Case Study: Growing Pains
What is going on?
Waterway Industries began its service in 1963 from small and high quality canoe maker. Cyrus Maher who is CEO had maintained a steady growth right up until 1990. Recently he may be facing a human resources problem. Lee Carter is a relatively new employee whose high-powered sales ability has completely changed sleepy canoe company into extraordinary growth. But Maher has overheard Carter discussing a new job that would offer equity position and money, and he fears her defection is imminent.
Maher has begun to reconsider his employees' compensation arrangements, particularly Carter's. As he consults with his banker and advisers in the industry, he begins to realize that organization culture he created at Waterway may have changed for good. The ideas of how to help company get out of dilemma occupied the proscenium of his mind.
Analysis of the case:
Until 1990, the expanded business hadn't changed Waterway's informal work style and Maher hadn't been motivated to push any harder even though sales and revenues had increased with the market.
In case, Maher wanted to recognize Carter's contribution because she had been extremely successful in opening new sales channels, and she was personally responsible for 40% of the company's sales for the last two years. But the sales network had grown informally, and Maher had never really tracked it or thought much about building a sales force or developing a formal distribution plan. In Maher's heart, Carter is the best hiring decision he ever made. He wants to keep her and continually improving, but he is in dilemma that how can special employees deserve special motivation and how come company manages paying some much more than others after Maher mentally reviewed his payroll. Those are the key issue in this case. If...