The Proposed Merit Pay Program: Should the Winners Take All? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Proposed Merit Pay Program: Should the Winners Take All?
Dr. Jeff Foreman, Professor and Chair of the Marketing Department at Carroll State University, had just left a meeting with the Dean of the College and other department chairs about the upcoming salary increase program. Since pay increases had been small in recent years, Foreman was quite pleased that there would be four percent merit money this year, in addition to the previously announced two percent across-the-board (ATB) increase. The ATB raise would be effective in July, and the merit pay would be implemented the following January. At the meeting, the Dean of the College informed the chairs that the merit-pay policy was subject to change, in order to reward the highest performing faculty. He stated that at a recent meeting with the Provost, the idea of a more "aggressive" approach to rewarding top-performing faculty members was discussed. This approach, it was advanced, would help the University retain its most productive and most mobile faculty members - those who had the talents to really advance the programs of the school. Subsequent discussion at the chairs' meeting was animated, and they expressed a variety of opinions about the advisability of the proposed changes in the merit-pay policy. As the meeting ended, the Dean asked each of the chairs to study the proposal and make a recommendation about the pay plan with a justification, noting that the group would meet again to make a policy decision for the College. Back in his office, Professor Foreman reviewed the existing policy on salary increases, salary information on his faculty, and their performance ratings for the last three years. He thought about the philosophy underlying the aggressive approach to compensation and the implications of rewarding only the top performers. But he also wanted to look at the actual impact of the proposed change on the salaries of his faculty members. What would it do to salary differentials? How would it affect faculty motivation?
Swot Analysis of "The Proposed Merit Pay Program: Should the Winners Take All?" written by Thomas R. Miller includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Merit Faculty facing as an external strategic factors. Some of the topics covered in The Proposed Merit Pay Program: Should the Winners Take All? case study are - Strategic Management Strategies, Compensation, Human resource management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the The Proposed Merit Pay Program: Should the Winners Take All? casestudy better are - – supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy,
challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of The Proposed Merit Pay Program: Should the Winners Take All?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Proposed Merit Pay Program: Should the Winners Take All? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Merit Faculty, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Merit Faculty operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of The Proposed Merit Pay Program: Should the Winners Take All? can be done for the following purposes –
1. Strategic planning using facts provided in The Proposed Merit Pay Program: Should the Winners Take All? case study
2. Improving business portfolio management of Merit Faculty
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Merit Faculty
Strengths The Proposed Merit Pay Program: Should the Winners Take All? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Merit Faculty in The Proposed Merit Pay Program: Should the Winners Take All? Harvard Business Review case study are -
Effective Research and Development (R&D)
– Merit Faculty has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study The Proposed Merit Pay Program: Should the Winners Take All? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Merit Faculty in the sector have low bargaining power. The Proposed Merit Pay Program: Should the Winners Take All? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Merit Faculty to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Merit Faculty has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Merit Faculty to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Merit Faculty is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Leadership & Managing People industry
– The Proposed Merit Pay Program: Should the Winners Take All? firm has clearly differentiated products in the market place. This has enabled Merit Faculty to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Merit Faculty to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Merit Faculty has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Merit Faculty has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Merit Faculty has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Proposed Merit Pay Program: Should the Winners Take All? Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the The Proposed Merit Pay Program: Should the Winners Take All? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to recruit top talent
– Merit Faculty is one of the leading recruiters in the industry. Managers in the The Proposed Merit Pay Program: Should the Winners Take All? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Merit Faculty has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in The Proposed Merit Pay Program: Should the Winners Take All? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Leadership & Managing People field
– Merit Faculty is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Merit Faculty in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Merit Faculty are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses The Proposed Merit Pay Program: Should the Winners Take All? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Proposed Merit Pay Program: Should the Winners Take All? are -
Slow decision making process
– As mentioned earlier in the report, Merit Faculty has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Merit Faculty even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High operating costs
– Compare to the competitors, firm in the HBR case study The Proposed Merit Pay Program: Should the Winners Take All? has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Merit Faculty 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Merit Faculty supply chain. Even after few cautionary changes mentioned in the HBR case study - The Proposed Merit Pay Program: Should the Winners Take All?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Merit Faculty vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Thomas R. Miller suggests that, Merit Faculty is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Skills based hiring
– The stress on hiring functional specialists at Merit Faculty has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Proposed Merit Pay Program: Should the Winners Take All?, is just above the industry average. Merit Faculty needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Merit Faculty is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Merit Faculty needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Merit Faculty to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Proposed Merit Pay Program: Should the Winners Take All?, in the dynamic environment Merit Faculty has struggled to respond to the nimble upstart competition. Merit Faculty has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Merit Faculty needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Proposed Merit Pay Program: Should the Winners Take All? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Merit Faculty has relatively successful track record of launching new products.
Lack of clear differentiation of Merit Faculty products
– To increase the profitability and margins on the products, Merit Faculty needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities The Proposed Merit Pay Program: Should the Winners Take All? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study The Proposed Merit Pay Program: Should the Winners Take All? are -
Manufacturing automation
– Merit Faculty can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Merit Faculty can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Merit Faculty is facing challenges because of the dominance of functional experts in the organization. The Proposed Merit Pay Program: Should the Winners Take All? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Merit Faculty can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, The Proposed Merit Pay Program: Should the Winners Take All?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Merit Faculty can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Merit Faculty to increase its market reach. Merit Faculty will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Merit Faculty to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Merit Faculty in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Merit Faculty to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Merit Faculty to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Merit Faculty to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Loyalty marketing
– Merit Faculty has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Merit Faculty can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Creating value in data economy
– The success of analytics program of Merit Faculty has opened avenues for new revenue streams for the organization in the industry. This can help Merit Faculty to build a more holistic ecosystem as suggested in the The Proposed Merit Pay Program: Should the Winners Take All? case study. Merit Faculty can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats The Proposed Merit Pay Program: Should the Winners Take All? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Proposed Merit Pay Program: Should the Winners Take All? are -
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Merit Faculty can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Merit Faculty with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Merit Faculty business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Stagnating economy with rate increase
– Merit Faculty can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Shortening product life cycle
– it is one of the major threat that Merit Faculty is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Merit Faculty.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Merit Faculty can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study The Proposed Merit Pay Program: Should the Winners Take All? .
Technology acceleration in Forth Industrial Revolution
– Merit Faculty has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Merit Faculty needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Regulatory challenges
– Merit Faculty needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Merit Faculty in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing wage structure of Merit Faculty
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Merit Faculty.
Weighted SWOT Analysis of The Proposed Merit Pay Program: Should the Winners Take All? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study The Proposed Merit Pay Program: Should the Winners Take All? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study The Proposed Merit Pay Program: Should the Winners Take All? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study The Proposed Merit Pay Program: Should the Winners Take All? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of The Proposed Merit Pay Program: Should the Winners Take All? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Merit Faculty needs to make to build a sustainable competitive advantage.