Read the case study given below and answer the questions given at the end of the case study.

Team-Based Compensation Is it a good idea?

One of the first things Abdullah Muhamad wanted to do in his new position at Green Technology Sdn Bhd was to improve productivity through teamwork at every level of the company. As the new HR manager, Abdullah started to change the culture to a team-based approach.

Abdullah started by installing the concept of team management at the highest level, to oversee the operations of the entire company. The new management team consisted of manufacturing, distribution, planning, technical and human resource managers. Together they developed a new vision for the 400-employee company, which they expressed in the simple phrase "Excellence Together." They drafted a new mission statement for the company that focused on becoming customer driven and team-based, and that called upon employees to raise their level of commitment and began acting as "owners" of the company.

The next step was to convey the team message to employees throughout the company. The communication process went surprisingly well. Abdullah was happy to see his idea of "workforce of owners" begin to take shape. Teams trained together, developed production plans together, and adopted the technique of 360-degree feedback appraisal, in which an employee's performance evaluation is obtained from supervisors, subordinates, peers, and external and internal customers. Performance and morale improved, and productivity began to move upwards. The company even sponsored occasional celebrations to reward team achievements and the team structure seemed firmly in place.

Abdullah decided to change one more thing. The company's long-standing policy had been to give all employees the same annual pay increment. But Abdullah felt that in the new team environment, outstanding performance should be the criterion for pay raise. After consulting with the CEO of the company, Abdullah sent a memo to ail employees announcing the change to team-based pay for performance. The reaction was negative and employees were not happy with the change.

Source: Adapted short case from Dessler, G.t & Tan, CH (2009). Human Resource Management: An Asian Perspective. (r edition). Prentice hall, Singapore. Page 343.

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Question 1

Do you think the team-based pay for performance is a good idea? Justify your answer.

(10 marks)

Question 2

If you are an external consultant, what advice would you give Abdullah and the CEO as they consider their decision?

(10 marks)

Question 3

What do you think are the mistakes they made in adopting and communicating the new salary plan? How should Abdullah have approached this major compensation differently?

(15 marks)

Question 4

Can the 360-degree feedback appraisal method work well in your work organisation?

(5 marks)