Product details

By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them.
You can change your cookie settings at any time but parts of our site will not function correctly without them.
Management article
-
Reference no. 74410
Published by: Harvard Business Publishing
Published in: "Harvard Business Review", 1974

Abstract

A case study examines the history of McDonald''s compensation schemes for managers. The initial plans, managers complained, based compensation on sales volume, were too complicated, and used bonus payments based on supervisors'' subjective evaluations which inaccurately recognized performance. McDonald''s then developed four alternative plans. Four experts comment on the plans and outline various objectives: to be result- oriented, to produce extra effort, direct effort, provide compensation, encourage risk, place an emphasis on higher sales, avoid rapid upward mobility, and provide a comprehensible system which the managers find fair.

About

Abstract

A case study examines the history of McDonald''s compensation schemes for managers. The initial plans, managers complained, based compensation on sales volume, were too complicated, and used bonus payments based on supervisors'' subjective evaluations which inaccurately recognized performance. McDonald''s then developed four alternative plans. Four experts comment on the plans and outline various objectives: to be result- oriented, to produce extra effort, direct effort, provide compensation, encourage risk, place an emphasis on higher sales, avoid rapid upward mobility, and provide a comprehensible system which the managers find fair.

Related