Opportunity | A $300 million privately held plastics manufacturer saw increased employee productivity as the key to greater profitability. Unfortunately, previous investments in incentive plans that were designed to align rewards with individual performance measures failed to achieve the desired impact. In fact, the narrow focus on individual employee productivity led to deterioration in customer service and product quality. As a result the company was unable to reduce costs, increase efficiency and improve overall quality of execution.
Approach | After helping management clarify the key drivers of business value a cross-functional team designed a team-based program that truly supported management’s long-term business strategy. A multi-level base pay structure was implemented; one that paid different rates depending on each team member’s applied skills, flexibility, teamwork and productivity. In addition, a new group incentive plan that rewarded quality and on-time delivery and efficiency was implemented. To ensure a smooth transition, our team and management worked hard to clarify and communicate the business case for change, the transition plan, and the details of the new pay system. Skeptical employees quickly were won over.