seca_ group2_bonuses in bad times
DESCRIPTION
Human Resource Management CaseTRANSCRIPT
Should Superado give its employees a bonus this year?
BONUS IN BAD TIMES
Anubhav Sood – 12PGP009Hymavathi Pavitra K– 12PGP018
Jamal Shahid– 12PGP019Mahesh Kumar- – 12PGP025
Manoj H– 12PGP026Neelima B R– 12PGP029
AGENDA
SUMMARY
ISSUES
ALTERNATIVES
SW ANALYSIS
BEST ALTERNATIVE
04/11/2023
2
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
SUMMARY
Luisa Fernandez
CEO of Superado’s stores.
Jorge Ramos
Manager of the store located in the outskirts of Seville.
Maria Alva
Superado’s Vice President for finance.
Rodrigo Mendoza
Superado’s Vice president of human resources.
Worked closely with Luisa’s dad.
Rosa
Employee at Seville outskirt store for last 10 years
SUMMARY
ISSUES
ALTERNATIVES
SW ANALYSIS
BEST ALTERNATIVE
04/11/2023
3
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
SUMMARY
Superado’s stores business grew from one small store in central Seville into one of Spain’s largest grocery retailers.
More than 1,000 locations across the country.
Steady increases in sales and profits for the past 15 years.
Sales per employee was 20% higher than other supermarkets.
SUMMARY
ISSUES
ALTERNATIVES
SW ANALYSIS
BEST ALTERNATIVE
04/11/2023
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INDIAN INSTITUTE OF MANAGEMENT RAIPUR
SUMMARY
Superado’s bonuses represented one to two month’s pay for most of the employees.
Distinctive offers to Superado employees – Permanent contracts. 85% of workers were full-time. Stable shifts. Generous benefits. Salaries were well above market levels. All employees received management training
SUMMARY
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SW ANALYSIS
BEST ALTERNATIVE
04/11/2023
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INDIAN INSTITUTE OF MANAGEMENT RAIPUR
SUMMARY
Low turnover rate of 3.8% made Superado an outstanding employer.
Most Spanish supermarkets varied prices throughout the year with frequent promotions unlike Superado, which kept its prices low but steady.
Attracted customers because of predictability.
Contribution of Rosa- loose produce sell idea.
SUMMARY
ISSUES
ALTERNATIVES
SW ANALYSIS
BEST ALTERNATIVE
04/11/2023
6
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
ISSUES
Results of 2008 revealed sharp fall in revenue
Employees have met individual targets
Bonus offered under normal conditions is huge
Contradicting opinions from Maria and Rodrigo
Opening of new store by competitor will attract the customers and employees of Superado
Fixed Bonus policy
SUMMARY
ISSUES
ALTERNATIVES
SW ANALYSIS
BEST ALTERNATIVE
04/11/2023
7
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
ALTERNATIVES
Pay regular bonus
Don’t pay bonus
Pay reduced bonus to all
Pay bonus to high performers
SUMMARY
ISSUES
ALTERNATIVES
SW ANALYSIS
BEST ALTERNATIVE
04/11/2023
8
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
SW ANALYSIS
Alternative Strength Weakness
Pay regular bonus
•Will keep up the morale of the employees.
•Motivation & loyalty
•Improvement in performance
•Liquidity problem to run day today finances (paying € 200 million/ € 220 million)
• Need to secure finance for operations
SUMMARY
ISSUES
ALTERNATIVES
SW ANALYSIS
BEST ALTERNATIVE
04/11/2023
9
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
SW ANALYSIS
Alternative Strength Weakness
Don’t pay bonus
•Saving of money for operational requirements.
•Liquidity readily available in case of further contingencies due to economic conditions.
•Discouraging the employees
•People may stick for sometime but they will look for new jobs. E.g. Grand Place giving signing bonuses
SUMMARY
ISSUES
ALTERNATIVES
SW ANALYSIS
BEST ALTERNATIVE
04/11/2023
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INDIAN INSTITUTE OF MANAGEMENT RAIPUR
SW ANALYSISAlternatives Strength Weakness
Pay reduced bonus
•Employees as well as company both will be stable
• Consistent with company’s policy of giving bonus every year since last 30 years
•Employees will appreciate the fact that company is giving bonus inspite of the hard times
•Pay bonuses to people below managerial positions: Managers will easily understand the bonus cut
• Extensive communication behind the motive required, otherwise people will distrust the company
• Company may need to secure external financing if conditions deteriorate
SUMMARY
ISSUES
ALTERNATIVES
SW ANALYSIS
BEST ALTERNATIVE
04/11/2023
11
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
SW ANALYSIS
Alternative Strength Weakness
Pay bonus to high
performing employees
•Differentiate between performers & non performers.
•Even if people leave so those with less performance will be leaving
• May cause insecurity among employees who don’t get bonus.
•Overall employee morale may take a hit as they perceive that performance, and not loyalty is important.
•They will now need to change their bonus policy, after following same policy for 30 years.
SUMMARY
ISSUES
ALTERNATIVES
SW ANALYSIS
BEST ALTERNATIVE
04/11/2023
12
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
BEST ALTERNATIVE
Pay reduced bonus:
Employees already highly motivated- It is already a great place to work
Competitors are also suffering, so employees will be accommodative
Communicate with employees the company’s policy of giving bonus inspite of poor economic conditions
Ask them for innovative ideas like Rosa’s idea: more sales resulting into better bonuses
Bonuses will be increased next year when sales improve
SUMMARY
ISSUES
ALTERNATIVES
SW ANALYSIS
BEST ALTERNATIVE
04/11/2023
13
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
BEST ALTERNATIVE
How to go about it:
If present bonus is 20% then give around 10% - shows appreciation for their hard work
Declare bonus & give them in monthly installations- reduces load on company, meets employee expectation
Executives & Managers can be asked to take cuts in bonus
Frame & communicate new bonus policy – bonus to depend on company’s performance & industrial scenario, not to be considered granted
SUMMARY
ISSUES
ALTERNATIVES
SW ANALYSIS
BEST ALTERNATIVE
04/11/2023
14
INDIAN INSTITUTE OF MANAGEMENT RAIPUR
THANK YOU
04/11/2023INDIAN INSTITUTE OF MANAGEMENT RAIPUR
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