Aligning Incentives with Impact: Designing Performance Based Rewards for Long-Term Organizational Sustainability

Ooi, Cheong Zhek (2024) Aligning Incentives with Impact: Designing Performance Based Rewards for Long-Term Organizational Sustainability. Masters thesis, Tunku Abdul Rahman University of Management and Technology.

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Abstract

This project provides an in-depth examination of Asian Secrets Sdn Bhd, a Malaysian lifestyle concept store that showcases the diverse cultural heritage of Asia through its product offerings. The company, which has been significantly impacted by the COVID-19 pandemic, faced substantial operational challenges that necessitated a dramatic reduction in its workforce and a reliance on interns for maintaining daily operations. The core of the discussion revolves around the company's transition from a robust staffing model to a lean operational structure, driven by the economic constraints imposed by the Movement Control Order. This shift raises critical concerns about the company's sustainability, given its heavy reliance on an intern-based workforce, which may not provide the stability or the depth of knowledge required for long-term success. The project the need for strategic adjustments in the company's workforce management and development practices to mitigate the risks associated with high turnover rates and the reliance on less experienced interns. Proposed solutions include the introduction of revised Key Performance Indicators (KPIs) and performance-based incentives to better align the interns' contributions with the company's strategic goals. This approach aims to enhance productivity, motivation, and employee engagement, thereby fostering a more stable and effective workforce. Additionally, the project underscores the importance of implementing a phased KPI system to ensure that interns can effectively contribute to the company's objectives without being overwhelmed by overly complex metrics. This strategy is critical not only for maintaining operational efficiency but also for supporting the interns' professional development and integration into the company's culture. In conclusion, the project is aiming for a holistic approach to addressing the challenges faced by Asian Secrets, advocating for policies that support both immediate operational needs and long-term strategic goals. This includes enhancing the company's ability to attract and retain talent, improving intern engagement and productivity, and ultimately securing the company's cultural and operational legacy in a competitive market.