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SCHOOL OF BUSINESS

Green Cool for Commercial Refrigeration

“How does it execute its Financial Benefits program?”

Fatima Ammar, Abed El-Wahab Mousa &Raja Yazbek

Advanced HR ManagementLebanese International University, Beirut

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Instructor: Dr. Ali HalawiSpring 2014

Green Cool for Commercial Refrigeration

“How does it execute its Financial Benefits program?”

Table of ContentsPart One: The Theoretical Framework..........................................................................................................4

I. Introduction............................................................................................................................................5

A. Overall Objectives.............................................................................................................................5

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B. Green Cool’s Organizational Overview.............................................................................................5

II. Theoretical Aspects of Financial Incentives:.........................................................................................7

A. The Relation Between Money, Motivation and Incentives...............................................................7

B. The Different Levels of Incentives..................................................................................................10

Part Two: The Practical Framework............................................................................................................19

III. The Practical Fact Finding Results of Green Cool..........................................................................20

A. Data Collection Methods.................................................................................................................20

B. The Fact Finding Results.................................................................................................................20

i) Individual Incentives:...................................................................................................................20

ii) Executive Incentives:...................................................................................................................22

iii) Team Incentives:..........................................................................................................................22

Part Three: The Research Conclusion and Recommendations....................................................................24

iv) Conclusions and Recommendations....................................................................................................25

a. Conclusions......................................................................................................................................25

b. Recommendations............................................................................................................................25

v) Questionnaires:....................................................................................................................................26

vi) Interview Form.....................................................................................................................................27

vii) Reference List:.................................................................................................................................28

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Part One: The Theoretical Framework

I. Introduction

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A. Overall Objectives

Despite the fact that this research would be insufficient to cover the whole concept we aim for,

yet we still intend to strictly clarify the main drivers towards the importance and effectiveness of

constructing purposive financial benefits program and how it is implemented in Green Cool

Organization, a commercial refrigerating company, leading sequentially to its ultimate

prosperity. However, all of the information provided shall be extracted, theoretically from our

course book, the Internet and our own backgrounds, while practically will be from the interviews

with General Manager Mr. Marwan Al-Jobbi, the Consultant and Site Supervisor Mr. Fakhri

Yazbek and the firm’s website. Thus, altogether will create a clear image of the importance of

the financial benefits provided by the firm in developing its human resources management

strategies within an organization, in order to elevate a company in its market, only if properly

implemented, and create a consistent long-term competitive advantage.

However, in considering such a critical matter that is crucial for any new-born or existing firm in

eliminating the least possible risk, the concepts are widely broad, all for the sake to avoid

personnel demotivation and turnover. For this reason, we decided to focus on two of the most

primary elements that concern paying for performance and financial incentives. First, the link

that relates Money, Motivation and Incentives and second, the different levels of incentives

provided, starting with the bottom line of salespeople, to the executive level of managers and

finally the entire team and organization.

B. Green Cool’s Organizational Overview

Green Cool S.A.R.L for commercial refrigeration and shelving is a very recent new born

organization in the Lebanese market. At first thought, being a new born my result in various

assumptions that the firm is at the very beginning of its experience in the market. It would be

typical for a fresh new entrant to start from ground point or below; since the introduction stage of

its lifecycle shows a strict decline in sales and profit due to intensive expenditures.

Exceptionally, Green Cool is not the same. It is actually a fresh and modern nomination for an

establishment built by two of the most experienced businessmen in the commercial refrigeration

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market. This experience, aged up to 25 years, played a vital role in boosting Green Cool into the

market as if it were there all these years.

Due to mutual benefits and a personal relationship that had long been present between the two

parties, Mr. Marwan Al-Jobbi and Mr. Fakhri Yazbek signed upon a partnership in 2012 and was

named Green Cool for Commercial Refrigeration and Shelving. Shares were distributed, staff

was carefully selected and the supplier that best satisfies the company’s objectives was allocated

and agreed with. The company’s major aim is to be the intermediary that provides industrial and

commercial projects with refrigerating facilities, shelving and related equipment based on the

type of business they have. Particularly in this domain, the Lebanese market is crowded with

competition. However, Green Cool management was perfectly aware of the importance of being

differentiated from within its rivals in the market. Distinctiveness was only possible by two

primary factors that were given careful attention; staff and supplier.

