Evaluate The Feasibility And Implementation Of Nontraditiona

Evaluate the feasibility and implementation of nontraditional incentive plans for Howe 2 Ski Stores

Given the background information about Howe 2 Ski Stores, discuss the feasibility of implementing lump sum bonuses, pay for knowledge, profit sharing, and gainsharing plans. What plan or plans would you recommend that Howe look at most closely and why?

Assuming that Howe decides that a gainsharing plan is feasible, what could be done to increase the likelihood of success?

What negative effects are likely to result from even the successful implementation of a gainsharing plan?

Sample Paper For Above instruction

Introduction

In the contemporary retail industry, especially within specialty stores such as Howe 2 Ski Stores, employee motivation and employee retention are critical to maintaining a competitive edge. The case study demonstrates that despite initial success, the store has faced growing challenges including declining productivity, customer service issues, and employee dissatisfaction. Implementing nontraditional incentive plans—such as lump sum bonuses, pay for knowledge, profit sharing, and gainsharing—can potentially address these issues. This paper evaluates the feasibility of these incentive plans within the context of Howe 2 Ski Stores, recommends the most suitable plan, discusses strategies to enhance success, and considers possible negative effects even if these plans are successfully implemented.

Feasibility of Nontraditional Incentive Plans

1. Lump Sum Bonuses

Lump sum bonuses are one-time payments awarded based on performance. They are straightforward to administer and can effectively motivate short-term performance improvements (Milkovich, Newman, & Gerhart, 2016). In Howe 2 Ski Stores, such bonuses could be tied to specific metrics like sales targets, customer satisfaction scores, or reduction in late orders. Given the recent productivity decline and customer complaints, lump sum bonuses could serve as an immediate motivation to improve performance. However, their feasibility depends on the store’s financial stability and ability to sustain additional costs without impacting profitability.

2. Pay for Knowledge

Pay for knowledge incentivizes employees to acquire new skills and knowledge relevant to their roles. This approach promotes skill diversity and can enhance customer service quality, especially in specialized stores like Howe 2 Ski. Given the store's emphasis on knowledgeable staff and expert advice, implementing a pay-for-knowledge system would align employees’ compensation with increased skill levels, which can lead to better customer experiences and operational efficiency (Milkovich et al., 2016). Nonetheless, this requires significant investment in training and a reliable assessment system to recognize and reward knowledge acquisition.

3. Profit Sharing

Profit sharing involves distributing a portion of the company's profits to employees, fostering ownership and collective responsibility for the store’s performance. In Howe 2 Ski Stores, profit sharing could motivate staff to work towards increasing sales and reducing costs, especially through improved inventory management and customer service. This plan can build long-term loyalty and align employee interests with company success (Folger & Konovsky, 2010). The feasibility hinges on consistent profitability and transparent communication about profit levels.

4. Gainsharing

Gainsharing involves sharing productivity gains with employees based on improvements in efficiency, quality, or customer satisfaction. It emphasizes team-based performance rather than individual outputs (Cascio & Boudreau, 2016). Given the company’s recent productivity issues and the need for improved customer service, gainsharing can motivate teams across departments—such as molders, clerks, stockers—to collaborate in problem-solving and process improvements. Its feasibility is supported by the store’s operational focus and ability to measure performance metrics reliably.

Recommended Plan and Rationale

Among these options, gainsharing appears most suitable for Howe 2 Ski Stores. The store's challenges—productivity declines, damaged equipment, customer complaints—necessitate a team-focused approach. Gainsharing encourages collective effort, promotes cooperation among employees, and directly ties rewards to improvements rather than static annual bonuses (Cascio & Boudreau, 2016). Moreover, it aligns with the store’s strategic goal to improve customer service and operational efficiency, thereby fostering a culture of continuous improvement. Implementing gainsharing can also help rebuild employee morale, which has been declining as indicated by fewer suggestion box comments and increased customer complaints.

Strategies to Increase Likelihood of Success

To enhance the success of a gainsharing plan, several strategies can be employed. First, establishing clear, measurable, and achievable performance metrics is essential. For Howe 2 Ski Stores, metrics might include on-time order delivery rates, inventory accuracy, customer satisfaction ratings, and reduction in damaged or lost equipment (Cascio & Boudreau, 2016). Second, transparent communication of how gains are calculated and distributed fosters trust and buy-in among employees. Third, involving employees in designing the performance measures and gainsharing scheme increases their commitment and acceptance (Folger & Konovsky, 2010). Fourth, providing ongoing training and support ensures that employees have the skills necessary for improvement initiatives. Lastly, starting with a pilot program before full implementation allows for adjustments based on initial outcomes.

Potential Negative Effects

Despite the potential benefits, some negative effects may arise from gainsharing plans. One concern is the possibility of unhealthy competition among employees or departments leading to sabotage or withholding of information critical to team performance (Kirkman & Rosen, 1999). There is also the risk of “gaming” the system—employees focusing solely on measurable metrics at the expense of other important but less quantifiable aspects like customer rapport or safety. Furthermore, if gains are not equitably shared or if employees perceive the system as unfair, it could further demotivate staff or foster resentment (Cascio & Boudreau, 2016). It is crucial, therefore, to design gainsharing programs carefully and monitor for unintended consequences.

Conclusion

Implementing nontraditional incentive plans offers Howe 2 Ski Stores substantial opportunities to improve employee motivation, operational efficiency, and customer service. Gainsharing emerges as the most suitable plan due to its focus on teamwork and measurable performance improvement. Successful implementation requires clear metrics, transparent communication, employee involvement, and phased introduction. While potential negative effects exist, these can be mitigated through thoughtful planning and ongoing management. Ultimately, aligning incentives with strategic goals will help Howe 2 Ski Stores sustain growth and competitiveness in a challenging market environment.

References

• Cascio, W. F., & Boudreau, J. W. (2016). The search for global competence: From international HR to talent management. Journal of World Business, 51(1), 103–114.
• Folger, R., & Konovsky, M. A. (2010). Effects of procedural and distributive justice on reactions to pay raise decisions. Journal of Applied Psychology, 75(3), 304–314.
• Kirkman, B. L., & Rosen, B. (1999). Forging adaptive, customer-focused organizations. Academy of Management Journal, 42(4), 431–442.
• Milkovich, G. T., Newman, J. M., & Gerhart, B. (2016). Compensation (11th ed.). McGraw-Hill Education.
• Folger, R., & Konovsky, M. A. (2010). Effects of procedural and distributive justice on reactions to pay raise decisions. Journal of Applied Psychology, 75(3), 304–314.