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Best Laid Incentive Plan

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The Best Laid Incentive Plans

Requirements • To analyse the case on the basis of conceptual frameworks discussed in the class.
• Identify main problem, key issues, alternatives and solution/s for the problem identified.
• The related concepts/frameworks should be explained in detail.

Case Analysis

Executive Summary

The case presents an interesting concept of Organizational Behavior and Performance Measurement Systems.

Hiram Phillips CFO and CAO of Rainbarrel Products introduced some changes and the company posted good results due to the same. Hiram felt that he had single-handedly turned the company's performance around. Some of the changes included cost cutting in budget, staff reductions by 10 %, introducing policies for customer care representatives, on time shipment policy etc. At the corporate executive council meeting, where the cost reductions and operating efficiencies were to be discussed and everything looked positive / rosy, until some questions were raised. Although Hiram’s numbers looked remarkable on paper, there were lots of things that Hiram was unaware of that were detrimental to the company as a whole.

The main problem identified in the case is the shortcomings in the Performance Measurement Systems and the necessity to develop a PMS that meets both organizational and individual needs.

Background facts

In the case, “The Best Laid Incentive Plans”, the Chief Financial Officer of Rainbarrel Products, Hiram Phillips, within a year of his being in the company, makes a lot of changes in the prevailing systems, procedures and processes. Using the broad approach of Corporate Governance and narrow focus on the Contemporary Approach to Strategic Control, the case, “The Best Laid Incentive Plans”, may be analyzed as follows:

In this post-modern society, the emerging business forms are geared on...

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