Case Study: Intel Corporation Europe

This case study explores how Intel Corporation Europe uses a strong reward philosophy, open communication, and engaged line managers to drive performance and employee motivation. The company's reward philosophy includes matching or exceeding the market for fixed elements of the total reward package and rewarding exceptional performance with variable pay practices. The case also highlights the importance of line managers in motivating and retaining high-performers.

Running head: HUMAN RESOURCE MANAGEMENT
Human Resource Management
Name of the Student
Name of the University
Author Note

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Case study – Intel Corporation Europe
When it comes to putting reward right at the heart of the employment relationship, the
computing giant Intel are firm believers in their managers exemplifying principles of
reciprocal trust and open communication – and this approach has seen spectacular results.
Intel Corporation’s operation in Europe extends from Ireland in the west to Kazakhstan in the
east and Israel in the south, employing approximately 17,000 workers in sales and marketing,
manufacturing and design. Intel’s mission – ‘This decade, we will create and extend
computing technology to connect and enrich the lives of every person on earth’ – reflects
both their ambition and their values. That such a mission would drive bold corporate
objectives might be expected, but it is in the translation of these high-level objectives into
meaningful working practices that has been key to delivering results. Gary Boyle, HR
Business Partner for Europe, believes that this has been achieved through a combination of a
strong reward philosophy; open, clear communications; and line managers who are
passionate about Intel and engaged with the company’s vision and values. Intel’s reward
philosophy is based on matching or exceeding the market for fixed elements of the total
reward package (base pay, benefits and employee share schemes) and rewarding exceptional
performance with variable pay practices which allow repeat high-performers to earn at the
very top of the market. An annual bonus is based on individual targets with a multiplier based
on overall company performance, while a six-monthly bonus is awarded on size of revenue,
operating margin and feedback from customers. What may be surprising in a diverse
employee population of 17,000 is that the bonuses are open to all, regardless of role, business
group or location. The message to employees is unambiguous: performance drives earnings
potential and performance is dependent on everyone – everyone will have a role to play, and
a share, in company success. Boyle is equally clear about the critical role of line managers in
the performance equation and believes strongly that this is where HR should facilitate, not

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direct. For reward to be meaningful from an employee perspective, Boyle says, ‘you don’t
need someone from HR coming in and telling you about the pay philosophy, you need your
manager understanding it and being able to relate it to you as an individual.’ In Boyle’s view,
the relationship between direct reports and managers and the trust people have in their
managers has the potential to be more important than pay in motivating and retaining high-
performers. According to Boyle, a healthy management relationship and the principle of
‘matching what you say with what you do’ have been responsible for some extraordinary
results at Intel. In 2010 the company faced a product recall. Its factories around the world,
already working to near capacity, were challenged with doubling production to meet
customer demands. Intel approached the situation as a potential win–win; they knew that
getting this right would improve financial results and they committed to sharing any gains
50/50 with employees. A huge communications campaign promoted the challenge and kept
employees informed of performance against target on a daily basis. Employees rose to the
challenge spectacularly and achieved the equivalent of 14 weeks’ production in just 8 weeks,
each earning a $1,000 bonus in the process. In an economic environment of zero or very low
base pay increases, it is clear from Intel’s example that greater employee financial
involvement underpinned by a positive employment relationship could be a very powerful
tool indeed.
Please narrate the case using the related HRM terminology. Which compensation
methods does the company use?
The case portrays the freedom of association terminology of the human resource
management. The human resource manager of the concerned organization is able to comment
on the role of the line mangers and the respective lower authorities which are taking care of
the employees. It is evident from the case that the management of the needs of the employees
can be effectively conducted with the improvement in the open communications and the

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mutual trust among the employees. The motivation of the employees inside the organization
is largely dependent on the recognition of the good work that the employees are able to
conduct, from the part of the line managers. Moreover, the case identifies the increment in the
motivation of the employees with the portrayal of the trust on them by their higher
authorities. The company has a rewarding policy for the employees who are matching or
exceeding the desired targets and it included the base pay increment, bonus and other variable
incentives. The company is observed to have an annual rewarding policy which is based on
the individual targets with a multiplier based on overall performance of the company. Along
with this, the organization has the six-month bonus policy which is dependent on the revenue,
operating margin of the organization and the feedbacks or reviews of the customers.

