Case Discussion: Financial Performance
Measures and Their Effects Las Ferreterias de Mexico, S.A. de C.V. (p. 417)
We
watched a short video(https://www.youtube.com/watch?v=8kIc2Tg-Rds) where
Christina Medland talks about the challenges of designing incentive
compensation plans. As an employee, compensation is an important consideration
of whether to continue in a role or seek a new role. After reading and
reviewing the information presented in the case you should:
- Understand the organizational
structure of the company, the roles and responsibilities of each role. - Understand the key elements of
the new incentive plan and how bonuses are calculated - Page 406 of the text highlights
the advantages and disadvantages of return on investment measures.
Evaluate how Las Ferreterias’ return on investment calculations are
calculated. What are the possible measurement issues and the related
possible behavioral impact on these calculations.
Written Assignment
In the
last paragraph of the case, Mr. Gonzalez wants to anticipate what his manager’s
reactions to the plan would be. Mr. Gonzalez has asked you as a store
manager to feedback about the new incentive plan
Answer
the following individual written questions and submit under the individual
link:
- Thinking about your
responsibilities as a store manager, if you were a store manager at Las
Ferreterias, would you like the new incentive plan? Why or Why not? - As a store manager, what changes
or improvements would like to see. Why?
Note: Your feedback to Mr.
Gonzalez should be clearly supported with facts from the case. Your
reasoning should be well thought and well supported.