case 4

Topics: Motivation, Performance appraisal, Management Pages: 11 (2054 words) Published: June 17, 2015
Executive summary
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, Production increased

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.

Problem Statement
In this case we can identify several Management issues which influenced for the smooth functioning of the company. Those issues as follows; Issue 1
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 incentive scheme. They did not done feasibility study, SWOT analysis or a PESTEL. Issue 2

There was no any awareness program for employees about those production targets and incentive schemes. There was no any target group identification or Job evaluation. Incentive was given without any Performance evaluation therefore other department people (Other than Production dept.) were enjoyed more of this incentive scheme. Issue 3

Incentive scheme was not lucrative and not equitable. And also it was not conducted in a proper manner. Lower level workers were not reaping any benefits of this incentive scheme.

Issue 4
Given target is not SMART (Specific, Measurable, Achievable, Realistic, Time bound) They only announced to employees that production must be increased by 14%. They did not specify individual goals and objectives or Team goals and objectives. They express organizational goal and tried to achieve it through an incentive scheme. They should have to inform employees through a job description but they didn’t.

Issue 5
Some managers and supervisors considered employees as machines. Also there were biasness in branding low quality and product rejections. In the meeting which held between management and Trade Unions management said that if employees were not in a position to this increase in order in the future, they were in for a heavy loss as a result they might even consider an employee redundancy plan also.

There was no any interrelationship between management and employees. Management implements decisions without having employee’s collaboration. Therefore Trade Unions can influence.

Recommendations with Literature Review
Issue 1
There was no any feasibility study. No any internal or external environmental study. Both internal and external environmental factors are widely influence for the organizational functions. Before take any strategic decision organizational management should scan the internal and external...
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