Patagonia Case Study

1) Patagonia has a history of putting sustainability ahead of profits. Based on what you learned about Patagonia’s ideals, how do you think the company determines what possible ventures will be both business practical and environmentally friendly?

Henderson printing is a mid-level company. The company operates some compensation models for its personnel. Through these models, the employees receive rewards for the labour they render to the enterprise. Henderson printing pays its employees by giving them regular salaries for their services. These are direct payments for the work they do in this company. Secondly, the employees are given pay raises even though this depends on the employee’s initiative to ask for a pay rise from the owner (Davis, 2013). Lastly, the employees are also accorded some merit bonuses every Christmas time. The merit bonuses are based on their contribution to

The purpose of this assignment is to figure out exactly what managers do and the how the outlook of management and the job of the manger varies from person to person and from environment to environment. Dr. Sey’s holds a managerial position at the County of Los Angeles and his work is

As mentioned, a key L.L. Bean response to their strengths and weaknesses was to provide a mixture of traditional and non-traditional rewards to the employees. In conjunction with base compensation, the organization provided performance-based bonuses, profit sharing, and healthcare benefits as forms of traditional rewards. These traditional awards are closely aligned to monetary awards since these benefits are commonly used and expected in today’s business environment. Although the effectiveness of monetary rewards is questionable, at minimum these rewards provide a direct reciprocity to the employee for their

After reviewing the Wilson Brothers Case Scenario, as Director of Human Resources for the organization, what conclusions can you draw with respect to the status of the company’s compensation strategies that are currently in place? What would you do to begin to address this situation? (3 Marks)

A well-articulated compensation philosophy drives organizational success by aligning pay and other rewards with business strategy. It provides the foundation for plan design and administration and anchors current and future plans to the company's culture and values (Kaplan, 2006, p.32). Recognizing and rewarding achievement is the cornerstone of the company A’s compensation philosophy. The mission of the company is to attract, select, place and promote all individuals based on their qualifications. The company believes that performance-based compensation helps attract, develop and retain talented professionals. In addition to base pay which based upon local market conditions and targeted to be above market, the company provides the following types of potential compensation to reward performance:

1) Evaluate Patagonia’s Workbook Process. Would you recommend to Patagonia’s management that they continue the process? Why or why not?

The key components to developing effective Reward Strategy is to ensure that there are clearly defined goals to meet business objectives, that the reward programme meets the needs of both the organisation and its employees, and to ensure that this is then supported by effective HR policies. In order to ensure these criteria are met there are a number of factors which influence how reward strategy is developed which include both internal factors within the organisation itself, as well as external factors outside the organisation.

1. Patagonia uses personnel and cultural control to apply this strategy. For personnel control, the company hires people who are as passionate about environment as Yvon.

In 2007, the floor manager of Engstorm auto mirror and his assistant realised that the previous rough quarters that the company went through were due to a lack of motivation coming from the workers. As if having a bad productivity wasn’t enough, the quality of the products offered by the company started declining. The employees started to get really angry because they weren’t paid a bonus each month as they were used to, they started to delay the deliveries, putting the company in a bad situation, they began to see that there’s no point into participating, they stopped taking interest in the company. Therefore, when the bonuses stopped, the workers responded with anger and suspicion, as if something that rightfully belonged to them had been taken away. Let’s go back to the late 1990’s when Ron Bent was hired by Engstorm Auto Mirror, succeeding to a manager who resigned on working for the company. Straight away, he decided that he would try to install a Scanlon Plan within the company, to boost its performance by offering bonuses to the

1. Strategy: Patagonia’s product differentiation as their strategy, through CSR, which involves sustainability, philanthropic initiatives, moral obligations, and reputation. They operate in ways to secure long-term economic performance by avoiding short-term behavior that is socially detrimental or environmentally wasteful. They do this all while keeping their quality high and having their core consumers in mind.

Reward Management (RM) has been defined as the distribution of monetary and non-monetary rewards to employees in an effort to align the interests of the employees, the organisation, and its shareholders (O’Neil, 1998). In addition O’Neil (1998) also suggests that a RM system can serve the purpose of attracting prospective job applicants, retaining valuable employees, motivating employees, ensuring legal requirements relating to direct and indirect rewards are not violated, assisting the company in achieving human resource and business objectives, and ultimately assisting the organisation in obtaining a competitive advantage.

Create a new product line that appeals to the previously mentioned demographic. In order to avoid cannibalization of sales, Patagonia should ensure that the new line has that same “dirtbag” ethos but should just appeal to the younger generation. Patagonia should then focus on transitioning the younger generation’s demand into the classic style as they get older.

We believe the new incentive system was needed and reasonable because the accounting-based incentive system, where EPS was a measure of performance, raised valid concerns. The first being an agency problem. This existed within the old system as manager’s interests were not aligned with those of stockholders. EPS had improved steadily at a rate of 9% annually; however, the share price had increased only slightly in comparison. Therefore, the company’s stockholders had hardly benefited. The second issue was the use of subjectivity in granting bonus awards. These awards were given out even when their entity had not performed well. Managers began “politicking”, meaning they would try and convince their evaluators they performed better than the results had shown.

Instead of jumping to different achievement goals as problems arise, the visions and beliefs should have been determined first and that would help shape the overall goal of the company. While working towards goals such as profitability and growth, the visions and beliefs help keep employees in line and to some extent control the minimum expectations of the development of products, thus possibly lessen or avoid problems that did arise. The incentive scheme were not properly designed to take into account effects of employee actions and the impact it would have on the company as a whole and other stakeholders. It should some what reflect and reiterate these visions instead of promoting and motivating employees to be self interested in their own affairs and achieving the targets at “all costs”. All in all, there were minimal controls and checks in place, it was more of a one way push towards the goals and not looking back