Pay for Performance and Financial Incentives (D): Incentives for Managers and Executives @ DuraCoats

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This document discusses incentives for managers and executives at DuraCoats Pvt. Ltd. It describes how Gambhir Kumar, a sales manager, overachieved his sales targets but was dissatisfied with only receiving a fixed salary without commission. The company head tasked regional managers with designing an incentive program to motivate sales managers and ensure the long-term growth of the organization. The case study aims to understand the importance of fixed versus variable compensation and different types of short- and long-term incentives for managers.

Business

PAY FOR PERFORMANCE AND FINANCIAL INCENTIVES
(D): INCENTIVES FOR MANAGERS AND EXECUTIVES @
DURACOATS
This caselet, fourth in a series of six caselets, is meant to introduce the participants/students to the relative
importance of fixed and variable component of compensation package for Managers. In April 2013, Gambhir
Kumar (Kumar) joined DuraCoats Pvt. Ltd. (DCPL) – a company dealing with production and sales of
protective industrial coatings across the country – as a Sales Manager for the States of Andhra Pradesh and
Telangana. He was a consistent performer who over-achieved the set sales target and was instrumental in roping
in a few very big clients. However, he was dissatisfied, as the company offered him a fixed salary with no
benefit/commission on sales. This concern was communicated to the Company Head, who assigned the task
of designing an incentive program to the four Regional Managers.
Pedagogical Objectives
• To understand the importance of the fixed and variable component of compensation package and the
various types of short- and long-term incentives for Managers
• To discuss the challenge faced by DuraCoats and design an incentive plan to motivate its Sales Managers
keeping in view the long-term growth of the organization
Case Positioning and Setting
This caselet can be used in either MBA or Executive MBA or Executive Development Programs, for the
following module/topic in the Human Resource Management course:
• Incentives for Managers and Executives – To understand the role of incentives in motivating managers
and executives for long-term corporate growth and the various types of incentives suited to them
ABSTRACT
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1. PAY FOR PERFORMANCE AND FINANCIAL INCENTIVES (D): INCENTIVES FOR MANAGERS AND EXECUTIVES @ DURACOATS This caselet, fourth in a series of six caselets, is meant to introduce the participants/students to the relative importance of fixed and variable component of compensation package for Managers. In April 2013, Gambhir Kumar (Kumar) joined DuraCoats Pvt. Ltd. (DCPL) – a company dealing with production and sales of protective industrial coatings across the country – as a Sales Manager for the States of Andhra Pradesh and Telangana. He was a consistent performer who over-achieved the set sales target and was instrumental in roping in a few very big clients. However, he was dissatisfied, as the company offered him a fixed salary with no benefit/commission on sales. This concern was communicated to the Company Head, who assigned the task of designing an incentive program to the four Regional Managers. Pedagogical Objectives • To understand the importance of the fixed and variable component of compensation package and the various types of short- and long-term incentives for Managers • To discuss the challenge faced by DuraCoats and design an incentive plan to motivate its Sales Managers keeping in view the long-term growth of the organization Case Positioning and Setting This caselet can be used in either MBA or Executive MBA or Executive Development Programs, for the following module/topic in the Human Resource Management course: • Incentives for Managers and Executives – To understand the role of incentives in motivating managers and executives for long-term corporate growth and the various types of incentives suited to them ABSTRACT © www.etcases.com

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