Abc Products Company Cost Savings Program Essay
The task of overseeing the program’s cost savings initiatives will be the responsibility of the Chief Financial Officer executed through tracking of the specific department of functional groups proposals.
The main focus of these initiatives needs to take net profit into account and target a payback period (ROI) of 3 years or less.
The CFO will coordinate with the finance department to assist employees from functional groups calculate cost savings and avoidance opportunities. Incentive Programs:
Instant Awards could be provided for thoughtful suggestions by an individual or group. These instant rewards could include movie tickets, gift cards, or other small novelty items.
The company incentive should be a two tier production based reward.
The base reward should be an annual incentive program based on whether the company as a whole met their annual production or profitability targets. The targeted award should be around 5% of their annual pay.
The second tier although smaller should focus on specific product lines, a geographic area, or function of the business and awarded quarterly based on meeting company approved targets or cost reductions. This incentive should target around 5% of their annual pay, but vary depending on how close they came to their goals.
Additional incentives that could be provided include telecommuting, flex time, or more Paid Time Off awarded by years of service or accomplishments.…