CASE STUDY
Industrial/Distribution Company Compensation Design and Organizational Effectiveness
Established a pay-for-performance philosophy and implemented two new STI (Short Term Incentive) programs to ensure cultural and organizational alignment.
Our client is a >$1b portfolio (Industrial/Distribution) company of a large private equity firm. Their financial performance has been flat for several years, employee turnover has increased, employee engagement has decreased, and the company culture has been under attack.
The Challenge
Our client’s growth was hampered by spiraling manufacturing costs driven by an increase in turnover and a reduction in quality. In turn, distribution was losing trust in the manufacturing capability, customer satisfaction was decreasing, and new sales were difficult. Front-line manufacturing employees did not understand what was being asked of them and whether they were “winning” or not.
How Montis HR Helped
Our initial impressions were two-fold:
the organization did not have a clear compensation philosophy and
compensation programs were not market competitive.
Working with the executive leadership, finance, and HR teams, Montis HR created a compensation philosophy and designed a new short-term incentive plan to clarify goals and drive pay-for-performance. With a focus on value creation, the new STI plan was funded through manufacturing conversion cost improvement in the plants, but paid on the basis of employee performance against critical objectives (safety, OTIF, quality).
We successfully piloted in two manufacturing locations and the operational performance improved meaningfully. As a result, the client is now rolling out the new STI program across all US manufacturing locations in 2026 and are now focused on improved pay-for-performance in distribution locations.