Nucor Company Case Study

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Management Control
Nucor Company

1. With the given data, I received a bonus on the following months: February, March, and June with a total of P 3,055. I saved the company a total of P 2,750.

a.) Starting over again with the given data, I would simply strive to meet the budget and receive the P 1,000 incentive. The 2% additional bonus of the amount saved is too low an incentive and would hardly motivate me to save more for the company.

b.) The P 1,000 fixed bonus for merely meeting the budget is too high. With the past data, Total Savings amounted to P 2,750, while bonus payout was P3,055. The company savings became irrelevant and even had to pay an extra P350 bonus. My recommendation would be to grant supervisors a 50% bonus on the amount saved for each period.

2. With the given results of all 6 weeks, we review each manager’s payment with the three methods:

Dave
Method X total: $1,536
Method Y total: $1,680
Method Z total: $932

Nick
Method X total: $1,464
Method Y total: $1,680
Method Z total: $908

Sid
Method X total: $1,440
Method Y total: $1,680
Method Z total: $1,800

Dave’s tally for each week has great variance, which translates to his lack of motivation for meeting the norm of $600 a week. Having chosen a flat wage would be consistent to his behavior, so he would have chosen Method Y.

Nick’s tally for each week is more consistent than Dave’s, with an effort of meeting the $600 norm per week target. Although Method Y gives a larger pay, his weekly behavior results indicates that he chose Method X.

Sid’s tally each week always hits the $600 norm, which translates to his objective of getting the bonus of $300 a week. Although he could have increased his earnings by going below the norm, he seems content with receiving a weekly pay of $1,800. Sid chose Method Z. 3. The first important objective with regards to...
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