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Performance related pay
Performance related pay
Performance related pay
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Provided that Susan’s organization is new and she has clearly indicated “that cost control will be essential to keep the business going long enough to become well known and develop a stable clientele” (Long, 2014, p. 500), assuming this statement is true, I argue that base pay should be an important component of compensation for the sales staff in conjunction with performance pay. As noted by Long, performance pay is most common amongst sales related jobs such as realtors, cars salesmen and those who sell other merchandise, including gym equipment, as is the case at Fit Stop. So why would I not recommend performance pay as the most suitable means of compensation for Susan’s organization? In conjunction with the fact that cost control is …show more content…
Why should the physiotherapist or kinesiologist get a cut of “my” hard earned sales? Why should someone who makes half the effort get rewarded for something I worked harder to achieve etc. The answer is simple. As stated in the case, the majority of the sales staff at Fit Stop will consist primarily of people with merely a high school diploma or perhaps a diploma of some sort not related to the industry. Therefore Susan has implemented a strategy that requires the physiotherapist and kinesiologist at each location to train other employees in how each type of equipment can be used for various conditioning and rehabilitation purposes. As time goes on, each sales person will be expected to learn in depth about all the different pieces of equipment in order to help customers diagnose their needs accurately, and to be able to explain proper use of the equipment (Long, 2014, p. 500), all of which will be knowledge attained from the physiotherapist and kinesiologist. Therefore, the success of the sales staff is almost completely dependant on the knowledge and education provided to them by the those with either a degree in kinesiology, physiotherapy or a combination of both, and thus, the monetary benefits gained from a sale or client should be allocated equally amongst the entire team as each persons success is …show more content…
This is ware it is paramount for management to develop viable means of measurement to monitor and track an employees contributions in efforts recognize if they are eligible to receive part of the group performance-based pay. Notably in the Fit Stop case it states, all members of the organization will be full time staff. This is a challenge in that it is much more difficult to fire or penalize someone who is not performing at par or meeting the expectation outlined by the organization. Full time staff is legally entitled to certain rights and are protected by the labor board. Further the employer must legally prove their efforts to accommodate and aid an employee that may be suffering from any form of addiction or illness that may be impeding their ability to perform at work, prior to letting them go. Only at this time, if the organization can prove beyond reasonable doubt that the employee’s lack of effort is not related to any form of mental or physical illness, should they be removed from or not included in the group-based performance pay. In order to protect the employer, the following standards of what is considered
When new competitors enter the market, they will have high costs of production due to the lack of economies of scale.... ... middle of paper ... ... The employees’ earnings and promotions were determined in direct proportion to their individual compensation towards the company’s success.
Many of Harrah’s employees deemed the goals set by Winn’s current incentive program to be unrealistic; on the other hand, others felt a sense of entitlement for bonuses. Therefore, Winn’s job is to provide a recommendation to Gary Loveman, on how to motivate and get employees energized. In order to motivate the employees, Winn had implemented an incentive pay plan to rewards Harrah’s employees in all of its properties for improving customer service. The company’s purpose for incentive program was to implant a competitive mindset in its employees as well as to show the employees that they are core of the...
In April 2010, KK BB, the CEO of Marshall & Gordon, a leading public relations firm met with the firm’s leadership committee off-site in Miami. This off-site brought together Marshall & Gordon’s executive committee, practice and regional heads, and senior HR officers to discuss on redesigning the firm’s compensation system. A global advisory taskforce, under the direction of an external consulting firm, had spent three months collecting and analyzing data. Marshall & Gordon hired external specialists to design the new performance management program. The specialists proposed that the senior managers and human resource form a global advisory unit together with Marshall & Gordon partner to represent the firm’s five regions of the firm and lead the design process. The advisory unit surveyed all consultants in February in order to understand their way of thinking about the fairness, worth, and effect of the current performance management system. Majority of the interviewees responded to the corporate surveys implying that the subject was topic was especially exciting to them. Interviews gave insights on present and prospective business plans and direction. The survey also showed that specific focus across certain employee populations should be given. Six current hires from key competitors were also interviewed to comprehend competitor pay practices and compensation program structures. Further focus groups discussions and key information interviews enabled the taskforce’s to understand the needs of certain groups within Marshall & Gordon’s worker population. The survey culminated with the taskforce conducting interviews of 20 partners and principals togeth...
The newly appointed district sales manager, Larry Barr, faces the problem of allocating sales quotas among his various sales representatives. This decision will affect everyone's earnings including his own. This problem is compounded by the fact that different territories have, for a variety of reasons, different potentials. In addition, the territory that is known to be the toughest will soon require a new sales rep.
