A company’s mission, vision and values must be aligned with the company strategy

Question

A company’s mission, vision and values must be aligned with the company strategy. Then each of the functional areas of the company have their own strategies that align with the overall company strategy. In this Assignment you will explain how a company can link their compensation and performance evaluations to the organization’s innovation objectives. Read the case study below, and respond to all the checklist items.

Case Study: Evaluations, Compensation, and Firm Objectives

Midwest Toys is a toy maker that has as its mission, “Our purpose is to expand the minds of children 1 month–100 years old.” Currently they use a product development strategy, but believe that maybe they need to orient their company towards an innovative strategy.

Their current objectives are to:

Invent 10 new toys every year and reinvent at least 10 more.

Increase revenues by 15% per year.

Employ motivated and committed workers.

Provide safe and intellect expanding toys for everyone.

Midwest Toys has operated as a medium-sized company for about 20 years. Their compensation to date has been based on longevity at the company. The evaluations were performed by their managers after reviewing their results based on: (1) their influence on increased department product output (75%) and (2) increased department sales (25%) at the end of the year. With the increasingly mechanized and digitized toys, and now robotics involved in toy making, many employees have been let go or offered early retirement due to their obsolescence.

The new objectives in line with the new innovation strategy include:

- Enhance attributes and convenience in at least 20 existing products

- Launch at least 15 new products that appeal to new customers and new markets

- Develop 5 new markets

- Hire personnel that think innovatively

- Hire diverse support personnel and designers who are customer service oriented to support new products and markets

The 200 remaining employees are beginning to worry and feel their compensation and evaluation process needs an overhaul.

Explain how Midwest Toys can link their compensation and evaluations to the company’s new objectives and innovation strategy.

What methods of performance evaluation might they use? Why?

Provide your minimum 2-page (i.e., 500-word) expository essay in APA format

Explanation / Answer

The challenge before the company is to remain competitive in wake of rapid technological development and its growing influence on the toy industry, particularly which also inlcude a play way learning. The company needs to change in terms of technological aspects of the toy, while retaining the original character of the product and basic philosophy behind them, in order to meet the needs of the customers whose needs have changed. For this, it needs the new age innovative and technological capability ( hiring the new persons) and retaining its basic product essence ( through old employees who have been instrumental to the success). The difference between these two sets of employees is only the comfort with technology and innovation, which can be reduced by the use of effective training and development of old employees. After this exercise, independant functional teams may be formed with a balance between the new and experienced employees.

The compensation structure-

Fixed pay = 40% and Variable pay = 60%

Out of the variable pay, half will be determined through team efforts while remaining half will involve individual evaluation.

Team Effort -30% will be evaluated through one or more of these ( depending upon task responsibility)

(a) Degree of innovation exhibited through intellectual output in products and practices

(b) Sales effort, exhibited through increase in sales figures

(c) Competitive advantage through better customer service, evaluated through feedback and reviews.

(d) Cost efficiency showed through adoptation of lean manufacturing and business practices.

(e) Improvement of strategic position in the marketplace through corrective actions, exhibited through market share.

(f) Other relevant factors.

Individual evaluation- 30%

(a) Personal drive,motivation, efforts and dedication towards the work.

(b) Interpersonal behaviour at work.

(c) Ethical conduct and compliance to the laws

(d) Leadership skills

(e) Innovative quotient.

(f) Performance levels

(g) Feedback from subordinates.

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