Running Head: LINKING COMPENSATION TO STRATEGY

Linking Compensation to Strategy

Name.

Institution.

Date.
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Introduction

An innovative strategy includes the addition and motivation to new customer purchases,

the expansion of markets and the creation of new products or services as well as the introduction

of new markets. A company can find the current move to a new strategy of innovation difficult,

(Hao, & Song, 2016). Innovative thinking takes priority because of its relevance and the ability

to be an innovative company. This study focuses on Mindful Toys whose purpose is to expand

the minds of children from 1 month to 100 years old. This essay addresses the following

questions in relation to evaluation and compensation of employees;

Explain the process by which a company would link individual employee performance to

addressing the company objectives.

Before an organization links the performance of its employees with its goals, it needs a clear

understanding of where it will be in future really. In order to do this, a company may take the

following step:

a) Defining in writing key objectives for the company. The management could transform

the objectives into an action plan to achieve the company's objectives. This can be

achieved through the identification of important steps to achieve the vision of the

company.

b) The management should then list employees who are responsible for the different aspects

of the plan within the organizational structure. For example, to determine the role played

by top management versus entry-level staff.

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c) Presenting the plans to the top management team so that management of the company is

on the same page. The management team discusses the action plan and the role of

managers, in order to understand the expectations of businesses.

d) Schedule a meeting of employees in order to share corporate objectives and the role of

employees to achieve them. This is by providing employees with an idea of how these

goals can be achieved.

e) Holding workshops related to the corporate objectives. For example, employees should

be trained to use sales techniques if the aim is to increase sales.

f) During the interviews, sharing the company objectives and vision when recruiting new

staff is essentially important. The interviewer could ask questions about goals in order to

determine whether candidates have the skills and values to achieve these goals.

Explain how Mindful Toys can link their compensation and evaluations to the company’s new

objectives and innovation strategy.

In three ways, compensation can be linked to the innovation strategy. The very first step

is identifying the business main objectives and purpose. In order to meet market requirements,

Mindful Toy main objectives are to improve the attributes of at least 20 products, develop five

new markets and launch at least 15 products. The company has five main objectives but this

analysis is limited to the first three objectives, since the two others concern recruitment. The

company's innovative strategy will guide the compensation strategy (Hao, & Song, 2016).

The second step is for the organization to identify a performance list to ensure that these

goals are achieved. Usually senior management teams become aware of the organizational

objectives during annual meetings. This step is an important step for Mindful Toys as it will

guide to achieving the first-step objectives. Senior managers, especially staff executives, are
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encouraged to produce the employee behavior list, which will help in improving product

qualities, innovating new products as well as creating new markets to increase its sales.

Thirdly, is the preparation of compensation plan. Mindful Toys may adopt this since it is

easy to know the company’s objectives and purpose. In order to encourage employees to be

innovative, the company should then choose the right motivation. Profit sharing, bonuses,

inventory options and additional vacation are important. In cases where the company does not

know what payment covers the plan, it can partner with payout experts. The company should

notify its employees in regard to compensation plans (Murphy, Cleveland, & Hanscom, 2018).

The company might not be interested in developing a plan and neither its employees would know

their wages or benefits.

What methods of performance evaluation might Mindful Toys use?

I would recommend two performance evaluation techniques for Mindful thoughts.

The company should use a performance checklist. This checklist will assist in valuation

each employee’s performance based on the daily activities carried out. This system will allow to

practically evaluate the availability of workers, whether they are present or absent in their daily

routine. They could also reward workers who exemplarily perfume well in their duties. This is

because the system of compensation for the company is more rewarding than innovative

behavior. The company may develop a list of behavior patterns which can promote and confirm

innovation by its staff group prior to weighing them with predetermined values.

The second approach is Management by Objective. The employer can determine the

employee's ability to achieve organization’s objectives. The reason for this method is that

success and failure can be very objective and easily defined. MBO is essential particularly for
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organizations which have strategic objectives and whose staff are oblige to meet to the success of

the business (Murphy, Cleveland, & Hanscom, 2018). The ability to achieve goals is usually a

success for every company through MBO, which Mindful Toys could adopt.
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References.

Hao, S., & Song, M. (2016). Technology-driven strategy and firm performance: Are strategic

capabilities missing links?. Journal of Business Research, 69(2), 751-759.

Murphy, K. R., Cleveland, J., & Hanscom, M. E. (2018). Performance appraisal and

management. New York: Sage Publications.