Blue Flower (pvt) Ltd

Blue Flowers (Pvt.) Ltd -Module 4

Blue Flowers (Pvt.) Ltd is an 8 years old company engaged in manufacturing of high quality artificial flowers to the local and international market.it is situated in a remote area in Moneragala District, with a total workforce of 350.Its products are very well established in local and International outlets. The vision of the company is “To be a leading manufacturer of world class quality artificial flowers in South Asia by year 2015”.

The company operates through functional departments, namely Purchasing Department, Production Department, Sales/Marketing Department, Accounts Department and HR Department. From last year onwards, they have been flowing with steady import orders.

This trend can be anticipated in the coming years as well. In this background, in order to increase the production at least by 40%, the company engaged in implementing an incentive program, where they gave 10%-15% as an additional incentive when they produced more than the original targets given.

After this incentive program was introduced, they ran this for 6 months and evaluated the pros and cons of the incentive plan. The results were as follows.

• Increase production for 1st month was 20%, 30% for the 2nd month, 32% for the 3rd month, 28% and the 4th month, 20% for the 5th month 20% for the 6 month.

At the same time, during these 6 months, the lower quality and rejects rate has increased by about 10-15%.Meanwhile the members of the production department has complained that due to no fault of their and due to slowness of other departments they have to suffer and has requested the management to take steps to remedy the situation.

Also at the same time, about 60% of the production workers have complained about the following through their Trade Unions.

1. The new incentive scheme is a system to exploit their labor.

2. Supervisors are blending the products as rejected or low quality, purposely.

3. The other department people (purchasing, Accounts, Sales and HR) are enjoying more of this incentive scheme.

4. The incentives are not paid on time by Accounts Department.

5. The lower end workers are not reaping any benefits of this incentive scheme.

6. Some managers/supervisors consider workers as machines and expect that level of constant uninterrupted work.

Hence this incentive scheme is not that beneficial to the employees and hence the objection for it. On these grounds, Trade Unions have called a meeting to its members.

At this meeting, about 40% of the production and other department workers were of the view that since this incentive scheme is helping to earn about Rs.1,000/= to Rs.1,200/= extra than earlier ,not to disturb it and let it continue. But the other workers were of in view that this is not an incentive scheme but just another way of exploiting the labor. Hence the Trade Union action should be initiated.

After the meeting the representatives met the management and informed them that this incentive scheme is not that lucrative or equitable when it is compared with the targets given. But the management stance was, if they are not in a position to cater to this increase in order in the future, they are in for a heavy loss and as a result they might even consider an employee redundancy plan also.

As a result of a meetings with the management, the Trade Union requested the following:

1. To reduce the targets to a 30% increase.

2. Instead of an incentive, to add Rs.1, 000/= to their basic salary.

3. To have a maximum of 2 hrs. Over Time per day.

4. To have a system to ensure that product rejection procedure is uniformed and does not depend on the supervisor concerned.

5. To have better working conditions within the factory and generally to increase the other facilities given to workers.

Executive summary

In a very challenging work environment as what we are experiencing today, employee

productivity and contribution are becoming paramount importance to any

organization. Organization provide various forms of financial and non-financial

reward in order to obtain optimum contribution from their employees and these

payments and other benefits encourage and motivation the employees for better and

enhanced performance level.

“Compensation management system is designing, implementing, and maintaining

reword system which are fairly, equitably and transparently across the organization

which is gear to the improvement of organizational, team and individual

performance.”

Compensation management is one of important influencing success of the future

organization. When consider blue flower (Pvt.) ltd company case we can clearly

identify they haven’t proper compensation management syste

In a Challenging environment employee productivity and contribution are become supreme of any organization. Organizations provide various forms of financial and non-financial rewards, in order to obtain contribution from their employees.

These payments and incentives encourage and motivate employees and enhance their performance well.

Compensation management is one of the most important thing of the organization. When consider Blue Flower (Pvt.) Ltd we can identify many issues. They are Communication errors, Employees are uneducated so they understand the language and incentive scheme. They haven’t team spirit and so forth.

I presented some suggestions for eliminate these situations. They are incentive scheme must be very simple because employees are uneducated. Vision and goals should be aligned and so forth.

Q1. What are the management issues