Sushma Industries: The Gordian Knot of Compensation Design
(7 pages of text)
Sushma Industries Private Limited (SIPL) wanted to accelerate its growth after two decades as a small enterprise. Enabling growth required having the right talent in place, by first attracting these employees, and then evaluating and appropriately rewarding their performance. The new chief executive officer hired a human resources specialist to design and implement a compensation structure to recognize the changing competitive environment and to align SIPL's human capital strategy with the organization’s strategic goals. The human resources specialist faced the challenges of establishing a new compensation structure in a growing organization, timing the change appropriately in the organization's growth journey, and aligning and positioning it to fit within the current organizational and industry context.
The case is suitable for undergraduate, MBA, postgraduate, and executive education core courses in organizational behaviour and human resource management. It is also suitable for elective courses on compensation and benefits, strategic human resource management, and change management. The case offers students the opportunity to
- understand the importance of aligning a compensation reward strategy with an organization's strategic positioning and core capabilities, and with the existing organizational, industrial, and environmental contexts;
- follow a step-by-step approach to setting up and administering a new compensation and total rewards structure within an organization; and
- experience the challenges of revising compensation structures and addressing the associated change management issues.
India, Small, 2016
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