Introduction

 Dr. Jack Perry is a dentist who graduated from Ontario University.

 He runs a dental clinic at Cromwell, Ontario. The clinic faces competition from three
other clinics in the town. Two of them work for a few hours and there’s another dentist
who has been in business about five years longer than Perry’s.
 Dr. Perry is quite content with the financial success he has achieved with an annual
increase of 15% per year.
 After his interaction with a new recruit, Sandy, Dr. Perry feels the need to increase
productivity of his staff. He realizes that they have been low on motivation which is
hampering the overall productivity of the firm.
 He recalls a conference by a business consultant that he attended in 2005 in Chicago
which was on staff motivation and profit sharing.
 The conference stated two approaches to improve the staff motivation and thus
increasing the overall output of the firm through employees’ substantial inputs.
 Dr Perry now faces a situation whether to implement one of these programs or not and
the impact it could have on the business.

Key Objective
 To understand the role of performance based pay system in an organization and its
impact on overall performance.
 To determine the factors related to employee motivation and employee engagement in a
firm and assess its effect on the firm.
 To understand when to implement performance based pay system and team
coordination pay system that essentially involves equal distribution of profits among
the team.

Problem
 Though Perry was a very brilliant doctor who surfaced on top of his class and was
successful in his town he lacked the insight and the expertise to manage his employees
and implement motivational strategies that would help him realize more profits and
expand his business.
 He lacks a precise program on how and when to implement what he has been learning
through the seminars on staff motivation.
 His dependency on monetary tools to retain his employees and not exploring the
extensive variety of alternatives in employee motivation and retention.
  Employees at Dr. Perry’s were satisfied with the pay. However, there was no pressure
from him to actually sell or push any of the services forward. This clearly indicates that
none of them were actually proactive in their jobs.
 Employees lack morale and motivation to further grow the business. Dr. Perry was
aware about the same but lacks business management skills and is unsure about
implementing the new strategies on his personnel.
 Dr. Perry lacks a clear vision. He is unsure of which way he would like to take his
business forward in the years to come.

Solution
The case describes two options that Dr. Perry can implement to increase productivity – One is
profit sharing through team co-ordination and the other is employing Hygienists on contract
and paying them based on incentive program.

We would like to go with the first option of Profit sharing through Team coordination. The
justification and the various strategies that he can implement in order to boost morale and
motivate his employees is given below.

 As compared to Hygienists approach, profit sharing involves the entire team’s

contribution. This would give everyone a chance to increase their productivity. In other
case, irrespective of the efforts put in by the hygienists, receptionists and assistant
would not be motivated enough as their pay would not be based on productivity and
hence no incentives would be earned.
 Dr. Perry needs to set and define the vision and the goals so as to enable his team to
work towards the same. This would set a challenge for the team and would be a
constant motivator to attain the same.
 He can call in a meeting to explain his approach on profit sharing, how it works and
how much an individual can make in a year when he gives his optimum output. This
would enable him to realize the interest of his employees in such a program and their
willingness in the same.
 Dr. Perry can also focus on other beneficial programs like continuing education which
would motivate his employees to learn while working. Furthermore, he can introduce
sales training programs which would boost confidence of the employees while making
sales.
 Since the program is quite new, Dr. Perry should implement a constant feedback in
order to check the success of the program and see an effect in the profit increase. Any
loopholes, if present, can be evaluated and rectified with revising the program. The
program should be given a positive approach that drives the employees to work harder
and relate to the goals set.

Managerial Learning
 It is very essential for any firm to define its goal to its employees so that they know
which direction they are working in and they can relate to the firm.
 We understand that motivation is an important factor in a firm’s financial success. If the
firm’s employees are highly motivated, then their dedication towards work will increase
substantially resulting into higher outputs.
 A manager / entrepreneur should encourage more involvement and participation of his
employees towards their work through various programs.
 Employees of any firm are more inclined towards the pay they receive. If an incentive
based program is introduced, then the chances of them working diligently are more.
Furthermore, it also optimises their output and keeps them motivated as this would
result in higher pay.