Information
services group Reuters is making hundreds of managers directly responsible for
the profit or loss of their products.
The
company is rolling out a management tool called ‘Profitability Insight’ to
monitor operating efficiency across the organisation.
Under
the scheme, to be introduced initially in areas such as sales and marketing, Reuters managers will be set profit
targets that will be built into their bonus schemes – augmenting existing
incentives built around sales performance.
David
Grigson, finance director,
told the Financial Times: "In Reuters, it is a new discipline. In the
past, the overall level of complexity in the organisation thwarted this, but
now we can take this forward as part of the re-organisation and simplification
of the company."
The
initiative will help Reuters to break down the profit of different divisions
for the first time. The company only reports segmental sales.
Grigson said the launch of the
profitability insight scheme followed a year of tests involving 300 managers.
For
an interview with Mark Sandham,
global head of HR operations at Reuters, see tomorrow’s issue of Personnel Today
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