Cypress Semiconductor

Cypress Semiconductor

1. Cypress Semiconductor strategy is to give employees an entrepreneurial mindset and run the company with such incentives. To make this happen subsidiaries were created, each with its own shares with its value contingent on meeting long-term performance targets. As far as the organizational structure, corporate headquarters is less a direct management function and more of a board of directors.  Each subsidiary has its own president and board of direction that can create their own culture and set their own goals. The only things all these subsidiaries have in common are their core management systems that Cypress developed. The philosophy behind this approach is to create an energy level, sense of mission and determination that usually cannot be achieved in a large company.

1. Cypress Semiconductors’ performance management and compensation systems greatly support the critical tendencies.  It all begins with Cypress incentives to hire the best talent and give all managers hiring responsibility to obtain the best possible talent. As the article states even though money cannot inspire or sustain great importance it does matter. The system of “focal reviews” that Cypress uses encourages managers and employees to work hard and contribute while keeping a balance of power. The compensation system Cypress issues raises and rewards people for their efforts. Merit and equity help obtain low turnover rates and stock options are given based on future potential. Top ranked performers in any group of peers are paid 50% more than the lowest ranked which encourages high contribution, effort, and strong incentives for performance.  

1. The role of the “killer” software is to shut down a group computers if slippage of a particular group reaches unacceptable levels. I believe that killer software is positive overall. It may help managers think about priories, market trade-offs, and create realistic agreements about what needs to be done. People set their own goals, review them with their managers, and commit to achieve them by a specific date. Initially I believed that the type of pressure the ‘killer” software puts management could lead to incentives to manipulate information to try to finish reviews on time or overlook a report that may require more detailed and crucial analysis than was initially planned. But the fact that delinquency rates are more often a signal of the need for help and additional resources than for control and punishment covers most of this dilemma since the situation will be analyzed and resources would be provided as needed. Overall the software seems to encourage people to challenge themselves and illustrates the importance of efficiency and time management in the highly competitive and innovative technology sector.