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Key Problems of Incentive System implemented at Rainbarrel - Assignment Example

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"Key Problems of Incentive System implemented at Rainbarrel" paper states that Performance Management and Incentive Systems are developed to enhance organizational productivity and effectiveness. Economic and financial costs of doing business are reduced thereby resulting in higher monetary gains…
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Key Problems of Incentive System implemented at Rainbarrel
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Download file to see previous pages Hiram Phillips at Rainbarrel Products also implemented a Performance Management System that although resulted in significant cost reductions and cost efficiency, yet it resulted in some severe setbacks that destroyed overall efficiency. Some key customers were dissatisfied with the behavior of workers at different Rainbarrel departments as well as interdepartmental conflicts/disputes had been observed. (Daft, 2009)

The very first problem with the Incentive System was the dismissal of 10% of employees from all the departments at Rainbarrel. As a result, Rainbarrel also lost some of its best employees that were employed and servicing in top-performing departments. Most of the workers that were laid off were of low management level (first-line managers), so the strategy failed to bring any real benefits to the company. Indeed, the costs were reduced after the subsequent decrease in the total number of employees; however, this strategy not only created a pool of scared workers but also made employees unhappy as they were bombarded with additional work across Rainbarrel. In short, employees condemned that top management had reduced its costs at their expense that in turn shattered inter-organizational harmony and unity. The above argument can be endorsed by the fact that both current and retired employees complained about misconduct, unethical behavior and poor treatment by employees at the sales department who refused to cooperate when other workers contacted to garner information about company products or for order placement. In addition, those who were dismissed from Rainbarrel did not receive any financial assistance. (Kerr, 2003)

It should be highlighted that the newly implemented system was relatively strict in a way that workers who would open their emails were required to respond to their clients, partners, etc within 24 hours. Obviously, it was not possible for workers because of the excessive workload. Employees, in response, had realized if they would not open their emails, top management could not charge them for any misconduct or violation of defined rules and regulations. ...Download file to see next pagesRead More
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