Incentive in the consultancy business

Abstract

Background and research question: There are several manners to control employees and ensure that they perform in accordance to the company’s objectives. This is obtained by the use of management control systems. One of the controls measures available is reward systems. In knowledge-intensive companies, the employees constitute the primary asset for competition. This inspired the following question: How can a knowledge-intensive, consultancy company remunerate and evaluate the consultants’ performances and does it contribute to knowledge development and retaining high-performing employees? Purpose: This thesis will give an idea to how a reward system was designed and how this system affects the employees’ willingness to stay within the organisation. Furthermore, show how to perform evaluations and how to endorse knowledge development. Limitations: Concentrating the thesis on one company to keep data collecting feasible and study a company that the authors knew tried to keep their high performers on a long-term. Methodology: The thesis has used a qualitative approach to better understand and interpret the respondents’ answers. Three respondents gave their opinion on the case company’s remuneration programme in semi-structured interviews since the authors wanted to hear their own thoughts regarding the programme. Analysis and conclusion: Several types of rewards exist in the company, albeit only two main rewards are frequently used. The use of a clear career model, which informs the employees of possible paths to take and expectations to reach them, is very important as a motivating influence. Employees who have the necessary qualifications and perform well are paid and promoted quickly if their evaluations express potential. However, these evaluations take much time and effort to complete and the outcome is subjective. Suggestion for further studies: There are several approaches possible towards reward systems. Since this study displayed the rewarding influence of a career model on employees, a future study regarding the behavioural effects of a career model on employees would be highly interesting. Interesting to see would be if the use of an “Up or Out” policy attract certain types of people. Since this was a case study of one company, it would be interesting to study if other companies within the business handle this issue of rewards in another way.