Braintrust Toys is a medium-sized company specializing in toy-making that decided to shift from product development to an innovative strategy. Its new objectives include enhancing attributes and convenience of existing products, launching new products, developing new markets, hiring personnel that thinks innovatively, and hiring customer service-oriented employees to support new products and markets. The company’s evaluations and compensation strategies need to be updated in accordance with the new innovation strategy.
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The evaluation principles need to be changed to address the new business objectives: innovation, new market development, and improved customer service. The current evaluations are performed by the company’s managers after reviewing employees’ results based on their influence on increased department product output and increased department sales at the end of the year. In accordance with the new company’s objectives, other performance indicators should be taken into consideration, namely the quality of customer service and the amount of innovation produced by an employee.
For employees working with customers, service quality should be the main evaluation criteria. It should include the following key performance indicators: Customer Satisfaction Score, product knowledge, problem-solving skills, and revenue per employee. To measure customer service performance, the following methods of evaluation can be used: customer feedback assessment, satisfaction surveys, conversion rate, rate of resolved issues, number of complaints, and employee surveys. The compensation system for employees working in customer service should be based on service quality assessment.
Another important evaluation criterium for managers, designers, and employees working with customers is the amount of innovation produced. It should include the following performance indicators: the number of identified problems, number of ideas produced, number of approved ideas, number of new strategic activities suggested, and the number of new competencies gained (Hittmar, 2015). For managers, they may also include the number of innovations implemented, the amount of time a manager spends with innovations, received training in innovative methods, the number of improved products, and the rate of productivity (Hittmar et al., 2015). Both managers and regular employees should be evaluated at the end of the year based on their contribution to the company’s innovation process rather than the general product output.
The compensation system should also be updated in accordance with the new business goals. Currently, employee compensation is based on longevity at the company. To align it with the new business strategy, compensation should be awarded based on the amount of innovation produced and the quality of service offered by an employee. It will encourage current personnel to focus on new objectives and allow the company to employ a new customer service-oriented hiring strategy. As a consequence, Braintrust Toys will have to let go of some of the employees who will not be able to meet the new requirements. To prevent this, time should be given for the existing personnel to adapt to the new objectives, and they should be provided with relevant training opportunities.
Overall, when focusing on the development of innovative products and new markets, the company should pay more attention to the amount of innovation produced rather than the general product output to evaluate employee performance. The evaluation and compensation strategies need to be updated to include relevant key performance indicators. For employees in customer service, the quality of service should be the primary evaluation criteria, and for all employees, their contribution to the innovation process should be given the utmost attention.
Hittmar, S., Varmus, M., & Lendel, V. (2015). Proposal of evaluation system for successful application of innovation strategy through a set of indicators. Procedia Economics and Finance, 26, 17–22. Web.
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