Questions Kooistra Autogroep Essay

2. Evaluate the calculateing, cognitive operation standard, and incentive systems used at Kooistra Autogroep. What changes would you recommend, if any(prenominal)?Bud sterilizeing systemThe CEO introduced a formal annual budgeting process. The main get of this budgeting system was to determine the lucre profit targets for the twelvemonth. The net profit target is the beau mondes tax revenue minus the controllable expenses. These targets were for the play alongs departments and should help with decentralization of the company. The budgeting process was ment to be bottom-up. This means that the coach-and-fours of the departments could prepare the budgets and the CEO and CFO then reviewed these budgets. to the highest degree managers are unexperienced with budgeting and the review of the CFO and CEO would lead to a countersign so that the managers would get more and more confident with budgeting.This would help the decentralization. The auto industry is an industry, which i s really dependable on the economic conditions. So the budget made at the beginning of the year is non always a feasible budget. Reviewing the budget a few times a year could change this. The CEO helps out sometimes when the budget target believably is not going to be made. and the managers cannot depend on this. exertion measurementThe new performance measurement now includes not permitd financial information but too nonfinancial information. The performance measurement system is used to communicate the companys objectives to the personnel. The objects that are metric in the performance are the most important objectives. The performance measurements provide the managers with the information to do their job properly and it provides feedback to the top commission round the performance of the managers. The company uses Balanced Scorecard on a hebdomadally basis. The balanced scorecard provides key metrics for the managers magnetic inclination of targets and it provides an indication of the progress towards budget target.Besides the balanced scorecard the managers get also a monthly report, which is more detailed about the companys operations. Recommendation the balanced scorecard is used to measure the managers performance for different factors. These factors are financial and nonfinancial. But it is not very draw in what the targets are. Every dealership has to have a make it of gross revenue of 2% but there is not given any further financial of nonfinancial performance indicator. Incentive systemA major change for the Kooistra Autogroep was the expansion of the pay-for performance system. The pay-for performance system already existed in the company but only for a few gross sales great deal. But this is limited and not fully covered for all the sales peck. Because of the already excising contract and rejecting the pay-for performance grant system not every(prenominal) sales person is accounted with pay for performance. This could lead t o disorder and unfair situation. Because when its not going well with the economy and so with the dealerships sales the sales people with the pay for performance are accounted for the less sales. But the sales people with the normal salary contract are not accounted for the fewer sales.to a fault in normal situations the sales people with the pay-for performance system bequeath try to do their best because their salary depends on their performance. While for the sales people with the normal contracts its not as much depended on their performance. For the management team the pay-for performance does its work for every member. So its fairer. The managers could also receive a bonus reduction when some criteria were not met. But its said that this would be a very subjective close and it was not really clear on what criteria it depends. This should be changed and made clear on what criteria or totally deleted. Note It is said that no bonus will be paid for below or above target perfor mance, which is strange. Because as a company u would want to have above target performance.Further more the pay for performance system is a relatively unknown system in Dutch companies and the personnel of the company are not really pleased with this system. So it would be period of time to think about for the company to introduce the system quietly. This could be do for example by starting with a tradional bonus system and succeeding(a) to that also a pay for performance system. So using both(prenominal) systems for a few years and then switch to only a pay-for performance system.