Case Analysis of Waterway: Communication Barrier and Compensation Policy Problem

Introduction

Communication problem

i Problem description

In Waterway, one of the growing pains for its CEO is the headache on whether retain Carter who is one of the star performers in Waterway with satisfactory rewards or risk her leaving in this case study. One of the factors caused this issue to come into being may be attributed to the communication problems existing in Waterway, which may be investigated from many clues on the ground of this case. Primary speaking, there was communication problem between Maher, who is the CEO, and his subordinates. For one thing, what Carter had contributed to Waterway is to open new sales channels and be personally responsible for 40% of the total sales revenue for Waterway during the last two years successfully, which had even pushed Waterway to the never reached prosperity compared to its pervious performance. Nonetheless, what Carter had been engaged in may be seemingly deviated from her actual role. On account of messages in the case, the job title of Carter is director of marketing, which is responsible to advertise and promote the company’s products or services, grow and develop the waterway’s products including canoes and kayaks, etc. in the marketplace, research and collect messages or data from other opponents, supervise the sales performance and profits, catch business opportunities and oversee the performance of her marketing staff, etc. (Pride & Ferrell 2011). Briefly, what Carter should do as the director of marketing in Waterway is to act more like an operator and leader in marketing department to promote the overall performance of this department. However, Carter was seemed to only concentrate on promoting sales, which may be more like a marketing staff but not a marketing leader. Referring to this inadequate role performance as a marketing director played by Carter, the reaction of Maher was to keep silent because he believe Carter had her hands full due to the booming of the business. From this message in the case, it may be easy for us to notice Maher didn’t and never tried to communicate with his subordinate like Carter even he had noticed some problems, which had gradually promoted Carter to a notable position in Waterway and planted the seed of the risk on Waterway’s business if Carter leaves.

For the other, the communication between Maher and other subordinates might be also terrible by our study of the case. There were two evidences notice by us. On the one side, towards the proposals offered by some of core employees such as the former CFO, Maher often played hardball. For example, Papadopoulos as the former CFO of Waterway was refused twice by Maher on his suggestion, which resulted in his departure. One the other side, towards the proposals or suggestions from some ordinary employees, the attitude of Maher wasn’t mitigated either. For example, some designers in Waterway had approached him to make some adjustments on salary scheme, but Maher had rejected that proposal and used some other alternatives from his will. All in all, the two sides of Maher’s communication manner in Waterway with his subordinates suggested the relatively terrible communication mechanism in Waterway between its leader and subordinates, which encouraged many negative factors for Waterway’s future development such as the headache on whether give Cater the star reward or risk her leaving .

The next evidence on the communication problem in Waterway is the inadequate communication between Carter and her staff in marketing department. In view of the case, Carter had been completely focused on promoting sales on her own rather than focused on the overall performance of marketing department in Waterway. For example, Carter had missed the annual Waterway picnic and Carter had no time to get along with her staff which suggested the communication between Carter and her staff went badly in Waterway. Such kind of situation had also fostered the individualistic heroism of Carter in her marketing department or even in the whole Waterway resulting in the business of Waterway relying too much on Carter’s individual performance instead of collective contribution.

In a word, Waterway’s communication problem was a barrier for its development and also led to the plight for Maher on whether give Carter the star reward or risk her leaving.

ii Cause analysis

Inadequate corporate strategy

The first factor to cause communication problems in Waterway may be attributable to the inadequate corporate strategy of Waterway. According to messages in the case, corporate strategy in Waterway was seemingly incomplete. For example, in the marketing department, there was almost no completely and elaborate designed marketing strategy to advertise and promote Waterway’s products such as canoes and kayaks, collect vital information about the marketplace such as the situation of competitors, analysis on sales and profits, business opportunities analysis, etc. the incomplete and inadequate marketing strategy made the performance of marketing department or even the whole Waterway rely on one person’s effort, that is Carter’s efforts.

Doole and Low (2008) pointed out marketing strategy works as something to facilitate firms to achieve their marketing objectives and then to achieve their corporate objectives to maintain competitive advantages over their competitors. In Waterway, an incomplete and inadequate marketing strategy may hinder Waterway’s marketing department to carry out proper environment audit such as PEST analysis, SWOT analysis, competitor analysis, etc, reduce chances for both employees and Waterway to understand the environment and decrease staff’s competitiveness (Applegate & Johnsen 2007). As the incomplete and inadequate corporate strategy had been involved in Waterway’ progress, its drawbacks became more and more obvious which led marketing leader to care her own performance and ignore the importance of collective efforts. On account of the incomplete and inadequate corporate strategy such as marketing strategy, it appeared the communication between Carter and her staff was unnecessary, which resulted in the communication problems finally.

