Business Case Studies & Business Publications

Mountain Lumber Company

Lynch, Luann J.

Case

Mountain Lumber Company

Lynch, Luann J.

C-2147 | Published January 28, 1999 | 19 pages Case

Collection: Darden School of Business

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In 1998, Mountain Lumber Company implemented a performance measurement and incentive plan for all company employees. Details of the plan by department for both managers and non-manager employees are presented, and students are asked to review and evaluate the plan in light of the company's strategy. The case exposes students to evaluating key success factors and developing performance measures for successfully implementing organizational strategy, linking performance measures to monetary incentives, identifying possible unintended consequences of performance-measurement systems, and developing compensating control mechanisms to discourage those behaviors.

This case gives students exposure to: 1. Evaluating key success factors for successfully implementing organizational strategy 2. Developing performance measures to encourage behavior in line with organizational strategy 3. Thinking through some basic issues associated with linking performance measures to monetary incentives 4. Identifying possible unintended consequences of performance measurement systems and developing compensating control mechanisms to discourage those behaviors 5. Conducting a comprehensive review of a performance measurement and incentive plan