Assigned with a serious responsibility towards the social environment by selling food solutions

to retailers, who sell to final consumer, a very experienced and motivated work force was

mandatory. As GM and Consultant and Site Supervisor who have long known the market’s

requirements, Mr. Al-Jobbi and Mr. Yazbek employed a limited, sufficient and efficient group of

personnel who were spread over sales, marketing, maintenance & installation and service

departments. All were previously involved in the same or related business operations.

Most importantly, as Green Cool is primarily and fully dependant on a trustworthy and efficient

supplier, the company’s managers signed a formal agreement that states that it would be the

exclusive distributor of the products manufactured by the mother company of more than five of

the most distinguished Italian brands… EPTA.

EPTA is a complex group of manufacturing brands in the refrigeration industry. These

companies, some of which are Costan and Bonette that are highly demanded in the Middle East,

supply refrigeration systems, shelving and related equipment that offer advanced food solutions

to all types and sizes of retail stores and restaurants.

Green Cool, however, with its unlimited built-it experience in the market and long lasting

relationship with EPTA, mutual trust and benefits were the major drivers that lead EPTA

towards granting Green Cool the exclusivity in the Middle East just upon its foundation. On its

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behalf, the later represents the former in the region and ensures the delivery and installation of

the refrigeration and shelving systems to whoever requests them in the quickest and most hard-

bitten manner.

Finally, one significant aspect of the company is worth mentioning, its name. Many clients came

to ask about the reason why its founders named it Green Cool. Obviously “Cool” represents that

the major objective of the organization is providing refrigerators that ensure efficient cooling of

food stuff. While “Green” resembles the mission the company aims for through providing

environment-friendly products that do not release toxic gases upon disposal and that have a very

long lifecycle and a slow depreciation manner which could last up to 25 years of continuous

operation. This would minimize the frequency and intensity of the disposal of the products after

it had depreciated and thus resulting in less cost, less pollution and plenty of content.

II. Theoretical Aspects of Financial Incentives:

A. The Relation Between Money, Motivation and IncentivesBefore directly heading towards dealing with comprehensive terms related to the main target

subject of this research, it is essential to handle out a few general terms about influential factors

before.

Currently, and for a long while until our present day, using financial incentives became a very

popular tool in appraising and rewarding workers who have performed more or better than what

was predetermined for them to perform as a standard. The major element that is judged is the

personnel’s productivity capacity. After all, it is what that organization is concerned about and

what matters to it the most. Basically, the norms that production is generally measure according

to is the fair day’s work, which if exceeded at any point or under any circumstance, the worker is

considered to have achieved extra productivity. Another contribution is using the scientific

management movement which emphasized improving work methods through observation and

analysis. As for the most popular, and which was already mentioned, is using the incentive pay

as a way to reward the employees for producing over the standard allocate previously. As a first

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conclusion, financial incentives contribute to better and excess employee performance leading to

higher productivity and gains.

But these concepts are not easily implemented and for several reasons may turn out to be

ineffective and disastrous sometimes. Some of which is that a few incentives award the wrong

behavior and performance.

However, we are to assume the positive correlation between the incentives and motivation. And

in assuming so it is best that we clarify that from a psychological perspective, we suggest that

there are many reasons that drive us towards doing many things. Most of the times we do things

because we are motivated to do so due to certain internal desires and wishes while at others we

do it for the sake of external rewards. And so the incentive theory states that most behaviors are

motivated by a desire for reinforcement and/or incentives. According to this point of view,

people are usually motivated towards behaviors and actions that offer them positive incentives

while at the same time avoiding behaviors that lead to negative ones. And in the work place, the

greatest desired incentive and reward is one that’s of financial nature. But of course this isn’t

generalized on every individual because not all incentives are created equal and the rewards that

one might find motivating might not be enough to inspire another to take action. Psychological,

social and cognitive factors can all play a role in what incentives a person finds motivating.

With respect to a worker, being promised for incentives can be used to guide them into certain

behaviors he or she did not engage in before. But of course, the incentive’s effect is more

powerful if the individual places importance on the reward. Otherwise what’s the use from

promising a work staff with discount coupons for restaurants that are on the other side of the

state, which requires expenses higher that what was already discounted from the lunch’s bill. The

reward has to be obtainable, not just decorated with glittering terminology.

