Dow AgroScience Contingent Pay Plan
2
Please read the following case study then answer the questions bellow:
CASE STUDY ((Selecting a CP Plan at Dow AgroSciences))
Dow AgroSciences LLC, based in Indianapolis, Indiana, is a global leader in providing pest management
and biotechnology products that improve the quality and quantity of the earth�s food supply and
contribute to the health and quality of life of the world�s growing population. Dow AgroSciences employs
approximately 6,000 people in more than 50 countries and has worldwide sales of approximately US$ 3
billion. Dow AgroSciences is a wholly owned subsidiary of the Dow Chemical Company.
Consider the following information about Dow AgroSciences:
�Mission. Dow AgroSciences delivers innovative technology that exceeds market needs and improves
the quality of life of the world�s growing population. We do this through responsible pest control, aiding
the production of an abundant, nutritious food supply, and the use of plants as a renewable agricultural
resource to produce new and improved agricultural outputs.
�Vision. We are a premier company applying chemical, biochemical, and genetic solutions to agricultural
and specialty market needs.
�Core Values. To ensure the prosperity and well-being of Dow AgroSciences employees, customers,
and shareholders, cumulative long-term profit growth is essential. How we achieve this objective is as
important as the objective itself. Fundamental to our success are our core values we believe in and
practice:
o� Employees are the source of Dow AgroSciences� success. We communicate openly, treat each
other with respect, promote teamwork, and encourage personal initiative and growth. Excellence in
performance is sought and rewarded.
o� Customers receive our strongest commitment to meet their needs with high-quality products and
superior service.
289 290
o� Products are based on innovative technology, continuous improvement, and added value for our
customers and end users.
o� Our conduct demonstrates a deep concern for human safety and environmental stewardship, while
embracing the highest standards of ethics and citizenship.
In light of the Dow AgroSciences� mission, vision, and core values, what type of CP plan is likely to be
successful? Explain the rationale behind your choice.
3
Business organizations focus on providing good services to ensure customer
satisfaction. The result of the organization effort is reflected in the form of growth and
organization sustainability. Organizations ensure that the employees are motivated and are
working towards achieving of the organization goals and achievement. Unlike the traditional
pay where wage and increase in remuneration depend on position and seniority, contingent pay
salary and salary increase is based on job performance (Carson, 2012). The payment plan
should be developed in a way that the pay motivates the employee of an organization to work
towards achieving organization goals. On the same note, the payment system should reflect the
organization core values and should be in line with the organization culture. Contingent pay
schemes attempt to make a company more effective in attaining organization goals. The aim of
contingent pay plans is to help in improving organization performance.
The purpose of this case study is to develop a contingent pay (CP) plan for Dow
AgroScience based on the organization mission, vision and core values. Further, the paper
discusses the benefits of implementing a contingent pay plan. And discusses how multinational
corporations resolve issues relating to contingent pay and different cultures.
Dow AgroScience is a multinational corporation providing biotechnology products and
pest management. The organization focuses on delivering innovative technology that help
improve the quality of living for the world ever-growing population. Dow AgroScience is
committed to corporate sustainability and product stewardship (Corporate Values, n.d.). Dow
AgroScience mission statement is clear and understandable to the company’s employees,
customers, and other stakeholders. Dow AgroScience mission statement is brief and clearly
specifies the organization business of pest control and assisting in the production of food
supply amid using plants as a renewable agricultural resource to develop innovative products.
4
The company has a clear vision of being a premier company providing an agricultural
solution and specialty market needs. Dow AgroScience core values define the acceptable
behavior; it compels the employees of the organization by stating what the organization opts to
achieve and why it wants to achieve these objectives. The company’s core values inspire the
employees and involve them in the organization. Ideally, the company core values hold the
organization through shared values and standard behavior. It is good for the organization to
introduce contingent pay to achieve these goals and ensure that there is prosperity. This is
because contingent pay makes performance management more effective since rewards are tied
to outcome.
Before selecting a CP plan it is important to consider the culture of the company and
strategic direction of the organization (Armstrong & Taylor, 2014). Dow AgroScience culture
focuses in developing talents and leadership abilities of their employees. The company focuses
on achieving organization goals through motivation and employee development. It is
imperative to note that Dow AgroScience values diversity and work-life balance.
Therefore the best contingent Pay system that is likely to be successful for Dow
AgroScience is a plan that enhances strategic direction and employee development so as to
achieve the organization goals. The contingent pay that ideally fits Dow AgroScience is a skill-
based pay to enhance development. To improve customer service, Dow AgroScience
contingent pay should encompass a competency-based pay with gains sharing (Chen et al.,
2012). The company should give sales commissions the company employees working in the
sales department to add value to the company customers. The company can also enhance
teamwork by giving team sales commission, gain sharing and competency-based pay.
5
Contingent Pay plans that help to enhance strategic directions is likely to be successful
because it encourages positive behavior. Employees will also be motivated to develop new
behavior that may produce better results and enable the organization realize its goals
(HENEMAN, 2002). This can be achieved by defining and measuring performance before
allocate rewards. The company should give both financial and non-financial rewards.
Implementing contingent pay plan has quite a number of benefits. Performance
management becomes more effective when using contingent plan because rewards are tied to
outcome. Contingent pay enables an organization to clearly define effective performance and
determine factors that are indispensable to achieve performance (Warwas, 2015). Contingent
pay also enables managers, supervisors and employees understand what is required of them. On
the same note, Contingent Pay boosts employee motivation to work and achieve goals that are
in line with organization desires.
However, Contingent Pay may not be accepted in all cultures. Effective organization
put a lot of emphasis on job performance and consistency. In a multicultural organization,
cultural rules can drive behavior and expectations. In such organization, contingent pay may
not be effective in improving job performance if it is not aligned with cultural values of the
community (Cowling, 2013). An efficient organization culture should encourage employees to
share problem-solving ideas and knowledge. To achieve this, the contingent pay plan should be
developed to respect cultural values of the community and payments should be made in such a
way that makes the employees identify with the community.
Multinational corporations can help align contingent pay with the cultural values of the
community where the company operates to resolve cultural difference in its subsidiaries. This
6
can be achieved by developing clear and open communication challenge that makes employees
voice their opinions regarding the contingent pay plan. Multinational organization need to
identify and respect cultural norms. If the contingent pay plan is not in line with the cultural
rules, it may not effectively achieve the main goal of motivating employees to improve
performance (HORNE, 2013). Being in a position to share challenges that hinders optimal
performance and the consistency required to achieve performance can be prevented by
disregarding cultural norms. Therefore, Dow AgroScience should put into consideration
cultural norms of the communities they operate in and develop a contingent pay scheme that is
tailored to fit with cultural norms of the community.
In conclusion, developing a contingent pay scheme is paramount in motivating
employees towards achieving organization goals. The contingent pay plan should be consistent
with the organization values and goals. The contingent plan adopted should motivate
employees to optimize their work performance and work towards achievement of organization
goals.
7
References
Armstrong, M., & Taylor, S. (2014). Armstrong’s handbook of human resource management
practice. Kogan Page Publishers.
Carson, R. (2012). Contingent valuation: a comprehensive bibliography and history. Edward
Elgar Publishing.
Chen, C. X., Williamson, M. G., & Zhou, F. H. (2012). Reward system design and group
creativity: An experimental investigation. The Accounting Review,87(6), 1885-1911.
Cowling, A. (2013). Appraising and rewarding performance. Managing Human Resources,197.
Corporate Values. (n.d.).
