Posted by: Brandon W. Jones | March 7, 2010

Case Study Review: Sins of Commission

From this case study, it is very evident that the correct compensation system is extremely important to the success of an organization. The case reviewed several instances where the compensation packages in use were set up to put a quick fix in place for a failed system. The compensation system is extremely important because it is one of the main drivers for obtaining and keeping qualified employees. It cannot be the sole source of satisfaction for the employees, but it must function properly to serve the benefit of the system as a whole.

The compensation system will train the employees what is valued by the company. When a company drives for customer satisfaction, but compensates based on the number of sales of the individual employee, the employee will do whatever he or she can to obtain the sale. He or she will not be encouraged to spend time with the customers that are just browsing. On the other hand, in order for the company to obtain customer satisfaction, they must create a system that values customer satisfaction. The system must reward the employees based on the customer satisfaction ratings.

The companies must also set up a system that promotes teamwork within the organization. In the systems where the employees are rewarded based on their individual efforts and not as a team, the group loses unity and becomes several individuals with their own interests at stake. In order for a company to reach its maximum level of success, all the individuals must work as a team. This must be promoted by team awards rather than individual awards.

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