Performance and Career Management
Describe a new compensation plan for your employment team
The new compensation plan for the employment team will be in accordance to pay for knowledge compensation plans thus, unlike traditional compensation systems which base employees’ wages on the specific jobs they actually do, pay for knowledge plans base wages on the repertoire of jobs that the employee is trained to do. Under such plans, typical employee starts at a base rate, and as he or she learns different jobs in the organization, as pay rate increases simultaneously. There might argue that it does not matter whether the maximum pay rate can be attained in 50 weeks or in 100 weeks, what matters is that employees can increase their pay rates, that they can attain higher pay levels than possible in compensation system and maximum rate is within reach, it may not matter that pay for knowledge compensation plan has twist that show up, what is important is how these curves are handled whether management retains its commitment to pay for knowledge plan in the face of difficulties, whether employees are involved in making modifications, whether employees get blamed and so forth. For one, focus should be on systemic issues to use of pay for knowledge compensation plan, Chrysler-UAW pay for knowledge compensation plan undoubtedly involved hours of meticulous planning, as United Auto Workers and management at Chrysler hammered out specific details of the plan.
Explain why your pay system will work
The plan will work because of systematic and simple level processing as there will be easy execution towards pay for knowledge system in the team and typical structure of systems will adhere to the following: (1987)
Level 1 is the level at which the employee is hired
Level 2 is the next level that an employee progresses to once he or she has learned to complete one job in a work team in a satisfactory manner. The person progresses to
Level 3 when that person has learned to perform a sufficient number of jobs in that work team to be considered a flexible team member so that the person can move around and share work with other people, replace other people when they are absent, and so forth
Level 4 is when the person has learned to perform all of the jobs in a team in a satisfactory manner. The person then reaches
Level 5 by transferring to another team and achieving the requirements of level three on that new team. The person then progresses to
Level 6 when they have learned all the jobs on the second team. The last level, which is
Level 7 is a team coordinator or team leader type level, only one employee on the team can be designated as a team coordinator and the team is usually the one that designates which team member can function as a team leader.
Describe three components of a total rewards package that would motivate employees to reach peak performance
Implicit Incentive Pay – reward is not directly linked to individual/group performance by any specified formula. Instead supervisors are requested to determine rewards using a number of subjective or poorly defined criteria. Performance will have to be subjectively evaluated along numerous dimensions after fact. Explicit Incentive Pay – links rewards employees receive directly to measures of individual performance or productivity by predetermined formula, examples include piece rates for production workers, commissions for sales personnel, commissions given to real estate agents, attraction of incentives is its objectivity and simplicity.
Incentives for Individual Performance – links pay to measures of individual performance as examples include commission for sales personnel and real estate agent, and stock options for executives. (1992), noted critically vital to the success of this form of incentives are: capability of the concerned employee to perform the desired behavior and perception that the reward is valued and dependent on performance
Group Incentives – link rewards to the performance of the group as a whole and the total reward is divided among individuals constituting the group according to yardsticks absolutely unconnected to individual performance. Examples include profit sharing plan and gain sharing plans. (1996) have noted that this type of incentives is usually preferred where direct monitoring is not readily achievable, exact measurement of individual work performance is difficult and teamwork and cooperation are essential to success.
Describe your compensation plans benefits to the individual as well as to the company.
Pay for knowledge compensation plans offer many advantages to company and employees such as the experience greater work force flexibility, leaner staffing, greater work force stability, higher quality of output, lower absenteeism, less turnover, and higher productivity. Likewise, employees in pay for knowledge systems may benefit from higher motivation, higher job satisfaction, higher payment satisfaction, increased feelings of self-worth, more opportunities for growth and development, increased job security, improvements in the quality of work life and higher company commitment. The specific mechanics of the plan make difference in the plan’s overall effectiveness, typical compensation plan had about 10 skill units, although the actual numbers ranged from 4 to 100. The maximum number of skills an employee was allowed to learn was about 15, and the minimum number required was about three. Employees generally learned about four skills or jobs.
Companies normally spend a lot of time working out the mechanical details of pay for knowledge payment schemes, how these details are handled affects the success of the plan. The data, however, did not confirm this. The only factor that had significant correlation with the various outcome measures was the number of skill units in the plan. It may be that after seven units, pay for knowledge compensation plan starts becoming unmanageable, or that employees cannot understand the payment system. Clearly, it would benefit those involved in administering or designing the plan to know on what details they should focus. Unfortunately, the data do not leave the researchers in this position, but rather, in the position to say that it does not matter how pay for knowledge compensation plans are operated, the plan is embedded in a network of innovations, the analysis also involved looking other innovations that accompanied the plan, team approach to management, autonomous work groups, employee participation in major personnel decisions and alternative work schedules. The future of pay for knowledge compensation plan appear positive, users are reasonably happy with their plan and, given the right circumstances, would use the plan again. Companies considering such pay for knowledge compensation plan would be well-advised to look at their managerial philosophies, their commitment to pay for knowledge, their attitudes toward employees, as much depth as they do the kinds of plans typify pay for knowledge.
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