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2. Sinan was a proficient developer. He was knowledgeable in systems development and
understood the technology that the team was implementing. At the beginning of the project,
he completed his coding assignments ahead of schedule and indicated he could take on more
work. Halfway through the project, his performance slowed down dramatically and every
time the project manager walked up to his desk, you’d see the screen flicker as he pressed the
Alt-Tab key (which switches between top-level windows without using the mouse). CNN
Sports scores and fantasy football websites quickly switched to the Eclipse integrated
development tool that the project team was using to develop the product. Besides, Sinan is a
talkative person. During the working hours tries to open up conversations related to subjects
other than the job itself.
As a team leader how do you provide feedback to Sinan?
As a team leader, I will evaluate the work rate of Sinan over the period. As it is
evident that Sinan was doing great in the preliminary stages but, his performances declined in
the later stages, the decrement in the work rate will be visible. I will put that report of the
evaluation in front him in order to recognize his good work of the preliminary stage and at
the same time, I will ask him about the reason of the decrement in the performances. With the
identification of the probable reason, I will be in an advantageous position for motivating him
by the production of the importance of him in the project. However, I will try to use the
talkative nature of Sinan for guiding the other employees and that will be significantly
realistic with the fact that Sinan is a good quality developer and knows the technology well.
In addition to this, I will make sure he understand about my knowledge of his misconduct
during the evaluation process and that will helpful for him to get it as an warning. This will
balance the feedback.

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3.Watson Public Ltd Company is well known for its welfare activities and employee oriented
schemes in manufacturing industry from more than ten decade. The company employs more
than 800 workers and 150 administrative staff and 80 management level employees. The Top
level management views all the employees at same level. This can be clearly understood by
seeing the uniform of the company which is Same for all starting from MD to floor level
workers. The company have 2 different cafeterias at different places one near the plant for
workers and other near the Administration building. Though the place is different the
amenities, infrastructure and the food provided are of same quality. In short the company
stands by the rule Employee Equality. The company has one registered trade union and the
relationship between the union and the management is very cordial. The company has not lost
a single man day due to strike. The company is not a pay master in that industry. The
compensation policy of that company, when compared to other similar companies, is very
less still the employees don‟t have many grievances due to the other benefits provided by the
company. But the company is facing countable number of problems in supplying the
materials in recent past days. Problems like quality issues, mismatch in packing materials
(placing material A in box of material B) incorrect labeling of material, not dispatching the
material on time etc… The management views the case as there are loop holes in the system
of various departments and hand over the responsibility to HR department to solve the issue.
When the HR manager goes through the issues he realized that the issues are not relating to
system but it relates to the employees. When investigated he come to know that the reason
behind the casual approach by employees in work is Ø The company hired new employees
for higher level post without considering the potential internal candidates. Ø The newly hired
employees are placed with higher packages than that of existing employees in the same cadre.
1. Narrate the case with suitable Title for the case. Justify your title. 2. The points rose
by the HR manger as reason for the latest issues in the organization is justifiable or not.

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Support your answer with Human resource related concepts. 3. Help the organization
to come out from this critical issue as a line manager
The name of the case can be considered as “The influence of position and power”.
The justification for the title is pretty evident from the case. The organization which is able to
have a significantly good environment inspite of the less attractive rewarding policy, is seen
to suffer from the improper selection of the employees for the higher level post. The lack of
consideration of the existing employees for the higher level posts are observed to create an
apathy among those employees and that is responsible in the creation of the problems like
quality issues, mismatch in packing materials, incorrect labeling of material, lack of on time
delivery.
The findings of the HR manger is the grievance of the existing employees for not
being considered as eligible for the senior level posts and the improved pay structure of the
newly recruited employees compared to them.
As it is evident that the organization is suffering from the employee’s apathy of
performing as per the desired quality and the quantity owing to the improper selection of
employees for the higher level post, the recommendation will be an application of the proper
recruitment for the higher level post. The existing employees who are serving the company
for a longer period time and are qualified for the higher level posts in terms of experience and
the qualification, are in need to be considered as the top most priority in the selection of the
senior level posts. Such employees are needed to be given the chance for justifying their
qualification for the post even before the external recruitments. This will make sure that the
employees are motivated to perform better for the organization and at the same time the
progress in the career for them is visible in the organization. The recommended step will also
be significant in the retention of the employees for the organization. Along with that, the

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equality in the pay structure is in need to be developed by the organization and being the line
manager, this will e my recommendation for the management of the organization in order to
get back the good working environment.

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Bibliography:
Kauppila, O.P., 2018. How does it feel and how does it look? The role of employee
motivation in organizational learning type. Journal of Organizational Behavior.
Kuppuswamy, N., Saminathan, V., Udhayakumar, M., Vigneash, L. and Gopalakrishnan, P.,
2017. The Role of Motivation on Employee Performance in an Organization.
Kuvaas, B., Buch, R. and Dysvik, A., 2018, July. Individual variable pay for performance,
incentive effects, and employee motivation. In annual meeting of the Academy of
Management, Chicago, USA.
Mikkelsen, M.F., Jacobsen, C.B. and Andersen, L.B., 2017. Managing employee motivation:
Exploring the connections between managers’ enforcement actions, employee perceptions,
and employee intrinsic motivation. International Public Management Journal, 20(2), pp.183-
205.