MGT501 Human Resource Management Assignment No. 2 Solution Ideas Spring 2014 Due Date: August 03, 2014


A new CEO of a telecommunications company knew that there has to be a better way to get his employees to be more productive. Earlier, this company had a good incentive program that those employees who produced well in accordance with established company goals would receive award at weekly, monthly and quarterly intervals. Something, however, was not working right. It appeared to CEO that after an award was given, productivity would slack off until the next major award was nearing.

The CEO implemented his new system‐one in which no systematic process was in place to provide reward. Rather, he now takes it upon himself to administer the rewards as he sees fit. This means that employees don’t know when they may be rewarded but understand that any reward given is attributed solely to company profitability.

Since its beginning, this unusual incentive plan has resulted in significant changes in the company. Productivity has shot up, while simultaneously work force has shrunk; company sales record are being broken each year; and employees are receiving more reward than ever before. One difference, however, is that these rewards are tailored to the unique needs of each employee; that is, rather than a rigid incentive plan whereby employees receive a similar reward, employees are now afford the opportunity to receive what they want. And what are some of these tailored rewards? One employee got a five‐day, all‐expense‐paid trip to Dubai for the entire family; another got an expensive suit and a set of pearls for his wife; yet another got an expensive Laptop (portable personal computer).

Questions:

1. How CEO has linked his self‐determined reward system to the motivation process? (5‐Marks)

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2. Would you consider new incentive plan to be fair, when one employee can

get a trip to Dubai for the entire family, while another got an expensive

Laptop (portable personal computer)? (5‐Marks)