Therefore, management has to offer the following two categories of incentives to motivate

employees:

i. Monetary incentives:

Those incentives which satisfy the subordinates by providing them rewards in terms of

rupees. Money has been recognized as chief source of satisfying the needs of people.

Money is also helpful to satisfy the social needs by possessing various material items.

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Therefore, money not only satisfies psychological needs but also the security and social

needs. For that reason, many organizations introduce various wage plans and bonus

schemes to motivate and stimulate to work.

Thus the purpose of monetary incentives is to reward associates for excellent job

performance through money. This would include profit sharing, project bonuses, stock

options and warrants, schedule bonuses and additional paid vacation time.

ii. Non monetary incentives:

Besides the monetary incentives, there are certain non financial incentives which can

satisfy the ego and self-actualization needs of employees. The incentives which can not

be measure in terms of money are under the category of “Non-monetary”. Whenever a

manager has to satisfy the psychological needs of the subordinates, he makes use of non-

financial incentives. Non-financial incentives can be the following types:

Security of service: Job security is an incentive which provides great motivation

to employees. If his job is secured, he will put maximum efforts to achieve the

objectives of the enterprise. This also helps since he is very far off from mental

tension and he can give his best to the enterprise.

Praise or recognition: The praise and recognition is another non-financial

incentive which satisfies the ego needs of the employee. Sometimes praise

become more effective than any other incentive. The employees will respond

more to praise and try to give the best of their abilities to a concern.

Suggestions Scheme: The organization should look forward to taking suggestions

and inviting suggestion schemes from the subordinates. This inculcates a spirit of

participation in the employees. This can be done by publishing various articles

written by employees to improve the work environment which can be published in

various magazines of the company. This is also helpful to motivate the employees

to feel important and they can also be in search for innovative methods which can

be applied for better work methods. This ultimately helps in growing a concern

and adapting new methods of operations.

Job enrichment: The job of a worker can be enriched. This can be done by

increasing his responsibilities, giving him an important designation, increasing the

content and nature of the work. This way efficient worker can get challenging

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jobs in which they can prove their worth. This also helps in the greatest

motivation of the efficient employees.

Promotion opportunities: Promotion is an effective tool to increase the spirit to

work in a concern. If the employees are provided opportunities for advancement

and growth, they feel satisfied and contented and they become more committed to

the organization.

However, despite the availability of non monetary incentives and the huge effect on the attitudes

and behaviors of employees upon receiving one of these incentives, the relation between the

money, as an incentive, and the motivation is highly correlating. The major reason behind this

fact is that when an employee is compensated with cash money, in his view point, this cash

money is an extra tool that will back him up in purchasing a desired item or help in a certain

matter in his life outside the working environment. So even though non-monetary incentives are

highly important and effective, monetary ones always remain just as important to a worker

because money plays a major role in improving the wellbeing of a person his environment.

B. The Different Levels of IncentivesSpeaking of how incentives are categorized, each level of workers will have the opportunity to

attain a certain level of incentives proportionately. The idea is that a lower level worker is not

allowed or eligible to be awarded what an upper level manager deserve to have. Otherwise, a

complete unfairness and mismanagement is present and will soon reveal its disadvantages. Thus,

in dividing the levels of incentives to be specialized to each group of workers, we classify them

into three main stages; the individual, executive and team and organization incentives, where

each will typically have its own sources of needs and interests that mostly differ from one to

another.

a) Individual(salespeople) Incentives:

Individual incentive systems attempt to relate individual effort to pay. Conditions necessary

for the use of individual incentives plans are through identifying individual performance,

which is the performance of each individual that is measured and identified because each

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employee has job responsibilities and tasks that can be categorized from those of other

employees. Another is independent work where the individual contributes in independent

work and personal effort in completing a certain task. Also individual competitiveness

desired generated due to the fact that individuals generally pursue the individual incentives

for themselves and thus result in a certain level of competition among employees. A finally

and relevant condition is the individualism stressed in organizational cultures which suggests

that the culture of the organization emphasizes individual growth, achievements and rewards.

Whereas this won’t be beneficial if the organization emphasized teamwork.

For the sake of recognizing the individual achievements in order to provide individual

incentives, numerous types of systems can be suggested and implemented but we shall only

mention a few.

Peace-rate Systems: The most basic individual incentive system is the peace-rate

system, whether of the straight or differential type. Under straight peace-rate

systems, wages are determined by multiplying the number of units produced by the

peace rate for one unit. The rate per peace doesn’t change regardless of the number of

peaces produced. Because the cost is the same for each unit, the wage for each

employee is easy to figure and labor costs can be accurately predicted.