Incomplete human resource function

For Waterway’s corporate strategy was incomplete and inadequate, which directly impacted on the performance of human resource development in Waterway. On the ground of messages from the case, there was almost no human resource strategy to guide Waterway’s human resource department to provide correct and necessary job analysis such as offering job description to Carter on her job duties or responsibilities, relationships between her and her staff in marketing department and how to lead her staff to achieve marketing goals together but not the individualistic heroism. There were some clues. Carter had been engaged in expanding the market and promoting sales instead of improving the overall strength of Waterway’s marketing department, which may be defined as a short sighted activity rather than far sighted activity. One factor causing such kind of activity of Carter was because there wasn’t any proper human resource strategy to train, develop or guide employees in Waterway on what their duties and responsibilities were, what types of approaches or activities were recommended for them to achieve organizational goals, etc (Flynn 2010). Briefly speaking, for there wasn’t adequate job analysis and design for employees such as Carter in Waterway, people in this firm may be in a confused situation that they just practised activities from their sense and role and were shortage the sense of unity. Hence, for Carter even as the boss of marketing department without some clear and proper human resource design and analysis to guide her activities she just did what she thought she should do and ignore other staff’s performance, which finally resulted in the insufficient communication between her and her staff. So the communication problems in Waterway became more and more terrible.

Imbalance between the Maher’s development and environmental requirements

The last factor to arouse communication problem may be charged on the slow development of Maher as Waterway’s big boss and the fast development of environment factors. In the case, there was a reminiscence of Maher on the developing history of Waterway from a small business to today’s prosperity. From this, we may notice as the market for canoe and kayak developed which may require business players to carry out suitable business strategy with well designed human resource plan to development a strong talent pool to meet the furious competition, there was almost no obvious development of Maher. He still laid stress on sales performance and didn’t carry out any clear and necessary strategies such as marketing strategy, human resource strategy, etc.

Dunphy, Griffiths and Benn (2007) pointed out it is crucial for companies, particular the leaders, to keep pace with the developing and changing speed of environment to develop himself or herself for the first time and then lead the overall company to develop to meet environment challenges and opportunities. For Waterway, Maher’s performance and development may still belong to the old time which was the time of the Waterway was still a small company, so he didn’t realize the importance of organizational structure design, human resource strategy development and other important corporate strategies for the future of a big company like today’s Waterway. In brief, the imbalance between Maher’s development and environmental requirements made Maher ignore the importance of effective communication in Waterway and finally contributed to the communication problems.

Compensation policy problem

i Problem description

Another problem existing in Waterway was recognized as compensation policy problem. In the first place, most proportion of the headache for Maher in Waterway o the case’ information may be regarded from the compensation policy. Three typical examples may help us realize the seriousness of this problem. One was the former CFO’s leave because Papadopoulos was refused by Maher twice on resigning the compensation packages for him. The second one was Maher’s rejection on proposal of equity sharing offered by two designers. The last one was the possibility of Carter, one of the excellent performers in Waterway, to leave Waterway if there was no attractive compensation package to retain Carter. The three clues may work as proofs to prove that there were problems in compensation policy of Waterway.

In the next place, Maher’s doubt on Waterway’s compensation package disclosed the fact some problems did exist in compensation package of Waterway. Primarily, Maher realized some danger by comparison the compensation package between Waterway and other competitors in sporting goods industry. For example, all sorts of elaborate compensation systems such as supplemental packages for retirement, stock options, deferred compensation, etc. were offered by Waterways’ competitors. But in Waterway, although the turnover was low, there were always some requirements from employees to adjust compensation packages. What’s more, the possibility of Carter’s leave without attractive enough compensation package had put the compensation policy problems of Waterway in the teeth of storm. Secondly, the conversion between Maher and Holmes on fair pay disclosed the compensation problem in Waterway as well.