Performance-related pay Performance related pay is when a business increases the pay given to workers by the amount of effort put in, for example if an individual or a groupof orkers meet all their targets and improve the quality of
The need for intrinsic rewards at the Fit Stop is moderate. It is a justifiable reward for some, but in most cases, is not the sole purpose that people are employed with The Fit Stop. The need for extrinsic rewards is much higher than the need for intrinsic rewards due to all of The Fit Stop’s employees being full-time. Compensation will play a role in The Fit Stop because of its long hours, need for some skilled workers, and because all of the employees are
We cannot afford financially or strategically to pay “whatever it takes” to retain or attract a client. Rather, we must devise a compensation system that will encourage our employees to focus on efforts that will increase our profitability by ensuring that our system supports our business objectives. Therefore, we have devised a pay system which is fair, encourages innovation, and takes extra special care of our top talent pool, the Marketing and R&D
Organization performance pay, based on the profitability of the firm: example value added schemes, profit sharing schemes and employee shareholding.
Chapter 42 “Democracy and the Public Service: The Collective Services” by Frederick C. Mosher discusses unions as they were discouraged by conservative members of state legislatures, city councils, boards of education and county boards but they developed in parts of the federal establishment, and had a growing influence on federal employment policies (431). Federal unions have decreased in numbers of efforts to damaging the civil service as there aims was fundamentally the same as civil service, unions have civil service the common enemy of partisan patronage (431). The federal government avoids “collective bargaining” and “unions” but instead use “employee management cooperation” and “employee organizations” as general legitimacy of the unionization of public employees (433). Labor organization and collective bargaining are frowned upon in government for most of U.S. history and are still forbidden in some
Pay per performance rewards are not for the benefit of employees not even for the companies. This is a tool to lure and attract the top talent in the market and to exploit it. Pay per performance is a kind of sophisticated bribery system in Senior Vice President and Senior Scholar Lewis C. Solmon and Milken J. Podgursky Professor of Economics and Chair do department of economics in University of Missouri-Columbia, did a research and found the following results:
Mujtaba, B. G., & Shuaib, S. (2010). An Equitable Total Rewards Approach to Pay for Performance Management. Journal of Management Policy & Practice, 11(4), 111-121. Retrieved from EBSCOhost.
The reauthorization of the Elementary and Secondary Education Act known as No Child Left Behind (NCLB, 2011) has made increasing student achievement and reducing inconsistencies in the dissemination of teacher qualifications a national priority (Guarino, Brown, & Wyse, 2011). Classic fixed salary schedules that consider only a teacher’s education and years of experience have been popular since the 1920’s (Koppich, 2005). This traditional system was developed to counter gender and racial discrimination that was allowed at the time by more unrestricted systems (Dee & Keys, 2004). Claims were made that the prevailing system created salary equity between elementary teachers, most of whom were women, and secondary teachers, most of whom were men (Koppich, 2005). Even though this compensation structure has failed to acknowledge that some teaching jobs are harder than others and require more skills, the straightforward standard salary schedule has prevailed in thousands of schools and districts across the country (Koppich, 2005). There was a burst of merit pay activity in the early 1980s. Twenty-nine states had initiated some sort of merit pay program for teachers by 1986. Since then, however, almost all of them have been diluted or discontinued (Dee & Keys, 2004). While the idea of merit pay for classroom teachers has been around for several decades, lately a resurgence of interest has surfaced in a growing number of districts around the country. This may be attributed to a perceived correlation between student achievement and teacher merit pay, and the recent increased funding level for the federal Teacher Incentive Fund (TIF). The TIF program, which is run through the United States Department of Education (USDOE), pr...
2). Looking at performance-related pay in the framework of reinforcement theory believe this system of payment and compensation “suggest that pay can be used to create consequences for desired behaviors such as high performance that will in turn reinforce the behaviors” (p. 2).
Every organization faces a shortage of resources including skilled human resources. This necessitates the emphasis on performance so that organizations can hire as few employees as possible while raising performance to the highest possible levels. Contemporary managers have the task to raise employee motivation so as to raise employee performance. This means that managers have to provide timely performance feedback so as to give direction to employees. Performance feedback is not a one-off issue but is a critical constituent in the continuous enhancement of contemporary workforce improvement (Anseel, Lievens, & Schollaert, 2009, p. 24). Performance feedback equips employees with the knowledge to modify their behavior so as to improve their individual and consequently group performance. At the absence of performance feedback employees are left in guesswork as they contemplate which areas to focus more efforts so as to develop professionally.
The total pay package has a direct impact on the successful recruitment, selection and the retention of staff within any organization. This pay package is critical for any business to remain competitive in today’s business world. Competitive compensation packages are vital to both large and small organizations as they encourage the retention of talented staff.