A CASE STUDY ON GINTONG HIYAS

I. POINT OF VIEW
The case is analyzed through the point of Elizabeth Santos. As she joined her
family in managing the business, she redesigned the store management systems as
well as procedures. Moreover, she is the one who implemented the individual
incentive system on the two Hiyas branches she is currently supervising. Her
observations as the manager would be valuable in coming up with solutions to the
problem Golden Hiyas is facing.

II. STATEMENT OF THE PROBLEM

It is the role of managers to motivate their employees in order for the latter to
have better performance in their respective tasks. With that, Elizabeth employed the
individual incentive system which resulted to higher profitability. However, it also
resulted to poor customer service and created conflict among salespersons due to
unhealthy competition which instigated Elizabeth to think of modifying the current
incentive system.

The statement of the problem is:

“What alterations in the incentive system does Elizabeth need to do in order to

achieved high profitability without sacrificing customer service, healthy working
environment, and good relationship among salespersons?”

III. OBJECTIVES
The objectives of this case study are the following:
 To determine alternative courses of action
 To come up with the best solution to the problem at-hand
 To identify what other schemes can motivate employees to perform their
best on their respective tasks

IV. AREAS OF CONSIDERATION

Gintong Hiyas is a store offering hand-made gold and jewelries owned and
personally managed by the Santos Family. With the trend of building shopping malls,
they took advantage of it and open four new outlets totaling to five Gintong Hiyas
stores. However, due to difficulty managing and supervising the five stores, they
closed down the main outlet.
After finishing her bachelor’s degree, Elizabeth Santos, the youngest among the
children, joined the family business and was tasked to managed one branch. She
greatly contributed to the success of their business by redesigning store management

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 systems and procedures, and introduce innovations such better accounting and
bookkeeping systems. She was also able to increase her store’s sales, thus, another
outlet was placed under her management.
One major input made by Elizabeth to motivate her employees is the
implementation of individual incentive system. She would reward a bonus to the
salesgirl who could exceed daily quota which is equivalent to 30% of their daily
wage. This extrinsic motivator increased the store’s sales; however, it brought some
problems. Customer service was compromised since salesgirls would not serve
clients already assisted by one to avoid conflicts. It created an unhealthy competition
among employees, somehow tearing the relationship they had before.

V. ALTERNATIVE ACTIONS
Due to the problems brought by the individual incentive system, Elizabeth could
opt for the following alternative courses of action:
a. Group Incentive System where every salesgirl of that certain branch would be
given a bonus when the team exceeds the monthly quota. This would create
camaraderie among the employees, and strengthen their teamwork skills.
Competition would lessen as there is no need for them to fight over a single
customer, thus, they can provide excellent customer service. However, this
might instigate some employees to become freeloaders and highly depend on
the efforts of one individual.
b. Modified Individual Incentive System where the existing scheme is retained
but will be ensured that before rewards were to be given, all employees are
performing their best. This would lessen competition and lead top salesperson
to aid those who are performing poorly. Also, this would not compromise the
company’s profitability. Yet, new issues might arise from this setup such as
“blame game”.
c. By Branch Incentive System can also be implemented where employees of
various outlets would have corresponding monthly quota, and the branch who
could surpass it would be rewarded. This would create a healthy competition
among branches, thus causing employees of each branch to perform better.
They would be motivated to do their jobs excellently and not slack off as their
individual performances could affect that of the team’s and their opportunity
to get a bonus. This would eliminate conflicts among employees of the same
branch, and might build camaraderie once again. Yet, this would be costly on
the part of the management since they have to give rewards not individually,
but to all employees of a branch exceeding the sales quota.
d. Last course of action would be the removal of the incentive system. Instead of
extrinsic motivators, the company could opt for intrinsic ones where the
employees can gain autonomy, purpose, and connection in their jobs. Through
that, salespersons would not only be motivated because of the rewards but
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 because they are satisfied with their jobs. Elimination of the incentive scheme
would lessen the cost of company, but it comes with a price. Removing it
might demotivate the employees because the incentive system has already
been implemented and was looked forward to. The demotivation could affect
the company in terms of profitability, and the employees’ performances
leading to poor customer service.

VI. DECISION
The implementation of the individual incentive scheme has brought an increase in
sales, but also issues on the workplace. Four alternative courses of action were
presented, but only one would bring more positive consequences than negative ones
to the company. A decision matrix is prepared to see what is the best alternative
among the four with respect to four criteria: profitability, job satisfaction, customer
satisfaction, and healthy working environment. Each alternative would be given a
score and the one with the highest total score would be the alternative to implement.
The scores are solely based on personal views.