In brief, the compensation problem for Waterway may be the most urgent one to solve, because it was regarded as the primary cause for the possibility of Carter’s leave. That is, the headache of Maher on whether gave Carter the star reward or risked her leaving was somewhat from the problems in compensation policy of Waterway.

ii Cause analysis

Inadequate leadership behavior

The first factor resulted in compensation policy problem in Waterway may be blamed on the leadership behavior of Maher. In the case, Waterway had grown from a small company in canoe making industry into today’s big giant which enjoyed reputation both in canoe making and kayak making. In comparison with the development of this company, the leadership behavior of Maher as its boss was seemingly unchanged. For example, from the very beginning when Waterway was just engaged in canoe making, Maher almost devoted his full energy to opening market and increasing sales and as the leader, Maher was seemed to take it for granted that there wasn’t so necessary to build up a adequate and complete corporate strategy and other related strategy or department to pursue a healthy development circle for Waterway. Towards the leadership behaviors of Maher in the begging of Waterway, which may be only concentrated on the profit, it may be reasonable. Because in that time, Waterway was only a small business which had only few employees, it was unnecessary to complete some corporate strategies or build up necessary developing schemes for a small company (Churchill & Lewis 2009). So, Maher’s leadership behaviors in that period may be regarded as suitable.

However, when Waterway had developed so fast in many aspects, it wasn’t so suitable for Maher to keep his leadership nearly unchanged. As Hughes, et al. (2006) advocated leaderships behaviors can be resulted from their values, attitudes, knowledge, experience, intelligence and personality, etc. as the successful business man, we will not doubt the intelligence of Maher and we may attribute his improper leadership behaviors in the prosperous time of Waterway to his attitude, experience or knowledge aspect. The reason for him to ignore the importance of a complete and proper organizational structure and related policy particularly the compensation policy may be that he wasn’t so experienced and knowledgeable to run a large business. Hence, the attitude of Maher on how to really manage his business systematically and carry out competitive compensation policy to remain more talents was prepared well.

Briefly, the inadequate leadership behaviors of Maher were one of the causes of compensation problem in Waterway, which finally caused the trouble on giving Carter the star reward or risking her leave to Maher.

Incomplete human resource function

The other factor to cause compensation problem in Waterway was regarded as the incomplete and improper human resource function. We have discussed that it appeared as if there may be no human resource strategy or any necessary human resource policy to facilitate its development. In the first place, the absent of important human resource performance management and reward system which limited the ability of Waterway to give employees including Carter instructions and evaluations on some necessary standards and feedbacks to perform properly and gain the satisfactory reward (Cokins 2009).

For example, proposals from both the former CFO and two designers on adding equity in their compensation package, Maher’s doubt on what fair pay was, and the competitive compensation package in other competitors of Waterway were all due to the weak human resource function on performance management and compensation system designing in Waterway.

Recommendation

i Developing human resource planning function

Truss and Gill (2009) pointed out HR planning focuses on both demand and supply of labor to put different talents in the suitable position in their companies. For Waterway to remove the communication problems and compensation problems, adequate and sufficient HR planning is so significant.

To begin with, to developing suitable human resource strategy to facilitate HR planning’s healthy function can help Waterway to meet both internal and external challenges from environment. On figure 1, HR planning in Waterway has close relationship with many there are many environmental elements, which are all significant factors for the current and future development of Waterway.

Figure 1 HR planning and environmental factors

figure 1.0

Source: Stone, R. J. 2010, Human resource management, 7th edn, John Wiley & Sons, Milton,

Furthermore, elaborate HR planning can help Waterway to give instruction to every employee on their job with suitable allocation of their tasks (Stone 2010).

In brief, although it will cost a great deal of time and resources to develop adequate HR planning and make its function well, with the facilitation of HR planning, significant talents with suitable skills and ability, etc can help Maher improve communication effectiveness and alleviate pressure from complaints on compensation policy. In the first place, if HR planning function in Waterway runs well, it will not be a headache for Maher to decide on whether give Carter the rewards which may be beyond Waterway’s capacity or risk her leaving. Because, well functioned HR planning in Waterway can guide people’s activities and behaviors to do what they should do firstly, the situation of mismatch activities or behaviors as Carter did in Marketing will not occur. In the second place, if HR planning function runs in a healthy circle, suitable and qualified talents in each position both in ordinary position or upper management level position as Carter was in will be developed and become matured fast to make the marketing department and the entire Waterway run as a whole body to avoid individual heroism like Carter and led the overall company rely on too much one person. For this reason, the risk to let Carter leave is worth trying.

ii Complete the performance management system

To facilitate Maher solve problems in communication and compensation to finally determine whether give Carter the seemingly overladen reward or let her go, completing performance management to optimize compensation package in Waterway is proposed. Cardy and Leonard (2011) advocated performance management aims to improve performance of an organization in levels of organization, function, unit and individual by the support of linking each objective. And Waal (2007) proposed performance management facilitate companies to optimize their job design, recruitment and selection, training and developing programs, planning for career and remuneration and benefits, etc.

