5.9. Subordinates
Managers should monitor the performance of subordinates but should give them latitude in making decisions.
Subordinates should be rewarded (e.g., salary increases, merit bonuses) on the basis of results that improve divisional profitability. The optimum pay raise is the minimum pay increase that will yield the maximum productivity increase. Managers whose decisions have hurt profitability should be called to account. They should learn from their errors. If too many errors have been made, a replacement might be appropriate.
Compensation to subordinates should be competitive with other companies in the industry. No limit should be placed on salaries or the successful employee may quit.
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