Case Study - Reward System

Star automobiles ltd. Pimpary is in the field of manufacture of two wheelers. They manufacture and market mopeds. These are available in the brand names 'arrow' and 'double arrow' where 'arrow' is their traditional product and 'double arrow' is the improved version.

The company was started about 20 yrs ago. Their product 'arrow' enjoys a reasonably good reputation and they were comfortable in the market. However, with the entry of the new generation of fuel-efficient mopeds the company started loosing its market.

They immediately started developing the improved 'double arrow' but by the time they came out with this new model the competitors had already strengthened their position in the market.

The 'arrow' model was still acceptable by a segment of the market as it was the cheapest vehicle. 'Double arrow' is a new generation vehicle. It was costlier than Jet but its performance was much superior. It is compared favorably with the competitors' products; however it was yet to gain a foot hold in the market.

The company had to refurbish the marketing activities in order to get back their market share. They employed young sales engineers to launch a strong sales drive. Mr. Ramesh Tiwari, Btech and a diploma holder in marketing got selected and was put on the job.

Mr. Ramesh Tiwari started well in his new job. He was given a territory to contact the prospective customers and to book the orders. The company had introduced a new financial assistance scheme. Under this scheme, buyers were given easy loans. It was particularly advantageous for group booking by employees working in an organization.

Mr. Ramesh Tiwari was able to contact people in different organizations, arrange for group bookings and facilitate the loans. His performance was good in the first year and in the second year of his service.
The company had its own system of rewarding those whose performance happened to be good. They usually arranged a paid holiday trip for the good performer along with his wife. Mr. Ramesh Tiwari was accordingly informed by the marketing manager to go to Chennai with his wife on company expenses. Mr. Ramesh Tiwari asked him as to how much it would cost to the company. The marketing manager calculated and told him that it would cost about 8000/-. He quickly asked him whether he could get that 8000/- in cash instead of the trip as he had better plans. The marketing manager countered this saying that it might not be possible to do so. It was not the trading of the company, however he would check with the personnel manager.

After a couple of days, Mr. Tiwari was informed that it would not be possible to give him a cash reward. Mr. Tiwari grudgingly went for the trip and returned. On his return, he was heard complaining to one of his colleagues his little daughter was also along with him.

The marketing manager and the personnel manager thought he was a bit too fussy about the money and some of his colleagues also thought so. During the subsequent days Mr Ramesh Tiwari's performance was not all that satisfactory which showed his lukewarm attitude towards his job and the subordinates.

Questions:
1. Where did the things go wrong?
2. Was Mr. Ramesh Tiwari too much money minded?
3. Was the company too bureaucratic?
4. Did the personnel manager handle the issue properly?
5. What is your recommendation to avoid such situations in future?