Alternatives Profitability Job Customer Healthy Total

(30%) Satisfaction Satisfaction Working
(25%) (25%) Environment
(20%)

A 28 24 25 18 95

B 30 23 20 15 88

C 27 25 25 20 97

D 25 20 20 17 82

VII. ANALYSIS
Based on the table above, alternative C pertaining to by branch incentive system
garnered the highest total score. As mentioned, Branch Incentive System would
create a healthy competition among the four branches, and would create camaraderie
among employees of each branch and improve their teamwork. Profitability may not
be the same as brought by the individual incentive system since sales quota would
not be daily but monthly. However, the company may opt to have greater sales quota
than the existing daily quota. Job satisfaction is perceived to increase since
salespersons have to work together in order to achieve their common goal. Through
cooperation, they can rebuild their relationship that was tainted by unhealthy
competition, and be happier and more contented with their jobs. Customer

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 satisfaction would not be compromised since employees would not fight over a
single customer, but rather give their best performance in serving customers. Lastly,
since unhealthy competition among salespersons of one branch would be eliminated,
they would become freer in conversing with each other, create a bond, and would not
be too afraid in crossing lines just to avoid conflict. With that, employees could look
forward to going to work every day. This is the surest way to keep the company’s
profitability without sacrificing customer and job satisfaction.

VIII. CONCLUSION
Due to the individual incentive system implemented by Elizabeth in the two
branches under her supervision, she was able to increase their sales, but it caused
problems in providing excellent customer service and conflict among employees.
With her observations, she was urged to think of ways on how to modify or what to
do in general with the incentive system. As four options are presented, one is the
best solution to the problem at hand. By branch incentive system will be
implemented among the four Hiyas outlets, and bonus will be given to all
salespersons of the store who exceeded the monthly sales quota imposed by branch.
Doing so, the company is expecting to eliminate the unhealthy competition brought
by the individual incentive system, and envision to bring back a healthy working
environment. Since the existing incentive scheme caused employees not to talk to
each other, the new incentive system is expected to strengthen their bond and allow
them to create a good relationship with each other by cooperating as it is essential to
achieve their common goal. Moreover, since the individual incentive system has
instigated poor customer service because of employees getting afraid of conflicts, the
new system carries hope that employees would perform better at providing excellent
customer service. Satisfying the needs of customers as well as meeting their
expectations is the surest ways in increasing sales. When clients feel that they are
valued, they have the tendency to develop loyalty to such brand which is highly
valuable in a business. Company has the responsibility also to create job satisfaction
wherein employees are motivated to perform their best, and continue working for the
business. Through the new incentive system, the business can still thrive without
sacrificing their providing of excellent customer service and a healthy working
environment. A good manager focuses not only on non-human resources, but most
importantly to the human ones.

IX. RECOMMENDATIONS
The company employed extrinsic motivator specifically, the incentive system to
help motivate employees in doing well with their tasks. It is a good initiative as it
ensures employees to perform well, thus, boosting sales. However, based on the
article published by Harvard Business Law, introducing rewards to employees only
buys temporary compliance because in the long run, it would only produce unwanted
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 consequences. Rewards rupture relationships as what has been observed on Golden
Hiyas’ employees since they are forced to compete against each other, thus,
destroying their cooperation. Moreover, people who are merely forced to do tasks are
no way good than those who are fully interested in their job.
With that, it is recommended to cut back on rewards particularly money as the
principal motivational force in the workplace, but rather try investing on intrinsic
motivations which can make employees value their jobs more. This can be done
through providing the employees the following:
a. Autonomy
Salespersons would be more motivated when they are given the chance to do
things their own ways which can make them feel in control of their jobs.
Elizabeth could give her salespersons the opportunity to strategize and set up
their own target sales.
b. Purpose
Employees might perform better and get more interested with their jobs if they
feel that their hard work has a purpose. The company can have activities or
fundraising events wherein salespersons can showcase their skills, and their
rewards would be given to a chosen charity. By that, they can improve their
teamwork and cooperation, and at the same time, the company can practice their
social responsibility.
c. Belongingness
Employees are also humans who crave for belongingness and social
interactions. It would be beneficial for the company if the employees get along,
thus creating a healthy environment where they excited to go to everyday. They
would be motivated to go to work resulting to less absenteeism. The company
can foster camaraderie through planning out team building activities, go-
togethers, or even an after-work dinner where Elizabeth can treat her employees.
Through this, she could create a bond between her and them.

The above mentioned are just some of the intrinsic motivators Elizabeth
can apply to her managed stores. It does not necessarily mean that she had to replace the
current motivator, but she could add these up to get better results. In the long run, money
incentives could instill a notion to the employees’ minds that they only have to work hard
when they can get something out of it. This is the reason why intrinsic motivators are
more beneficial for a business to thrive. Intrinsic and extrinsic motivators are not
competitors, but a string that must be tied together for the success of the company.