Diagnostic Products Corporation Case Analysis
In this case analysis, we will be discussing the Diagnostic Products Corporation (DMC) Performance Bonus Program. In examining this program, we will evaluate it as a whole and how it is currently being implemented. After doing this, we will offer any suggestions we feel will enhance this compensation method. Following this, we will look at alternatives to the bonus compensation option. This will include cultural, personnel and action controls. Lastly, we have structured an ethical analysis of the hypothetical situation Joe faced at DMC.
Performance Bonus Program: Implementation & Recommendations
Evaluate the Performance Bonus Program as it currently exists and the way it is being implemented. What changes would you suggest, if …show more content…
This encourages FSEs to work efficiently and finish their jobs in a timely manner. However, the points part of this system are not currently attached to monetary compensation and are just being collected by FSEs with no reward in sight. This is a problem as employees are beginning to feel that they are being held accountable for something that is not real. DPC should look to attaching awards to these points as soon as possible. DPC had suggested three awards based on points accumulated. These are as follows: invite top FSE to annual sales meeting held in Hawaii or Arizona, awards plaque, monetary awards and/or mention in the service newsletter. We believe that implementing some sort of monetary award combined with recognition will be the best alternative. Employees have responded well in the past to monetary rewards. It has also been found that employees who are recognized for their hard work, feel appreciated and become more determined to continue these efforts. These two forms of compensation will help keep motivation of the FSEs …show more content…
He then should have gone back to DPC and explained the situation to them so that they knew ahead of time what happened. The company may have decided to give Harvey a discount on his next purchase. Joe should have presented Harvey with the satisfaction survey upon completion of the job. He still should have taken him out for dinner, since it is important to maintain the relationship, especially when the customer is unhappy. The survey or the work that took place should not have been discussed at the dinner.
1. Cross training: awarded 10 points for each instrument the FSE was able to service
• (4 instruments = maximum of 40 points).
2. Preventative Maintenance (PM) completion: awarded 2 points for each PM completed on time.
3. Teamwork factor for PMs: awarded to each FSE in a region that met specified PM goals for a quarter.
a. 90-96% completed - 1% of base quarterly salary + 5 points
b. 97-100% completed - 2% of base quarterly salary + 10 points
4. Complete first visit: awarded to FSEs who completed service events on the first day of the visit. a. PMs: 90-99% completed - 2-11 points
b. PMs: 100% - 20 points
c. Repairs: 85 -95% - 1-11 points
d. Repairs: 96 -98% - 18-20 points
e. Repairs: 99 -100% - 24-25