A differential peace-rate system pays employees one peace-rate wage for units

produced up to a standard output and a higher peace-rate wage for units produced

over the standard. This system was developed by Frederick Taylor aiming to

stimulate employees to achieve of exceed established standards of production.

Managers usually determine the standards, or quotas, by using time and motion

studies. However, there are many possible combinations of straight and differential

peace-rate systems. The specific system used by a firm depends on many situational

factors. In some instances, the costs of determining and maintaining the standards

may be greater than the benefits derived. Jobs in which individuals have limited

control over output or in which high standards of quality are necessary also may be

unsuited to peace work.

Bonuses: Individual employees may receive additional compensation payments in the

form of a bonus, which is a one-time payment that does not become part of the

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employee’s base pay. Generally, bonuses are less costly to the employer than other

pay increases because they do not become part of employees’ base wages, upon

which future percentage increases are figured. Growing in popularity, individual

incentive compensation in the form of bonuses often is used at the executive levels of

an organization, but bonus usage also is spreading to lower-level jobs.Bonuses also

can be used to reward employees for contributing new ideas, developing skills, or

obtaining professional certifications. When the skills or certification requirements are

acquired by an employee, a pay increase or a one-time bonus may follow. For

example, a financial services firm provides the equivalent of two week’s pay to

employees who master job-relevant computer skills. Firms in the information

technology industry pay bonuses for obtaining special technical skills in order to keep

employees from looking for new jobs elsewhere using their newly acquired skills and

certification. A bonus recognizes performance by both the employee and the

company. When both types of performance are good, bonuses go up. When both are

bad, bonuses go down. When an employee has done poorly in a year that was good

for the company, most employers base the employee’s bonus on individual

performance. It is not always as clear what to do when an employee does well but the

company does not. However, a growing number of companies are asking employees

to put a portion of their pay “on the line.” While offering big incentive bonuses for

high performance, they are withholding them when performance is poor and insisting

that employees share both the risks and rewards of business. One method of

determining an employee’s annual bonus is to compute it as a percentage of the

individual’s base salary. Often, such programs pay bonuses only if specific individual

and organizational objectives have been achieved. Though technically this type of

bonus is individual, it comes close to being a group or organizational incentive

system. Because it is based on the profits of the division, management must consider

the total performance of the division and its employees. Whatever method of

determining bonuses is used, legal experts recommend that bonus plans be described

in writing, especially for key managers. A growing number of lawsuits are being filed

by employees who leave organizations either voluntarily or involuntarily, demanding

payment of bonuses promised to them.

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Special Incentive programs: There are numerous special incentive programs that

provide awards to individuals. These programs can take various forms, ranging from

one-time contests for meeting performance targets to rewards for performance over

time. For instance, safe-driving awards are given for truck drivers who have no

accidents or violations during a year. Although special programs also can be

developed for groups and for entire organizations, these programs often focus on

rewarding only high-performing individuals. Incentive Program Awards: Cash merchandise, gift certificates, and travel are the

most frequently used rewards. Cash is still highly valued by many employees because

they have discretion on how to spend it; however, travel awards, particularly those to

popular destinations such as Disney World, Las Vegas, Hawaii, and international

locations, appeal to many employees. In one study, Goodyear Tire & Rubber

Company conducted an experimenting which some employees received cash and

another set of employees received merchandise and other non-cash rewards. The

employees receiving the non-cash incentives outperformed those receiving only cash

by 46%. The study concluded that many employees like the continuing “trophy”

value of merchandise rather than the short-term usage of cash.

Recognition Awards: Another type of program recognizes individual employees for

their performance or service. For instance, many organizations in service industries

such as hotels, restaurants, and retailers have established “employee of the month”

and “employee of the year” awards. In the hotel industry over half of the hotels

surveyed have recognition awards for desk clerks, housekeepers, and other hourly

employees, with the awards being triggered by favorable guest comment cards. It is

important that recognition awards be given to recognize specific efforts and activities

targeted by the organization as important. While the criteria for selecting award

winners may be subjectively determined in some situations, formally identified

criteria provide greater objectivity and are more likely to reward performance, rather

than being seen as favoritism. When giving recognition awards, organizations should

use specific examples to describe clearly how those receiving the awards were

selected.

