The Effect of Remuneration on Productivity Case Study at PT. PAL INDONESIA - Gresik Abstract Low Productivity is the main cause of a company losing their income and position in the market. As a government-owned business, PT. PAL Gresik is also risked their income by having a low productivity. This research’s main goal is to understand what drive the people that is working in the government sector. The main variable used here is the remuneration effect toward productivity. Many suggested that the problem of government owned business is the lack of incentive and the ability of its people to go into higher level in the company. In this research, not all of the company will be examined however only the loading section of the company which is …show more content…
surpassing some sales targets. When the employee surpasses their target, he or she can be given an additional amount to their salary; this will make them strive to achieve more (Maund, 2001). Research has proven that when human being are appreciated and praised they tend to improve their performance. This is another way an organization can apply as a reward so as to improve performance. Praise could be shown in the organization newsletter or in meetings. When managers take time to meet and recognize employees who have performed well, it plays a big role in enhancing employees’ performance (Torrington & Hall, 2006). Organizations should reward employees more often. This greatly improves performance compared to having the rewards maybe only once a year. This is because frequent rewards are easily linked to the performance. (Thomson & Rampton, 2003).Measuring performance is of great importance to an incentive plan because it communicates the importance of established organizational goals. “What gets measured and rewarded gets attention” (Bohlander et al, 2001).In discipline of human resource management, different writers suggest the following indicators for measuring employee performance and they include: quality that can be measured by percentage of work output that must be redone or is rejected; Customer satisfaction that can be measured by the number of royal customers and customer feedback. Also, timeliness, measured in terms of how fast work is performed by the employee when given a certain task; absenteeism/tardiness observed when employees absent themselves from work; and achievement of objectives measured when an employee has surpassed his/her set targets, he/she is then considered to have performed well to achieve objectives (Hakala, 2008; Armstrong,
Every human being needs motivation now and then. Incentives and recognition programs can support you in helping your employees become happier and more productive at work. As a leader, one of the main things to think about is how to recognize an employee for a performance that has exceeded expectations, objectives and goals. Therefore, I would like to introduce you in this paper to some ideas that hopefully would promote this method as one of the main priorities in today's and tomorrow's workplace.
While businesses are looking to get more from their employees, employees are also looking to get more from them. Through employee reward and recognition programs, employers can motivate employees to change work habits and key behaviors to increase the business’ profit. Employee reward system refers to programs set up by companies to reward performance and motivate employees on group or individual levels. They tend to be separate from employee salary but are some form of monetary rewards. Previously reward systems were considered the domain of large companies and businesses, but now even small businesses are offering them to lure top employees in a competitive job market or to simply increase employee job performance.
Performance related pay is a financial reward given to employees whose work is considered to have reached a required standard or is above average. “PRP criteria can relate to the individual employee, to work groups or to the organization as a whole” (Armstrong, 2002). It is fair to provide people with financial rewards as a means of paying them according to their contribution (Armstrong 1993:86). The primary purpose of performance related pay in any organization is to recruit, retain and motivate the workforce. It also helps in focusing employees’ minds on particular goals (Protsik, 1966); communicate to employees an organization’s core values, and change the culture of that organization (Kessler and Purcell, 1991).
An incentive or reward system refers to a program designed by an organisation to reward high performance and motivate workers on an individual and group basis (Corby et al. 2009, p. 2). Rewards are useful to a company operating in a competitive market. Although used interchangeably, rewards and recognition where the former can be monetary or non-monetary but has a cost to the company, while the latter is meant to offer psychological reward, for instance, oral public recognition or end of the year award. While the company does not provide financial incentive, it provides non-financial in the form of cars for its Sales Division consultants. This improves the working condition of the employees, but it does not improve their financial stance. Wright (2004) notes that some employees are more concerned with status, for instance, an executive desk, attractive office or business card (p. 76). Such incentive make the jobs and company attractive.
An employee’s productivity and motivation derives from many different aspects. Some individuals have a higher productivity in the work place simply because they are motivated by the place itself, probably they feel comfortable in the place of work or they are treated with the upmost respect and love their jobs. Others in the other hand are more influenced by the liquid compensation, these will perform a better role and become more productive when there is more money involved. In this research paper we will learn whether employees are motivated by appraisals or by money, I will research if an employee works harder when there is a bonus or a raise at hand, or if the dedication and the hard work that they bring into the company is because they love what they do and they just need to be recognized, perhaps they just need the push and the motivation from their employers to become more
Incentive reward engagement offers a win-win situation for the employees and the company. Kelleher believes that incentive is a form of recognition and builds engagement through company’s and employee’s obligations towards a common goal (2014). The company has a “Growth Incentive Scheme” for the production workers. Special monetary incentives are provided should the workers achieve the monthly output target. Through the rewards, employees feel motivated towards their work and thus, contribute towards the company’s
The first action is to create a Reward/Recognition Program. This is necessary to get the employees engaged, who can transform a company. They can take customer loyalty to new levels, reduce hiring costs, and improve productivity and product quality. Second, the Employee Training and Development Program is vital to the long-term success of the organization. When carefully planned and properly implemented, the program can provide benefits to both the employees and the organization. Good training and development programs help keep the right people and grow profit. Lastly, Goal Setting & Rewards can entice employees to go beyond their expectations. Difficult goals can lead to higher levels of productivity versus no goals or easy goals. Of course, rewards can also promote productivity, but it has to be appealing. For instance, employee who can produce 50,000 widgets a month will get a paid day off. The reward acts as a motivation
There are many ways to recognize employee work based on performance. For example, company can award to those employees who meet higher expectation with free travel or incentives. Company also can organize an annual dinner for every employees to appreciate their works. Bonus and annual leave also can be award to those employee which had work longer time for the company. This is because staff recognition is a highly effective and proven strategy for improving employing engagement. A well-implemented employee appreciation program has the power to influence many aspect of business form morale, to productivity, and even retention. Furthermore, if the company keep the staff happy then the customer will be happy; if the customer happy then shareholder will be happy. The employee will having a good loyalty to the company
It is important for any company’s management to be concerned with the performance of its employees. The employees past performance also determines future performance thus the need for continuous enhancement of the employees performance. This means that, employers have the role of ensuring that they improve the performance of their employees, and this is greatly impacted on the compensation system that the company uses on all its employees. According to Sturman (2006), money is the overall incentive value that most of the employers give to their employees, but it is also important to note that the employees can improve in their performance if the management motivates them by linking pay to performance. This mean...
