Customer Service deal with renewals and for them to earn a small bonus on those renewals, the sales team keeps stealing those renewal sales from Customer Service. As a result, there is a lot of hard feelings between sales and Customer Service. No one in Customer Service can earn a bonus from renewal sales.
• Worker's Compensation premiums for the company have increased 19% due to some incidents of poor training by management on the new production line equipment. Managers were reprimanded. 
• A manager in Chocolate division has been accused of sexual misconduct by the production line staff. 
• The HR department has seen an increase in mental health claims, particularly stress-related ones from the production line.  
• Training sessions were provided for the new production line new equipment, although attendance was poor.  Training took place when employees finished their shift for the day and free Timbits and coffee were served. 
• Rumors are flying around the company of a potential sale soon and workers are afraid that the company will be sold or shut down.
• No one wants to work overtime in the chocolate division, even though there are tons of orders to fulfill.
• There are different production lines for each product, but each line uses the same machinery and methods. 
• There's been an increase in the number of maternity leaves being taken, especially among the sales and production staff.
• The jelly division recently won "Best 2022 Jellies" designation from Food of the Month Quarterly and is a contender for "Canadian Best Flavor in Jellies - Orange Delight".
• The company store offering the products to workers is closing for renovations.
• Managers received superior ratings in performance. (They rate each other).  They were seen and overheard celebrating their superior ratings and salary increases at an expensive restaurant. Employees received a cost-of-living increase, but no other increase. 
• Appraisals took place over 1 day for the 300 employees.  Each manager was responsible for 100 employee appraisals. Most were rated either "poor" or "meets expectations" in performance during their 5-minute meeting.  This worked well, as the "merit increase" budget had been used to pay for a lawyer for the manager accused of sexual harassment. 
• The sales force has a base salary of $38,000 and have an unlimited variable incentive commission.
• The current incentive sales plans for the sales force are quite simple:
  • Rock candy sales plan: 2% of all sales made, payable monthly. 
  • Jellies sales plan: 4% of all sales made, payable monthly.
  • Chocolate sales plan: 9% of all sales made, payable monthly.

Mr. and Mrs. English are shocked and dismayed on reading the report.  They believe that they can't trust their own staff to put things right (if they can be) and so have come to your team for concrete suggestions and plans to get them out of this mess.  Unfortunately, Mr. and Mrs. English have just purchased a new yacht and so they don't have a lot of spare cash on hand.  They have allocated for the first year the sum of $100,000, and for the second an additional $50,000. These sums will be in addition to the current compensation budget.  It would be their preference though that you don't spend it.

Your task:

1. Make an Incentive Plan for the company.

2 .  You must ensure that sales increase and that the problems are solved, so that the company is put into a position where it can be successfully sold.

3. You must include a discussion of what you feel to be the major issues as your introduction.  Then you must solve those issues. If a solution is to put any incentive plan in place, you must provide details about how it would work, what it is meant to accomplish, timeframe etc. 

*Be specific.  Be detailed.  This is an HR assignment - solutions should be based upon what you've learned in this course.*