compensation management, In 2001, a Chennai- based two- wheeler major introduced a bonus, Other Management

compensation management, Other Management

Assignment Help:

In 2001, a Chennai- based two- wheeler major introduced a bonus scheme for its employees. Employees
covered under this bonus scheme are evaluated through a three-tier process- (1) meeting production
schedules, 2) maintaining machines, and (3) reducing overtime, scrap and shipping errors. In 2002,
productivity surged, and some employees even added as much as 15 per cent to their paychecks.
The two- wheeler company started facing competition from international players and also was riddled in
patent issues. A court order forced them to stop production of many models, causing significant
manpower restricting successive drop in sales, the company was forced to withdraw the bonus scheme,
and asked employees to be prepared for a financial structure, which would mean a reduction in their
benefits and perks. This message had a highly demoralizing effect on the employees and many efficient
designers and engineers left their jobs to join the competitors. The trade unions also took up the matter as
the workers only faced pay- cut while the senior management remuneration remained unchanged.
A portion of the employee compensation is paid as variable pay, of which bonus is a major part. Other
variable incentives are based on allocated weight age on group target achievement. To rationalize the
compensation cost, the company decided to further switch over to individual performance track record. A
formal announcement to this effect made the workers furious and led to workers protest, resulting in
production loss an a regular basis. The company made it clear to the employees that their behavior would
lead to the closure of the company, which would put them in financial and went on an indefinite strike.
A few months later, the company obtained clearance from the court and the production of all the premium
high- selling brands, which was stopped earlier, could be resumed, as the patent issue was found to be
untenable. The company feels that the whole issue was masterminded by competitors to poach valuable
employees from the company.
Question:
1. Study the case and provide an alternative compensation design, which would redress the problem
faced by the two- wheeler major in Chennai.

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages

compensation management, Other Management

Related Discussions:- compensation management

Manage crisis situation, The most important test of a new organization come...

Need for filing of catalogue entries, Need for Filing of Catalogue Entries ...

Document delivery service, Document Delivery Service: The primary res...

Present level of production, General Components Ltd produces a component ‘...

Discuss the characteristics of an effective leader, QUESTION 1 (a) Comp...

Discuss crm vendors in brief, Question 1 Discuss the stages of CRM impleme...

Individual ministerial responsibility, QUESTION 1 Explain clearly the m...

Factors that influence the level of market interest rate, Question 1 Suppo...

Output of quality assurance process, O u t put of quality assurance proc...

Write short notes on pert, Question 1 The PMBOK Guide addresses four eleme...

Write Your Message!

Featured Services

Online Tutoring

Project Development

Exam Preparation

Course Help

Assignment Help

Popular Subjects

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT