Management Incentives
The sales department had sole responsibility for the price, sales mix, and deliuery
schedules. The plant manager had responsibility for plant operations and
plant profits.
Plant managers were motiuated to meet their profit goals in a number of
ways. First, only capable managers were promoted, with profit performance be'
ing a main factor in determining capability. Second, plant managers'compensation
packages were tied to achieving profit budgets. Third, each month a
chart was compiled showing manufacturing effrciency2 by plant and division.
These comparative efficiency charts were highly publicized by most plant managers
despite the inherent unfairness in comparing plants that produced different
products requiring different setup times, etc. Some plants ran internal
competitions between production lines and departments to reduce certain cost
items, rewarding department heads and foremen for their accomplishments.