A $300 million privately held plastics manufacturer saw increased employee productivity as the key to greater profitability. Unfortunately, earlier individual incentive plans failed to achieve the desired impact. In fact, the narrow focus on individual employee productivity led to deterioration in customer service and product quality.
After helping management clarify the key drivers of business value a cross-functional team designed a team-based program that truly supported management’s long-term business strategy. A multi-level base pay structure was implemented; one that paid different rates depending on each team member’s applied skills, flexibility, teamwork and productivity. In addition, a new group incentive plan that rewarded quality, productivity, on-time delivery and efficiency was implemented. To ensure a smooth transition, the Axiom team and management worked hard to clarify and communicate the business case for change, the transition plan, and the details of the new pay system. Skeptical employees quickly were won over.
- Facility productivity increased 35% in the first nine months after the new team-based rewards system was implemented.
- Management reported employees across-the-board were exhibiting productive new behavior
- Because Axiom successfully transferred knowledge throughout the engagement, the manufacturer was able to replicate their success by using the team-based model with other teams.