Designing An Effective compensation System (A) Harvard Case Solution & Analysis

Designing An Effective compensation System (A) Case Study Solution

Set standards for performance bonuses

The management should formulate a set of standards for performance appraisal. They should clearly define the targets achieved and reward for set targets. There should be a grouping of targets achieved and the expected bonuses for those targets. The bonuses based on the targets achieved would motivate consultants to attain maximum bonuses by achieving maximum targets with quality performance.

Training of Employees on EPP

Moreover, the company should arrange effective training sessions for its employees to demonstrate its employees about its EPP strategy and how it’s beneficial for the traditional employees. The company should make a policy in which every individual shared same goals along with satisfying the existing company’s goals.

Testimonials on Success Stories

Marshall and Gordon must arrange by inviting groups or externals to motivate its employees by sharing their success stories. The company should also demonstrate the guidelines to achieve high performance with the help of success stories.

Tiered System

The company should encourage its employees to maintain good and long-lasting relationship with its clients to increase its credit targets. This will help in increased revenues for the firm and increased bonuses for employees. Management should arrange training sessions to demonstrate expert skills to maintain long lasting relationship with clients.

Re position within the PR Industry

Marshall and Gordon can attain high profile image in PR industry by adopting some strategic moves. PR industry is in its growth stage, Marshall and Gordon can attract many customers by providing high profile services. For this, the company should increase its number of employees by offering competitive salaries and trainings.

Motivate Consultants to Shift Strategy- Motivate Consultants

The firm should encourage team-based working environment across its each level of employees. It should adopt tactics aimed at team building and arrangetraining sessions to enhance the importance of team-based works and shared goals. This will help in motivating employees in helping others and welcome new people in their organization

Team based working will increase shared goal and hence would help in applying EPP strategy. It will also help in breaking down silos with in the organization.

Reward and Retain Top Performers

Top performers could be retained by providing them rewards and motivations. Following are some tactics that could be used to reward and motivate top performers.

Standards for measuring success

The set standards must not be biased and confusing. Associates must be awarded with 10% bonus with out any discretion by the top management and principals should also be awarded accordingly.

Team based approach

The management should increase team-based approach and allow bonus to teams on the basis of work done. This team-based approach will ultimately increase revenues by fulfilling individuals and organization wide goals and targets. This approach will also help in minimizing the number of underwater workers.

Create lasting relationship with clients

This approach can be achieved by creating personal relations with the clients. Workers shouldbe motivated to consider their client as their friend and suggest them with expert consultancy services. Moreover, partners should be motivated to work together from the origination to the execution of the project, to get shared bonus.

Less sales more service provider/assist them in achieving all their goals

The firm should formulate a team-based approach and assist them in achieving desired goals as the supervision helps in increasing the productivity along with increased consultancy skills. Moreover, the firm should organize training sessions for improved and specialized work.

Provide more personalized services

Every consultant must be trained in such a way that heis able to meet its set targets and provide personalized services. Personalized services help in achieving more revenues along with maintaining a personalized consultancy atmosphere.


From the above analysis, it could concluded that Marshall and Gordon’s current compensation plan has some defined loop holes. Management should work on minimizing these structural flaws by adopting some strategic moves. The above discussed new compensation plan will help the company to increase its revenues by cost cutting along with retaining its top performers by giving standard bonuses and competitive salaries.



Appendix:1(Strength and Weakness)

·         Strong compensation plan

·         Attracting new top performer

·         Retain existing top performer

·         Providing competitive salaries

·         Top performer extra 10% bonus

·         Set bonus percentages for consultation

·         Tiered system

·         Two-way compensation

·         Credit base compensation

·         High bonuses

·         Two-way credits pay

·         Weak set performance metrics

·         Increased cost

·         Silos people

·         Not meeting overall organization goal and targets

·         EPP strategy- workers not happy


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