“Marshall & Gordon: Designing an Effective Compensation System (A)” The case presents a scene where company is trying to breach a new market segment that requires completely different approach and skillset than that of the majority of the current employees. I believe that biggest problem in this case is need to change way how current managers sell and execute on business projects which is significantly different for PR activities that are currently major share of the business and executive positioning projects (EPP).
My experience shows that many professional services companies in the world are facing the same problems i. . Big 4. The core reason for this might be that historically all business of these companies where performed in a certain region or area, however as companies grow bigger and gain more international presence their work and projects go across regional borders. Even more in many cases this means countries and areas with different cultures and ways of practicing business that require completely different skillsets and different way of working for organization to succeed in winning the competition. My thoughts are that company lacks a common vision and willpower of the managers and partners to execute on this vision.
Defining a clear vision and making sure that all of the company knows and does all it can to achieve it should be the main focus of the company. The case clearly shows that for EPP type of services to work it requires a lot of information and connection sharing that was not required before, the whole company needs to change. Information in the case also indicated that there are managers in the company that are willing to share their connections and resources for the EPP type of services to work, however at the same time they expect that they will be compensated in the equal amounts as if the job would have been performed in their office/area.
Eventually compensation system will have to be reworked as currently bonus percentages are very generous being from 25% to even 60% out of project value, which clearly indicates that company has to set high profit margins to finance all the employees doing the work and being able to afford such a bonus system for more senior employees. But this issue should be dealt after the company’s vision has been defined and whole organization is aligned with that.