Refer to Case 14.43.

Janice examined the performance-related pay system used to reward the managing directors, and has prepared a report that recommends three changes

• Add a more long-run emphasis to the bonus system.

• Base rewards on achieving company-wide as well as divisional performance measures.

• Include targets that are designed to consider the specific competitive challenges facing the managers of each division.


1. Suggest how the three proposed changes could be included in the bonus plan for each divisional managing director. Consider each division and be specific in your suggestions.

2. Outline any difficulties that could arise in implementing the changes to the bonus system.

3. Janice has also recommended that the performance measurement system should make greater use of benchmarking and incorporate continuous improvement to improve overall company performance. Why would she recommend benchmarking? Suggest the specific steps that would need to be undertaken to introduce benchmarking at the Newspaper Division.

4. Suggest how continuous improvement processes could be incorporated into the performance measurement system at the Cable Television Division. Provide some examples of performance measures to illustrate your answer?

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