The Case of the Unpopular Pay Plan

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The Case of the Unpopular Pay Plan is a Harvard Business Review Case study that looks into various leadership styles.

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  • A – Autocratic 2Ask team members for information & make decisionDon’t tell them why the information is needed.B – Consultative 1Inform Team & may ask opinions.Decision is made by the leader only.C – Consultative 2The leader is responsible for the decision.Discuss as a group.D – CollaborativeThe leader facilitates the discussion.Helps the team come up to a decision.
  • The Case of the Unpopular Pay Plan

    1. 1. The Team Mona Siddharth R SumedhaSharma Sharma Robin Agarwal Vivek Mehta
    2. 2. Introduction Decision Making Styles Our Style – Consultative The Case StudyAgenda Group Rankings & Inferences CEO Rankings & Inferences Takeaways – Self Takeaways – Others Example of a Mix of Styles
    3. 3. IntroductionTop Chemical Company is a 93-year old , $2 billioncompany.QFA (Quality For All) program was launched at TopChemin order to make real changes in the way people work – tomake progress in speeding production marks, improvingproduct quality and routing out efficiencies.Meeting held to investigate how to develop a pay systemcongruent with the philosophy of QFA.“QFA PAY PLAN 92” :BASE PAY = 75% of former pay –determined by internal equity ,FLEXIBLE PAY = 25% offormer pay.Different people and departments have different outlooks.
    4. 4. Decision Making StylesCONSULTATIVE AUTOCRATIC COLLABARATIV E B - CONSULTATIVE
    5. 5. Consultative Style Information Gathering & Leader takes the decision Askindividual opinions Take your own decisions
    6. 6. “I developed a set “I presented my of recommendations recommendations” to the team”CEO Speaks“Robin Agarwal” “I took a Final call on “I Asked them for the their recommendations – recommendations / Stick to my own or suggestions” modify to suit the team ?”
    7. 7. The Participants Robin (CEO) Sumedha (TM)Mona (TM) Sidd (TM) Vivek (TM)
    8. 8. CEO Recommendations• Re-evaluate the objective!• If a plan has to be included, the workforce needs to be educated.• Plan should be made according to the people’s compensation team. Gain- Sharing model suggested.• Non-financial motivation to be used.
    9. 9. Team Recommendations • Tweak the Pay Plan. Segregation of the workforce. • Divide the workforce into backend and frontend. • Backend - 4 % Variable Pay. Frontend - 10 % Variable Pay.• Segregation of the workforce. 10 % Variable Pay.• 5 % Company Stock Options.• 5% team Performance. • Segregation of the workforce. • Flat 10 % Variable Pay. • Teams should get incentives over 10% according to their performance.
    10. 10. Final RecommendationsSegregation to be implemented.Flat Variable Pay of 10 %.Teams should get incentive over & above this 10%.Different compensation benchmarks fordifferent departments.
    11. 11. Group Ranking
    12. 12. Comfortable Fair, Just & Equitable Considerate Enjoyed Working Understanding ConsultedCertain members may not feelthe above
    13. 13. CEO Ranking A B C D Autocratic Consultative Consultative1 2 CollabrativeComfort+ level+ with+ team+members 5.75 6.75 6.5 5.75Fairness+ decision+ of+ making+methods 5.75 6.50 6.50 6.25Consistency+ decision8 of+ making+procedure+with+leadership+ style 5.50 6.00 5.50 5.75Level+ enjoyment+ of+ while+working+ with+ group 6.00 6.50 6.75 6.00Influence+ group+ of+ members+on+the+ final+ decision 5.00 5.25 4.50 6.00Satisfication+ among+ group+ with+the+decision 5.75 6.25 5.50 5.25Understanding+ the+ of+ group+over+ the+ decision 6.25 6.50 5.75 5.50Comfort+ level+ with+ leadership+style 5.75 6.50 6.50 5.75Level+ commitment+ the+ of+ of+group+ members+ for+the+process 6.50 6.25 5.50 5.75Incorporation+ members+ of+input+into+decision 5.00 6.00 5.75 6.25Felt+ a+ as+ part+ the+ of+ group 6.25 6.50 6.25 5.50Level+ understanding+ group+ of+ of+member+ about+ the+rationale+of+the+decision 6.25 6.50 6.00 5.50Level+ belief+ group+ of+ of+members+ the+ in+ decision 6.00 6.75 6.50 5.50How+just+ and+ equitable+ was+ the+approach+ the+ of+ leader 6.00 6.50 6.25 6.50
    14. 14. Comfortable with style Consistent High Group Satisfaction Enjoyed Working High self contribution Group members beliefGroup member influence wasminimum
    15. 15. Takeaways - Self1. Preparedness  Leader encourages the team to excel2. Preparedness  Members helps the leader to believe in the team3. Involvement of each individual helps in:  Generation of new ideas for the leader  Chance for everyone to have a say4. Since the final decision is taken by the leader individually, it can lead to certain discord in team5. Decision making styles are driven by the individual’s personality6. Personality of an individual can make the leader to change his/her decision making style
    16. 16. Takeaways - OthersScores are almost equal :- Flaws in the process and noteveryone has followed the rulesCOLLABARATIVE !!
    17. 17. Autocratic 1A Satisfied/wt/final/decision Incorporated/member`s/suggestions Leader 6 6 Participant/#/1 6 6 Participant/#/2 7 Takeaways - Others 6 Participant/#/3 5 6 Participant/#/4 7 6 Participant/#/5 7 7 Group& 2(A Satisfied/wt/final/ Incorporated/ decision member`s/suggestions Leader 6 5 Participant/#/1 6 7 Participant/#/2 6 7 Participant/#/3 7 6 Participant/#/4 7 6 Participant/#/5 7 7AUTOCRATIC !! 6.6 6.6Decision making styles are driven by the individual’spersonality which affected the feedback from the team CollobrativeInference from the data: Consultative method scored highest Enjoyed& decon both fronts – CEO & with& Fair& Group& 8(B Comfortable&Groups methods& in& working& with& Implementa to team decision& making tion& grp by& Team Leader 7 7 7 6
    18. 18. MIX OF STYLES
    19. 19. THANK YOU !!

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