Strategic Compensation

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Strategic Management

STRATEGIC COMPENSATION 1
Introduction
Plastico Packaging Ltd is the Small size manufacture of plastic bags based on the West
coast. The organization sells these bags to the retail sector. There are three main functional areas
of the business (1) is the production of plastic, (2) printing the names on the tubing and (3) is the
Manufacture process of the bags. The organization has around 14 employees who work in a
different department.
There are some challenges the organization is facing with the compensation structure.
The essay will cover the compensation issues and root causes of those issues also
recommendation to overcome the issues.
Challenges and recommendation to overcome
1. Identified challenges
There are many challenges facing the organization such as the turnover between
the inspector/ packers which is high as compared to the operators and utility workers,
utility worker’s turnover is almost just one-third of inspector/packers also less than
operators.
The second challenge is a poor performance by the production department as they do not
meet the production target. The team is not even providing a minimum level of production which
is affecting the business. Each operator handles two machines this lead to an increase in the
workload, as a result, the new challenge that arises is a poor quality of products.
One more challenge is that unequal pay structure creates conflicts between employees as
well as creates dissatisfaction, hence the operators blaming mechanics and inspectors/packers.
As a result, poor relationships lead to increase unproductivity of the organization (Heckscher,
2018)
2. Root causes of identified problems
The challenges of increases turnover arise due to the compensation structure paid
by the company. The HR hired more inspectors with less pay. Less pay structure leads to
an increase in the turnover of the inspector/packers.