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Service Awards: Another common type of reward given to individual employees is

the service award. Although these awards often may be portrayed as rewarding

performance over a number of years, the reality is that they are determined by length

of service, and performance plays little or no role.

b) Executives (managers) Incentives:

Managers play a crucial role in divisional and company-wide profitability and most firms

therefore put considerable thought into how to reward them. Most managers get short term

and long term incentives in addition to salary. For firms offering short term incentive plans,

virtually all – 96% — provide those incentives in cash. For those offering long term

incentives about 48% offer them as stock options. The latter are intended to motivate and

reward management for long term corporate growth, prosperity and share holders value. For

mature companies’ executives base salary short term incentives long term incentives and

benefits might be 60%, 15%, 15% and 10% respectively. For growth companies, the

corresponding figures might be 40%, 45% 25% and 10%. About 69% of companies in one

survey had short term incentives although nearly a third of those said they didn’t consider

them effective in boosting employee performance. We’ll look at short and long term,

incentives.

Annual bonus: Plans that are designed to motivate short term performance of managers and

are tied to company profitability. ‘

As noted, most firms have annual bonus plans aimed at motivating managers’ and

executives’ short term performance. Short term bonuses can easily result in plus or minus

adjustments of 25% or more to total pay. There are three basic issues to consider when

awarding short term incentives eligibility fund size and individual awards.

Eligibility

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Most firms include both top and lower level managers, and mainly decide who’s eligible in

several ways. Most base eligibility on a combination of factors, including job level / title

Base salary and discretionary considerations (such as key jobs having a measurable impact

on profits). Some simply base eligibility on job level or job title. A few base eligibility on

salary level alone.

The percentage size of the bonus is usually greater for top level executives. Thus, an

executive earning $150,000 in salary may be able to earn another 80% of his or her salary a

as bonus while a manager in the same firm earning $80,000 can earn only another 30%.

Similarly, a supervisor might be able to earn up to 15% of his or her base salary in bonuses.

A typical breakdown might be executive 45% of base salary, managers 25% and supervisory

personnel 12%.

Fund size

The employer must also decide the total amount of bonus money to make available – fund

size. Some use a nondeductible formula. They use a straight percentage (usually of the

company’s net income) to create the short term incentive fund. Others use a deductible

formula on the assumption that the fund should to accumulate only after the firm has met

specified level of earnings. Some firms don’t use a formula at all, but make that decision on a

totally discretionary basis.

There are no hard and fast rules about the proportion of profits to pay out. One alternative is

to reserve a minimal amount of the profits say, 100% for safeguarding stockholders

investments and then to establish a fund for bonuses equal to, say 20% of the corporate

operating profit before taxes in excess of this safeguard amount. So here, if the operating

profits were $200,000 (after putting away 105, to safeguard stockholders) then the

management bonus fund might be 20% of $200,000 or $40,000. Other illustrative formulas

might include:

i) Twelve percent of net earnings after deducting 6% of net capital.

ii) Ten percent of the amount by which net income exceeds 5% of stockholders’ equity.

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Individual awards

The third task is deciding the actual individual awards. Typically a target bonus (as well as

maximum bonus, perhaps double the target bonus) is set for each eligible position. The actual

award then reflects the person’s performance. The firm computes performance ratings for

each manager, computes preliminary total bonus estimates and compares the total amount of

money required with the bonus fund available. If necessary it then adjusts the individual

bonus estimates. The basic rule should be: Outstanding managers should receive at least their

target bonuses and marginal ones should receive to best below average awards. Give the

money you save from the performance to the outstanding ones.

One question is whether managers will receive bonuses based on individual performance

corporate performance or both. Firms usually tie top level executive bonuses mostly to

overall corporate results (or divisional results if the executive heads a major division). This

makes sense because to a large extent the company’s results are their own. But as one moves

farther down the chain of command corporate profits become a less accurate gauge of a

manager’s contribution. For, say supervisors or the heads of functional departments it often

makes more sense to tie the bonus more closely to individual performance.

c) Team and Organization Incentives:

Team-based incentive plans are initiatives designed to encourage and reward exceptional levels

of professional achievement. You can use incentives in your small business as motivators for

staffers to work collectively to earn monetary and non-monetary rewards. It is also a way for

small business owners to boost overall productivity and earnings while simultaneously rewarding

employees for a job well done. The objective of team incentives is to encourage group goal-

setting, collaboration and teamwork.

