Our Services

Get 15% Discount on your First Order

[rank_math_breadcrumb]

Incentive Plan Exercise

  


GrowCo Engineering Incentive Plan – C

Performance in the design engineering department of a major manufacturer had been less than satisfactory in terms of adherence to schedule, drawing quality, and the number of “mission-critical” complaints received from operations personnel. In an attempt to address these problems, on December 1, 2022, GrowCo approved a 2023 short-term incentive compensation plan for its engineers. The plan provides the potential for an annual bonus based on individual performance. Engineers are to be evaluated annually on three major factors. Individual factors include (1) adherence to schedule deadlines and (2) drawing quality (opposite of error rate). They will also receive a “group rating” based on the number of major complaints received by the department from operations personnel. 30% of the bonus will be determined by performance to schedule; 50% will be determined by drawing quality; and the remaining 20% will be determined by the number of mission-critical complaints received by the department. The following table summarizes the criteria to be used in determining the bonus amounts:

Performance

Criteria

Criterion

Weight

Threshold

Performance Rating

Target

Performance Rating

Maximum

Performance Rating

Adherence to Schedule

30%

70%

80%

100%

Drawing Quality

50%

90%

95%

100%

Number of Mission Critical Complaints Received by Dept.

20%

5

2

0

Note: Threshold performance is the minimum level of performance qualifying for an incentive award; target performance is the level of performance qualifying for the full incentive award; maximum performance rewards performance above target with an additional incremental incentive payout.

For each criterion, at threshold performance, the individual payout is 50% of target bonus; there is no payout for performance below threshold. At target performance, the individual payout is 100% of target bonus. At maximum performance, the individual payout is 150% of target bonus. Individual payout is adjusted proportionately for performance between these values; that is, payout values are interpolated when they fall between set values. For 2023, the individual bonus target was set at 20% of salary.

1. What would an engineer’s incentive payout be for 2023 if the engineer’s salary is $100,000 and he/she attains target performance for adherence to schedule, a drawing quality rating of 97.5%, and the department receives a total of 3 mission-critical complaints during 2023? Interpolate as necessary. Show all work!

2. What is your evaluation of GrowCo’s incentive plan? That is, what do you like about its design? What do you not like? What would you change if you could? Is it consistent with the principles of individual incentive plans? Explain the reasoning involved in your evaluation.

NOTE: Interpolation is the computation of points or values between points that are known based on their relationship to other known points. For example, if performance is ¼ of the distance between the performance threshold and the performance target, then one might estimate that an incentive payout would be ¼ of the distance between the threshold payout value and the target payout value. See PPT included in this week’s module for additional explanation.

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

Week 7 Discussion Response- Improving Business Performance

   Improving Business Performance Week 7 Learning Resources Landel, R. D. & Timoshin, D. (2001, March 8).  Rise and demise of the innovative entrant . Darden Business Publishing. Note: This resource will be used for this week’s Discussion.

Selection of Company and Problem

Criteria Choose a company from the Fortune 500 list. Your choice must be below the top 100 (101-500) in the ranking at https://www.zyxware.com/articles/4344/list-of-fortune-500-companies-and-their-websites#rank-101-400 or you can utilize Google to find a list of Fortune 500 companies. Determine a business challenge this company faces that could be addressed through business analysis techniques,

DB II

See attached Management Applications of Accounting DB II •   Your initial post should be at least 300 words in length. •   Your initial post should include at least one APA-formatted scholarly, professional, or textbook reference with accompanying in-text citation to support any paraphrased, summarized, or quoted material. Post 2: Response post to

Unit VII Ess

se attached Unit VII Essay Choose a well-known global organization (e.g., Amazon, McDonald’s, Zara, Unilever) that operates in multiple international markets. Research how the chosen organization distributes its products across different markets. Consider both physical (retail, wholesale) and digital (e-commerce, direct-to-consumer) channels. Describe the marketing distribution channels and explain whether

WK2MBA599

SEE ATTACHED Please cite 2 outside scholarly authors. TEXTBOOK: Required Textbook: David, F. R., David, F. R. & David, M.E. (2023). Strategic management: a competitive advantage approach, concepts and cases (18th ed.). Upper Saddle River: Pearson. ISBN: 9780137897667 Develop a Competitive Matrix for McDonald’s Textbook Learning Exercise 3B Steps 1-3

Business & Finance homework

HSE470 Legal Issues of Security 1 of 2 1/3/2021, 12:51 PM HSE470 Legal Issues of Security 2 of 2 1/3/2021, 12:51 PM

Business Finance – Management homework

see attached HOMEWORK 1: 5 pages with 2 references Instructions: This homework assignment is meant to ensure understanding of the material contained within the module and reading assignments. Utilizing information contained within the module, text, and additional research, answer the following questions. 1. Describe each part of the DMAIC model.

share your definition of critical thinking

share your definition of critical thinking. Give an example of how you have utilized critical thinking in the workplace. In addition, search the open job listings on the web. Identify and post one new open position that requires business analysis skills. Cite the source about the job opening. Describe and

BUSINESS( NO PLAGARISM A+ WORK, ON TIME)

3 business economics questions 1. ASSIGNMENT ( NO MORE THAN 300 WORDS) Why study managerial economics? The most important task of a business manager is to make decisions. Decisions are the means by which organizations turn ideas into action and can have a positive or a negative impact. However, decision

Journal Article 1

See attachments  BUSI 613 Journal Article Review Assignment Instructions Overview MBA programs around the country are starting to require their students to become more effective writers. This is in response to industry’s urging for grad schools to improve the writing skills of graduate students. Writing at the MBA level should

Prof Double R

 Electronic Health Record  Answer the following questions: What is an EHR? What types of information are found in an EHR? Who manages an EHR? How is it used? Does an EHR follow the patient to other health facilities? Explain.

Microeconomics 6

Assignment in attachment  1. The following graph shows a firm operating in a monopolistically competitive market. How many haircuts will the firm perform in the short term, and at what price? At this point, what will its total revenue, total cost, and total profit be? Given your answers, what would

Microeconomics 7

Assignment in attachment  1. What are the four most important ways a firm becomes a monopoly? Will a monopoly that maximizes profit also be maximizing revenue? Will it be maximizing output? Explain. 2. Assume the graph below represents the market for a monopolist. What quantity will the monopolist produce, and

Microeconomics 2

Assignment in attachment  1. The graph below represents the market for flank steak in a specific town. Calculate the value of consumer surplus: A. When the market price is allowed to prevail, and B. When the town passes a law setting a price ceiling for flank steak of $13 per

MBA 699 4-2 Milestone 2

   1. Current employee demographics: Summarize the current employee demographics for the organization from the course scenario. a. Use Tableau to visualize the demographic data such as age, sex, marital status, education, and experience, and include the corresponding screenshots in your summary. Choose the graphs or charts that are best

HRM 6301 III

1 Three Keys to Success Joshua A. Learner Columbia Southern University LSS 1300: Learning Strategies for Success Dr. John Doe July 10, 2020 SAMPLE FORMAL ESSAY The title page includes the title of the assignment in bold font, the student’s name, the name of the university, the course name, the