Blue flowers (Pvt.) Ltd is an artificial flower manufacturing company situated in Monaragala with 350 total workforces. It provides artificial flowers for local and international markets. This has five functional departments namely Purchasing, Sales and Marketing, Production, Accounting and HR.
They got a decision to increase production in 14% by last year onwards and an incentive program also implemented. When the carder produces more than the original target, company granted 10%-15% additional incentive.
After 6 months company had evaluate their pros and cons and results was as follows,
1st month - 20%
2nd month -30%
3rd month -32%
4th month -20%
5th month -20%
6th month -20%
Lower Quality and Rejection Rate – 10%-15%
After implementing this incentive program production employees complained that the reason of this problem is the slowness of other departments, and also 60% production employees were complained their objections through their Trade Unions. After that TUs called a meeting to its members. 60% employees said that this is not an incentive scheme but just another way of exploiting labor and they suggested a TU action. Then TU representatives met management and informed them that this incentive scheme is not lucrative or equitable. But management said that if they are not in a position to carter to this increase in order in the future, they are in for a heavy loss and as a result they might even consider an employee redundancy plan also. After this meeting trade unions requested some conditions also.
In this case we can identify several Management issues which influenced for the smooth functioning of the company. Those issues as follows;
Organization decided to increase their production and implement an incentive program for employees who had produce more than the original target given. But they did not screen the internal and external environment before implement this production and