Employee Compensation Plan Case Study: Eddie Bee's Ice Cream Company
1. Create a comprehensive list of what you see as the strengths and weaknesses of Eddie Bee’s current compensation plan. In what ways do you believe this compensation plan and each of its elements might be contributing to the problems the company is currently having? What other internal and external factors should be explored?
Wasserman (2009) stated that a compensation plan, whether good or not, has a significant impact on the future growth of the business. Companies use well-designed compensation plans in motivating employees, controlling compensation costs, and ensuring equity to succeed in a fast-paced competitive environment (Business and Legal Resources, n.d.). Well-thought-out compensation plans enable companies to create a sales culture wherein employees deliver high performances and set individual goals in line with those of the whole organization (Wasserman). It is important for companies to review and update constantly their compensation plans to ensure its effectiveness despite the changes in the economic environment. The case of Eddie Bee’s demonstrated the possible consequences of an outdated and ineffective compensation plan.
Eddie Bee’s Ice Cream Company was once “the mid-Atlantic region’s fastest producer of gourmet ice cream pints and quarts”. It was able to provide compensation and benefits for its employees that contributed to the success of the company since twenty-six years ago. However, in recent times, Eddie Bee’s is unable to cope with the emergence of competitors and adapt to the ever-changing palettes of their customers.
Eddie Bee’s compensation scheme formerly was its strength contributing to its prior success. VentureLine (n.d.) defined strengths as factors that make an organization more competitive than its marketplace peers do. One strong point of Eddie Bee’s current compensation scheme is its sufficient provision of various financial rewards such as yearly salary increases and commissions. All the
Wasserman (2009) stated that a compensation plan, whether good or not, has a significant impact on the future growth of the business. Companies use well-designed compensation plans in motivating employees, controlling compensation costs, and ensuring equity to succeed in a fast-paced competitive environment (Business and Legal Resources, n.d.). Well-thought-out compensation plans enable companies to create a sales culture wherein employees deliver high performances and set individual goals in line with those of the whole organization (Wasserman). It is important for companies to review and update constantly their compensation plans to ensure its effectiveness despite the changes in the economic environment. The case of Eddie Bee’s demonstrated the possible consequences of an outdated and ineffective compensation plan.
Eddie Bee’s Ice Cream Company was once “the mid-Atlantic region’s fastest producer of gourmet ice cream pints and quarts”. It was able to provide compensation and benefits for its employees that contributed to the success of the company since twenty-six years ago. However, in recent times, Eddie Bee’s is unable to cope with the emergence of competitors and adapt to the ever-changing palettes of their customers.
Eddie Bee’s compensation scheme formerly was its strength contributing to its prior success. VentureLine (n.d.) defined strengths as factors that make an organization more competitive than its marketplace peers do. One strong point of Eddie Bee’s current compensation scheme is its sufficient provision of various financial rewards such as yearly salary increases and commissions. All the
References: Heartmath LLC. (2011). Employee health benefits more important than employers think. Retrieved from http://w ww.heartmath.com/news/employee-health-benefits-more-important-than-employers-think.html How to reward employees on budget. (2010). Inc. Magazine. Retrieved from http://www.inc.com/guides/2010/04/rewarding-employees-on-a-budget.html Johnson, R Michalowicz, M. (2011). The 3 secrets to extremely loyal employees. Retrieved from http://www.openforum.com/articles/the-3-secrets-to-extremely-loyal-employees Nadel, B. Schieltz, M. (2011). Environmental factors affecting business decisions. Retrieved from http://www.ehow.com/list_6738268_environmental-factors-affecting-business-decisions.html Scorza, J Siciliano, G. (2010). Sales compensation plans - Improve your plan to boost your profitability. Retrieved from http://ezinearticles.com/?Sales-Compensation-Plans---Improve-Your-Plan-to-Boost-Your-Profitability&id=4958648 Slater, S.F Wasserman, E. (2009). How to set up a sales compensation plan. Inc. Magazine. Retrieved from http://www.inc.com/guides/sales-compensation-plan.html