Profit Sharing

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Profit sharing is a team-based incentive plan in which you pay your employees a percentage of

your company’s overall profits. Profit sharing builds a sense of ownership among employees and

encourages greater team performance levels. Staffers know that the better their performance, the

better the business’s financial picture, and the higher their own potential cash rewards.

Gain Sharing

Similar to a profit-sharing plan, gain sharing is a team incentive in which you reward employee

groups for measurable, non-financial achievements in pre-established areas. For example, teams

may enjoy a bonus if customer satisfaction levels rise a certain percentage above figures from the

previous year. The focus of this type of incentive is for employees to recognize the role they play

in continually moving your small business forward in key areas.

Goal-Based Incentives

Goal-based team incentives reward employees for reaching specific goals. For example, topping

a certain dollar amount in sales, landing a specific number of contracts or hitting a membership

recruitment figure. The approach encourages teamwork and gives employees a firm target to aim

for. This incentive plan is good for small businesses because it promotes team work and

collective effort, and you only issue the reward if the goal is met.

Merit-Based Incentive

A more subjective approach to incentive programs is the merit-based incentive approach.

Following this model, you reward employee teams for effort, regardless of outcome. For

example, if your marketing employees stay late every night to finish a major advertising

campaign that doesn’t perform as anticipated, their dedication and effort are still recognized.

Because of the discretionary element of this type of incentive, it can be a challenge for

employees to know what they aiming for or how they will know when their efforts or actions are

viewed as “good enough” to merit reward.

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Financial vs. Non-Financial Incentive

It’s up to you, as the business owner, to decide what type of incentive you want to offer

employee teams. If cash rewards are too much for your small business budget, other incentives to

extend include paid time off, free company services or merchandise, or preferred parking or

office space. Ask employees what they consider to be a viable and worthwhile reward and

consider if it fits your budget.

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Part Two: The Practical Framework

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III. The Practical Fact Finding Results of Green Cool

A. Data Collection MethodsAs was initially stated, the main sources of information supplied in this research and particularly

in the practical division depended on two separate interviews (own of which was over Skype)

undertaken on two different days with the two founders of Green Cool Co., Mr. Marwan Al-

Jobbi as the General Manager and Mr. Fakhri Yazbek as the Consultant and Site Supervisor. The

two interviews where highly successful as they generated a wide variety of information that are

compatible with the objective of this research and which were oriented about the way the

company compensates and motivates is working staff based on their level in the organization, all

in the way that is seen most effective and serves the firm’s wellbeing.

B. The Fact Finding ResultsWhen we begin discussing how the organization we chose actually implements the

compensation strategies in its practical operations, it was mandatory that we depend

precisely on the details and information provided to us from the interviews performed.

And so the queries were primarily oriented around the three major elements that matter to

us the most which are the individual, executive and team incentives. All in the manner

that Green Cool adopts in motivating its working staff members.

First of all, upon our enrollment with the specified questions, the manager made it clear

to us that the most important element or measurement used for the sake of accurately

measuring the workers’ performance is using the Key Performance Indicators(KPI) that

would judge how well the job is done according to certain standard. Then the discussion

was on the way and involved the following:

i) Individual Incentives:Keeping in mind the idea of KPI, if we are to consider each individual in the

working staff, it is necessary to know the primary interests of every person in

order to target his or her needs or interests in compensating them. The

company allocates its workers preferences and tries the best in offering

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incentives that linger as much as possible with those preferences. For example,

some employees usually prefer that they receive a cash bonus because extra

money creates a stronger ability to purchase what is desired, while others

would prefer non-financial incentives such as a more considerate appraisal or

promotion. Anyway, what is mostly the case is that, speaking of salespeople,

regardless of their fixed salary, the company offers these representatives and

certain percentage of commission upon winning a new project. It is also

possible for any non-sales personnel or any external or foreign individual to

benefit from a particular considerable amount of cash upon simply bringing the

company news about a certain project that is on the way of construction. Of

course the prize is granted after making sure that the information is valid,

regardless of whether the project is taken or not.

Usually, at certain times, when the year is close to ending, the managers

suggest new distribution of employees which might lead sometimes to

suggesting a particular person to be promoted to a higher level with more

administrative responsibilities. This, of course, will be a very important

incident to many workers to achieve.