...n organisations of lack of job satisfaction and productivity amongst unmotivated employees, and related the problem to the risk of turnover. Conflict, absenteeism and stress were identified as major causes of loss of job satisfaction and productivity, potentially increasing the the loss of staff. The solution proposed was to implement additional training and performance pay. It was argued that training in the workplace improves an employee’s sense of worth and self-esteem, by increasing their skills and thus contribution to work efforts. This raises productivity, and in addition improves job satisfaction. Performance pay was advocated as a means of developing the organisation to support motivated and capable employees. Self-disciplined workers would receive recognition for output, improving job satisfaction; as well as financial incentive, keeping productivity high.
Hence, there is no specific method of evaluating Job Satisfaction. But there are ranges of means that can be recognized from the present writing. A survey instrument can be utilized to evaluate Job Satisfaction. In the survey method, it is calculated the Satisfaction with the diverse elements or components of the Job and summation of every Satisfactions points will be in use as the general Job Satisfaction JS＝F(satisfaction with diverse components of Job).Nearly any work associated feature can affect an individual rank of Job Satisfaction or Dissatisfaction. There are a numerous features that affect Job Satisfaction. The main factors can be reviewed by revising the elements of Job Satisfaction which are Pay, the Work Itself, Promotions, Supervision, Workgroup, and Working Conditions (Luthans 1985).Moreover, Job Satisfaction has major administrative allegations. If the Job Satisfaction is increase, the workers will carry out well. Whereas if the Job Satisfaction is decrease, there will be Performance crisis. In exploring it results of Job Satisfaction, it is significant to break the examination into a sequence of precise division of factors. They are Productivity, Turnover, absenteeism and other outcomes (calamities, criticism, bodily and psychological wellbeing).The basic goal of incentive plans is to draw capable citizens to work in the Organization to maintain
Employee performance defines the individual performance and behavior. It is essential to understand that performance is not merely a tasks and work need to be done to receive bonus or pay increase. Main objective is to enhance the skills set of an individual while helping the business performance (Baker, 1999).
The typical form of remuneration is a base pay for standard hours worked. Base pay is the rate for the job and is is, in most cases, the largest part of employees’ reward (Armstrong, 2016). Employers usually pay extra for working longer hours (overtime rates), unusual hours (for example, weekends and night shifts), and for working in particularly difficult conditions (for instance, there can be some supplements for noise, handling heavy loads, risks). These additional payments usually result from the obligations of collective agreements or laws. The impact of those two elements is therefore particularly important and this deserves to be addressed.
Performance management is used for the basis of promotion, reduction in force purposes (talent management), gives transparency of what an organization is looking for, merit increases, and lastly it provides protection against lawsuits for unlawful termination by keeping written documentation. Performance evaluations are advantageous to both the organization and the employee. A leading advantage of performance evaluations is it gives the employee an opportunity to create and achieve smart goals. Although performance evaluations primary function is to measure whether an employee is a good fit or a bad fit for the organization, its function is so much a broader. Performance management is tool purposely used to motivate employees to examine themselves and determine if they have selected the profession that is best for them; consequently the feedback an employee receives from their superior supports them with increase their knowledge and
Organization is a group of people brought to gather to achieve specific goals. Goals can be achieved if team member are performing well. Performance is the results of activities given to the employees in an organization to be achieved within specific period of time. Evaluating the current performance of employees against past performances and organizational standards is known as Performance Appraisal (Dessler, 2005). Furthermore performance appraisal helps the company know how individual employees are performing and how to improve their performance thus improving the performance of the company (Grubb, 2007). A performance appraisal is propose in which the performance management system in an organizations set work goals, determine performance standards, provide performance feedback, determine training and development needs and distribute rewards as well as evaluating an employee’s job performance during a period of time. The performance of team member is much more than appraising individuals’ works, it is managing the business, so the performance of an employee is influences by the performance of an organization. It is target to achieve the best results for the planned strategic by managing activities of employees. There are many different opinions on the performance appraisals, some organizations do performance appraisals without any aim just follow others., where some organizations do performance appraisals to make sure they have a record of a piece of paper in the employee’s file – they are careless about do corrective action. But successful organizations understand the importance of combining performance appraisals into their performance management process and strategy plan as the success of any organizatio...