Corporate Rewards

Lately 500,000 cars manufactured and sold by Olympic Motors were called back. Couple of serious technical problems related to safety aspects of the car resulted in deaths of a few drivers. The owners of the cars created a big hue and cry. As a result, Olympic Motors agreed to withdraw the cars from the roads and promised to replace the defective components.

The work related to rectification of the called-back cars became the responsibility of service department of the company. Vice president (after sales service) John Acer was facing this kind of music for the second time in past two years. John Acer did not like the idea of taking up this responsibility since as per him the problem was the creation of the production setup and production department must be made accountable even to set right the defective cars.

He even sounded his objections to his boss Mike Gilani who was the president (marketing division) of the company. However Mike Gilani did not see it that way. Mike Gilani’s top most responsibility was meeting the sales targets and therefore, as per him, the production guys must produce those many cars. He was firm on his opinion that one should not disturb the rhythm of production by assigning the production division any other work.

The last time when there was this type of recall episode, despite John Acer’s objections even at that time, Mike had finally motivated John to accept the additional responsibility of rectifying the cars. He had told him confidentially, “This is a very critical job. On it depends the prestige and goodwill of Olympic Motors. John, if you could complete this job in time as per customers’ requirements, I will ask our top management to promote you as well give you a fat bonus.”

And subsequently, John had accepted the responsibility on these terms and conditions. He believed that he had his regular and legitimate after sales service assignments and this mass rectification job was an additional massive responsibility thrust on him. Therefore, he must be compensated well for accepting this extra responsibility which could recur in future also.

John had put in extra hours of work then and made sure that the cars were returned to their owners in time after replacing the defective parts. It was one hell of a nightmarish experience for him.

However, he did not get any promotion or any fat bonus. Mike had invited him for an official dinner with him in one of the most expensive restaurants to tell him the compulsions of the top management in not releasing any promotions or bonuses since the company had spent an enormous amount in buying and installing some new pieces of technology in order to eliminate the recurrence of such call-backs.

John was highly dejected to hear that explanation from Mike. John had told his wife about the promised promotion and bonus and both were happy. They had borrowed a good amount of money to buy their new home and they needed that extra money that would come in with the promotion and the bonus. John and more than him, his wife did not like the way Mike had treated them. But then they took it in their stride believing that no one in the company got any promotion or bonus or raise in the salary.

However, later on, John came to know that a few executives in the inner circle of the top management were given some rewards in hush-hush ways. Even Mike was one of the recipients. John felt pretty badly insulted on this account but did not pass on this information to his wife. He did not want his wife to be hurt further. But, John took it to his heart literally, in the sense that all these goings-on left him with a lifelong blood pressure problem. He started taking a daily compulsory dose of the blood pressure tablet on doctor’s advice.

So, this second time when the rectification project of the 500,000 recalled cars was forced on John, he objected quite vehemently. He specifically reminded Mike about the denial of the earlier promised promotion and bonus to him.

Mike put his hand on the shoulders of John and said, “Please accept this responsibility again for my sake, John. Based on your last assignment’s performance and on the anticipation of successfully completing this new assignment, I will make sure that you will definitely get a promotion, raise in the salary and significantly high bonus amount. I had already brought up your case last time itself and so the top management is already aware of your case. So, don’t worry. Simply concentrate on your job right now. Leave the rest to me. Luckily, the company is doing very well financially this year and I do not see any problem at all.”

Mike’s sincerity could not be doubted by John.

John put his heart and soul in meeting the deadlines. He completed the rectification of all the 500,000 cars by replacing the defective components with good ones and testing them and making sure that the cars were returned to their owners in time.

Then he was looking forward to the announcements of the next round of promotions, raises and bonuses.

And the day the announcements came, he was found unconscious in his cabin by one of his subordinates. The doctor came and declared that John had suffered a serious heart attack. He was shifted to the emergency room of a nearby hospital immediately.

The second time too John was denied the much promised promotion and bonus. And due to this shock, he suffered the heart attack.

What happened was that top management had decided to curtail the promotions and raises in the salary and bonuses the second year too because of the extra expenditure being incurred by the company on the repeated recalls of the cars.

In all of these restrictions on promotions and rewards, Mike wanted to promote his vice president (sales) as his first priority. As per Mike, it was his strategic decision and promoting vice president (sales) was imperative to meet his next year’s targets which were recently revised significantly upwards to meet the deficits created by the extra expenditures on rectifying the recalled cars.

But additionally he also wished to promote John as promised. So, when Mike took up John’s case with the top management, he was advised, “Mike, you have the quota of promoting only one person at the level of your vice presidents. So choose any one.”

Mike chose to promote vice president (sales) despite all the promises made to John- his vice president (after sales service).

Related Book

"Sensitive Stories of Corporate World" (available from Amazon, get it online)

Read many more management anecdotes/management case studies in the eminent author Shyam Bhatawdekar's best selling book "Sensitive Stories of Corporate World" available online from Amazon as an eBook as well as a printed book.

Other Related Reading

For everything you wanted to know on building leadership and management, refer Shyam Bhatawdekar’s website: http://shyam.bhatawdekar.com/

Also, refer our High Quality Management Encyclopedia at: http://management-universe.blogspot.com/

For “out of box thinking” articles by Shyam Bhatawdekar, refer: (Out of Box Ideas) http://wow-idea.blogspot.com/

Read other blogs of Shyam Bhatawdekar at: (Home Page for Writings of Shyam Bhatawdekar) http://writings-of-shyam.blogspot.com