Sushma Industries: The Gordian knot of Compensation Design Harvard Case Solution & Analysis

Sushma Industries: The Gordian knot of Compensation Design Case Study Analysis

Hiring of a recruitment team:

This is based on defining and evaluating the employees’ perceptions regarding change management in the organizational structure. The team development would involve highly efficient and skilled individuals with the know-how of HR policies and management. The requirement of hiring of recruitment team is considered important for the hiring of correct individuals for the organization. The correct recruitment of employees undertakes the importance of job roles and responsibilities. Thus, during the recruitment processes ensuring the competency and skills of an individual is necessary.The determination of setting up a recruitment team arose when newcomers were interviewed by the long-term staff members at SIPL.


Based on the identification of the 35 differentiated roles of the employees at the organization, the recruitment team would categorize these differentiated roles under four to five specified categories. Each category would be provided with a supervisor to manage the particular operations allowing a way to bring a significant reduction in the communication gap. Each supervisor would report to the head of the operation fields such as pharmaceutical, automobiles, engineering, and process manufacturing organizations.

Pay Change:

Considering the categorization of the employees, the pay scale of each employee would be primarily based on the designation, skills, and competency of the individual. The wages of the employees would be fixed rather than continuing with the variable pay concept resulting in increased cash outflow in the form of reward. As the sales teams demonstrate their capability and comfort with the growth and maintenance of the client accounts. Thus, the compensation and benefits would be based on their performance.

Compensation and benefits:

The design of the compensation system would be based on the performance of the employees which involves the set of benchmarks for the sale of particular products and expansion of the client base. Based on the repetitive client base, increased client satisfaction, each employee’s performance would be evaluated each month. With improved performance and exceeding the benchmark, the employees would be provided with compensation of about 8% of their fixed salary. Similarly, other benefits to be provided mainly include an annual bonus equivalent to one month salary of each employee on the occasion of Diwali, free-medical for permanent employees, and annual paid leaves.


The change in the pay structure of the organization would significantly eliminate the concern of employees associated with wages offered to employees. As they are considered to be differentiated based on competency, experience, and technical skills. Similar to that, the change in the compensation system would result in the increased motivation and satisfaction of employees. Such change was based on the concern of Manjula, which other employees might tend to have. Therefore, the categorization of job roles and responsibilities into different categories with a supervisor would assist the employees to communicate their issues and problems with high expectancy to be resolved.


Based on the analysis of the organizational HR management issues and the possible challenges, the organization is recommended to stick to the attendance management program. Similarly, the alteration of the wage payment system from variable pay to fixed pay system is recommended supported by the practice of implementing clan culture. Revising the payment structure of the organization would assist the organization to make correct and useful compensation decisions and the recruitment of employees.....................................


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