Bill Leung is the HR Director for Copper Inc., a mining firm. The business has been losing money over the past three years due to a worldwide slump in copper prices. There is pressure to reduce labour costs and increase productivity. Bill must recommend a plan for the research department staff. It's difficult to assess researchers' performance because of the kind of work they do. Recently, a number of researchers have been laid off because of the company's losses; remaining staff members must get involved in new projects. Flexibility and communication between project team members is very important. What kind of incentive plan would meet Bill's needs best?

Question

Quizplus · Accepted Answer

Gainsharing would be the best choice for this situation as it encourages teamwork, communication and flexibility between project team members which is important for the research department. It also aligns employee efforts with company goals to increase productivity and reduce labour costs. Profit sharing would not work as the company has been losing money, and ESOP (Employee Stock Ownership Plan) would not be suitable as the company is not profitable. Skill-based pay and piece rate would not be applicable as it is difficult to assess the researchers' performance due to the nature of their work.

Bill Leung Is the HR Director for Copper Inc