On account of the benefits of adequate performance management system described above, Maher may resort to the well established performance management system to ensure jobs are properly designed for each job position and to hire qualified employees in Waterway (Nankervis & Compton 2006). For example, in the present situation, both the marketing department and Waterway depended on too much of Carter to bring in business and pursue good financial performance. In this way, there was no special human resource strategy and suitable organizational structure to facilitate Waterways healthy development if Carter leaves. Hence, we propose Maher hade better development the necessary performance management to both put right person in right position and establish significant strategies and structure. And once these basic requirements are achieved, Waterway may be able to go further, even without Carter.

Furthermore, when performance management system in Waterway is completed, the standards and rules on what level of reward can be gained by what types of working performance can be more clearly to employees, which may help Maher to avoid the continuous requirement on providing more reward to employees. And in addition, with facilitation of performance management system, each employee in Waterway can perform their own function, which may avoid the individual heroism, improve communication effectiveness and cause fewer complaints on reward (Nankervis & Compton 2006).

iii Complete compensation system and employee benefits

With the establishment of performance management, compensation policy had better to be completed and modified in Waterway, too. There are some clues to disclose the fact, Waterway had no standard compensation package and policy to company it fast development which caused the complaints and possibility of Carter to leave Waterway. On the condition, pay for performance is regarded as the most suitable compensation scheme for Maher to alleviate the compensation headache.

Stone (2010, pp. 469) claimed pay for performance is the pay system that rewards employees on the basis of their performance to help Waterway to develop a productive, efficient, effective organization that enhances employee motivation and performance. In figure 2, we describe the related elements will be considered in the pay for performance system of Waterway.

Figure 2 major factors related to pay increase for Waterway

figure 2.0

Source: Stone, R. J. 2010, Human resource management, 7th edn, John Wiley & Sons, Milton,

From figure 2, many elements such as performance, job size pay competitiveness, company profitability, inflation and position in pay range are concerned in the new designed compensation package based on pay for performance (Stone 2010). The advantages of this proposal are newsworthy. In the first place, the salary of employees in Waterway is based on their performance, company profitability and other elements in figure 2, which will be more persuasive and reasonable for employees to focus on their work rather than worry about their compensation package. In the second place, if someone still complains on their compensation package, the standardized pay for performance system may also support Maher to give reasonable explanation and reaction on these complaints but not to solve the problems as he once did for the two designers without suitable standard and rule (Rosenthal & Dudley 2007).

Furthermore, in addition to the pay for performance, other kinds of employee benefits plans are proposed to facilitate Maher. From the case, Maher was seemed to be unwilling to add equity in the compensation package for employees. To follow his willingness, employee benefits such as preventive health programs, flexible work schedules for marketing staff, insurance benefits, retirement benefits, etc. can also be used to support Maher to reach Waterways business objectives by attracting, motivating and retaining valued talents to improve the cohesive force, improve communication quality, reduce complaints on compensation and stabilize the organization development.

iv Change leadership behavior

The leadership behaviors of Maher are also regarded as the barrier to improve the communication quality and organizational development. To remove this barrier, Maher is suggested to change his attitude and improve his professional knowledge on the management theory and skills of middle to large company in the industry Waterway engaged in so as to lead Waterway to develop correctly and healthily to support effective communication and suitable compensation system building and development.

Evaluation on Carters stay and leave

The four proposals mentioned to help Maher to improve communication quality and compensation problem in Waterway are aimed to alleviate the pressure of Maher on determine whether retain Carter or let her leave. Since the pressure of communication and compensation problems may be alleviated and removed by our four suggestions, we propose that Maher can let Carter go if she wants to go. In the first place, although Carter was a heroine for Waterway, the drawbacks of her existence may be larger than the benefits for waterways future development. To begin with, Carters performance and activities may go beyond what she should do and her existence make the adjustment of the structure in marketing department and establishment marketing strategy become difficult. Secondly, a company cant achieve real success only depend on one person. But the existence of Carter may write off many possibilities of other talents to show their excellences. Hence, with the support of the recommendation on problems solving, it is possible for Maher to let Carter leave and lead Waterway to run in a much healthier developing road.

In brief, although the four proposals will cost lot of time and even money of Waterway, they are worth trying taking their benefits into consideration.

Conclusion

In this essay, two problems of Waterway in the present time were presented, communication problem and compensation policy problem etc. At first, several clues in the case were offered to prove the existence of the two problems. And then,

Reference

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