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BONUS IN BAD TIMES Should Superado give its employees a bonus this year?

Anubhav Sood 12PGP009 Hymavathi Pavitra K 12PGP018 Jamal Shahid 12PGP019 Mahesh Kumar- 12PGP025 Manoj H 12PGP026 Neelima B R 12PGP029

AGENDA
SUMMARY ISSUES ALTERNATIVES SW ANALYSIS BEST ALTERNATIVE
INDIAN INSTITUTE OF MANAGEMENT RAIPUR 3/18/2013

SUMMARY

Luisa Fernandez

SUMMARY

CEO of Superados stores.

Jorge Ramos

ISSUES

Manager of the store located in the outskirts of Seville.

Maria Alva

ALTERNATIVES

Superados Vice President for finance.

Rodrigo Mendoza

SW ANALYSIS

Superados Vice president of human resources.

BEST ALTERNATIVE

Worked closely with Luisas dad.

Rosa

Employee at Seville outskirt store for last 10 years


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INDIAN INSTITUTE OF MANAGEMENT RAIPUR

SUMMARY

SUMMARY

ISSUES

Superados stores business grew from one small store in central Seville into one of Spains largest grocery retailers.

ALTERNATIVES

More than 1,000 locations across the country.


Steady increases in sales and profits for the past 15 years.

SW ANALYSIS

BEST ALTERNATIVE

Sales per employee was 20% higher than other supermarkets.

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

3/18/2013

SUMMARY

SUMMARY

Superados bonuses represented one to two months pay for most of the employees. Distinctive offers to Superado employees

ISSUES

ALTERNATIVES

SW ANALYSIS

BEST ALTERNATIVE

Permanent contracts. 85% of workers were full-time. Stable shifts. Generous benefits. Salaries were well above market levels. All employees received management training
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INDIAN INSTITUTE OF MANAGEMENT RAIPUR

SUMMARY

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.

ISSUES

ALTERNATIVES

SW ANALYSIS

BEST ALTERNATIVE

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

3/18/2013

ISSUES

SUMMARY

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
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ISSUES

ALTERNATIVES

SW ANALYSIS

BEST ALTERNATIVE

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

A LTERNATIVES

SUMMARY

Pay regular bonus Dont pay bonus Pay reduced bonus to all Pay bonus to high performers

ISSUES

ALTERNATIVES

SW ANALYSIS

BEST ALTERNATIVE

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

3/18/2013

SW ANALYSIS
Alternative Strength Will keep up the morale of the employees. Pay regular Motivation & loyalty bonus Improvement in performance Weakness 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

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

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SW ANALYSIS
Alternative Strength Weakness
the

SUMMARY

ISSUES

Saving of money for Discouraging operational requirements. employees Dont pay bonus Liquidity readily available in case of further contingencies due to economic conditions.

ALTERNATIVES

SW ANALYSIS

People may stick for sometime but they will look for new jobs. E.g. Grand Place giving signing bonuses

BEST ALTERNATIVE

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

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SW ANALYSIS
Alternatives Strength Weakness Employees as well as Extensive communication company both will be stable behind the motive required, otherwise people will Consistent with companys distrust the company policy of giving bonus every year since last 30 years Company may need to Pay reduced Employees will appreciate secure external financing if bonus the fact that company is conditions deteriorate giving bonus inspite of the hard times Pay bonuses to people below managerial positions: Managers will easily understand the bonus cut
INDIAN INSTITUTE OF MANAGEMENT RAIPUR 3/18/2013

SUMMARY

ISSUES

ALTERNATIVES

SW ANALYSIS

BEST ALTERNATIVE

12

SW ANALYSIS
Alternative Strength Weakness

SUMMARY

ISSUES

ALTERNATIVES

SW ANALYSIS

BEST ALTERNATIVE

May cause insecurity among employees who Differentiate between dont get bonus. performers & non Pay bonus performers. Overall employee morale to high may take a hit as they performing perceive that performance, employees Even if people leave so and not loyalty is important. those with less performance will be leaving They will now need to change their bonus policy, after following same policy for 30 years.
INDIAN INSTITUTE OF MANAGEMENT RAIPUR 3/18/2013

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B EST

ALTERNATIVE

SUMMARY

Pay reduced bonus:

ISSUES

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 companys policy of giving bonus inspite of poor economic conditions Ask them for innovative ideas like Rosas idea: more sales resulting into better bonuses Bonuses will be increased next year when sales improve
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ALTERNATIVES

SW ANALYSIS

BEST ALTERNATIVE

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

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B EST

ALTERNATIVE

SUMMARY

How to go about it:

ISSUES

If present bonus is 20% then give around 10% shows appreciation for their hard work Declare bonus & give them in monthly installationsreduces load on company, meets employee expectation Executives & Managers can be asked to take cuts in bonus

ALTERNATIVES

SW ANALYSIS

BEST ALTERNATIVE

Frame & communicate new bonus policy bonus to depend on companys performance & industrial scenario, not to be considered granted

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

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THANK YOU

INDIAN INSTITUTE OF MANAGEMENT RAIPUR

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