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6. What did the Company do wrong in the design and implementation of the bonus plan?...


6. What did the Company do wrong in the design and implementation of the bonus plan?
7. What steps must Erin take do to fix the bonus problem and, in turn, improve both production levels and at the same time ensure product quality?
Business   Operations-Management   
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Answer #1

Ans 6

Rewards should be aligned with the end goal of the company. The end goal of the company is to provide high quality houses to consumers which delights them within the cost and timelines set by the company

Unfortunately the current reward system is targeted towards increasing the rate of production of the houses which is not the end goal of the company. By focussing on rate of production, other equally important aspects of the company like quality control is being ignored.

Ans 7

Erin should recommend a bonus program aligned towards end goal of the company. The end goal of the company is to provide high quality houses to consumers which delights them within the cost and timelines set by the company.

Thus employees should be rewarded for production and delivery of of high quality houses to clients. This will encourage high production without compromising on quality.

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