It has occurred once that a challenge was executed where in a short period of

time (three months), management announced that for every specific interval of

sale, the seller will be granted a certain percentage of that amount which is

greater than the usual percentage granted from usual sale. This seemed to play

a major role in creating competition between the sales rep and lead to higher

sales throughout the time interval specified.

One final technique was also very challenging, electing the employee of the

month. This procedure was a bit difficult because the business’ nature is B-to-

B, so there is no continuous interaction with customers, but on the contrary.

When meeting customers, a particular date is agreed upon with the time that

best suits the two parties, plus performing a presentation about the products

available for sale will require a considerable amount of time.

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ii) Executive Incentives:As mentioned before, the managers are also evaluated according to the key

performance indicators which judge how well they are doing and how

beneficial and effective their work is.

According to compensating executives, some ideas are common with what was

mentioned before regarding individual incentives. Some of them is the

commission granted upon attaining monthly target. But for sure, as we are

speaking at an executive level, the percentage will be higher than that of

normal lower level employees. This is also combined with annual bonuses that

would definitely exceed the monthly commissions and which of course are

specialized to managers only.

A very challenging technique was also through identifying monthly objectives

that need to be achieved and which involved a specialized incentive apart from

all other. It created a high level of motivation for managers to become more

creative in finding ways to attract new entrants to the market.

The most interesting procedure that is applied for managers is that in case there

were no vacant positions for a specific manager to be promoted, the GM signs

an approval to expand the grade for that manager and apply salary increments

that would elevate up to reach higher level managers. This would also involve

introducing new responsibilities and tasks and job enlargement.

Some other incentives are granting more paid vacations, paid trips, discounts

on particular places or restaurants and many other options.

iii) Team Incentives:The organization doesn’t much apply to such incentives because the working

staff is already limited enough to be altogether considered as one whole team,

including managers. But still, they do apply to certain concepts related to

compensating the team or organization altogether. Some of what was

mentioned is that upon achieving intended results, the firm offers an invitation

to the staff members for a very entertaining event, whether to a restaurant or

G r e e n C o o l F o r C o m m e r c i a l R e f r i g e r a t i o n | 23

camping or hiking or any other event. This, as claimed by the GM Mr. Al-

Jobbi, helped in building a very firm and strong bond between the members

which effected positively on each part of the company’s success.

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Part Three: The Research Conclusion and Recommendations

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iv) Conclusions and Recommendations

a. ConclusionsAs a final conclusion, we deduced the deep importance and effectiveness of offering the most

admired and interesting incentives for every individual member of the organization in order to

reflect positively on the operations performed. Especially that in the working environment of the

company, the employees face huge pressures and efforts throughout preparing presentations to

perform in front of potential buyers and throughout the continuous follow up of the transaction’s

stages. All of this is obviously in the favor of developing the company’s wellbeing and

flourishing, plus creating a positive reputation that would lead to leadership and establishing long

term relationships with retailers who frequently launch new branches in different locations

around the country. And last but not least, generating the desirable profit that satisfies the

company owners.

b. RecommendationsOur recommendation for the organization is to enlarge its working staff in order to be able to

cover a wider area around the country and still apply the same incentive programs that are

already implemented. Another recommendation is to provide more non-monetary incentives,

such as life insurance or retirement programs, which would result in more motivation and loyalty

to the firm from its members.

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v) Questionnaires:Some of the main questions that were mentioned in the two interviews are the following:

General questions about the organization

How important do you consider compensations are for the employees’ behavior?

In what ways do you find money an incentive to employees?

What are your major techniques in offering incentives?

How do you recognize that an employee deserves an incentive?

How are individual members, such as your sales representatives, compensated?

What are the offers that are provided for the employee?

In what ways are you managers compensated and motivated?

Is there specific incentive plans created for you sake? What are they?

What about the team as a whole, is there ways to provide incentives for the teams?

How do you describe your company’s situation and do you find any relation between that

and the incentives you provide?

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vi) Interview Form

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G r e e n C o o l F o r C o m m e r c i a l R e f r i g e r a t i o n | 29

Executive compensation - Wikipedia, the free encyclopedia

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HUMAN RESOURCES: INDIVIDUAL INCENTIVES

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Individual Incentives

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Explain the Difference Between Fiscal Policy & Monetary Policy | Chron.com

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