Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 23

Compensation, Strategy, and Market Value Jackson Supply Company is a publicly owned firm that serves the medical supply needs of hospitals and large medical practices in six southeastern states. The firm has grown significantly in recent years, as the areas it serves have grown. Jackson has focused on customer service and has developed an excellent reputation for speed of delivery and overall quality of service. The company ensures that customer service is each manager’s main focus by making it count for 50 percent of the management bonus. The firm measures specific indicators of customer service monthly; progress toward these measures as well as others is used to determine each manager’s bonus. In the past several months, top management has noticed that although most managers are meeting or exceeding their customer service goals and receiving bonuses accordingly, the firm’s stock price has been lagging while competitive firms’ stock prices have been rising steadily.

Required What modification, if any, should Jackson Supply Company make to its management compensation plan?

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Compensation Management & Business Valuation:

Compensation management is the demonstration of giving money related an incentive to a representative for the work they do by methods for an organization procedure or strategy. A few sorts of pay incorporate compensation, rewards, and advantage bundles. Organizations use remuneration the board so as to discover, keep, and spur representatives to accomplish quality work.