Group 7

Gintong Hiyas

I. Point of View: Elizabeth Santos

II. Problem: How should the incentive scheme be modified in order to foster better relationship
among the staff while maintaining the business’s high profitability?

III. Areas to Consider

1. Expansion of the company by opening 4 new outlets

2. The problems in operations brought by expansion (eg. difficulty in supervising the five
company outlets which resulted to the closing of the original store)

3. Careful staff selection and the training given to the selected staff

4. The bonus incentive system of Elizabeth which was implemented to two of the Gintong
Hiyas stores which were managed by her

5. The appeal of the employees of other Gintong Hiyas stores to implement the same
scheme to them

6. The conflict between the salesgirls not long after the implementation of the bonus
incentive system

7. The idea of Elizabeth wherein “instead of paying the sales girls on the basis of
individual daily sales accomplishments, she would pay all the girls a group bonus on the
basis of accomplishment of the sales quota for the whole store”

IV. Assumptions

1. Whichever alternative bonus policy Elizabeth chooses to implement will still be on a

trial basis on the 2 branches she is managing to see if it will be effective and helpful.

2. The increased profitability of Elizabeth’s 2 branches have increased significantly as

opposed to the remaining 2 branches without a bonus incentive. Therefore, a bonus or
rewards incentive has proven helpful and effective in improving business.
V. Alternative Courses of Action

1. Group bonus upon accomplishment of sales quota for the whole store
This would foster a better relationship among staff in the long run but it may be
difficult at first because clashes had arisen already among them. In terms of sales, this could
maintain the high profitability of the business.

2. Less radical modification of individually based incentive system

This might not solve the conflict among the staff and may not improve their
relationship. In terms of sales, this could maintain the business’s current sales which is
generally high.

3. Removal of the entire incentive system

This would demotivate staff to do their jobs well and worse, it could foster
laziness among them. Establishing better relationship through this is also uncertain but it could
hinder worsening conflict among staff. In terms of sales, there’s also a risk of decrease in sales.

4. Applying the incentive system to all the branches by giving group bonus for the branch
that reaches the highest sales exceeding the quota
This would foster better relationship among staff while maintaining the competitive
nature of achieving the desired incentive. Furthermore, this would make the staff of other
branches happy and motivated since applying the incentive scheme to them is what they really
wanted from the start. Sales will surely increase as compared to their high sales as of the
moment since more employees would be motivated to work harder. However, if a branch wins
consecutively in the competition, other branches’ staff may be demotivated and may stop
working hard.

VI. Recommendation

Even if it may be true that the staff incentive system implemented by Elizabeth failed in
terms of preserving the good relationship of the branch employees, the considerable increase in
the store’s profitability brought about by the incentive system cannot be disregarded. It only
proves that the incentive system must continue and it would be unwise to revert to the system
which the Gintong Hiyas had prior to Elizabeth’s management. However, the staff incentive
system must be modified because it may be beneficial for the company at present but it cannot
be sustainable in the long run. Every company needs a team of employees cooperating with
each other rather than creating conflicts which could lag the company’s progress. For this
reason, the group recommends that the incentive system should persist but instead of fostering
staff competition, the branch competition should be adopted. The procedure of inducing
employees to work under the branch incentive model is the same as the staff incentive system;
the only difference is that the branches are considered as one person or team. The system may
be conducted annually or semi-annually, or by peak or lean seasons depending on the decision
of the management.