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General Electric Company Case Study

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The Decision
Companies are increasingly thinking about getting rid of annual pay raises. The positive side of this could redefine reward systems which motivates employees and attract high quality workers. Being that it could also have a negative side, it could prove to be a demoralizing switch that leaves many workers not able to provide for their cost of living. There is a decision to be made throughout companies which will have an effect not only on the company, but on the employees as well.
Problem
There are some leaders that feel like annual pay raises are so small that they may not motivate the workers to stay, or help the company reach their goal. Some leaders also feel that the amount given to a hardworking employee and a moderate working
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Leaders are using variable pay to motivate employees, by guaranteeing a raise, only to the employees that put in work. Having that being said, the employee that do not meet the company’s expectations will not receive a bonus. This could cause them to be stressed and worried throughout time periods wondering if their evaluation will meet requirements. This could cause instability to many employees.
A Company testing
To see how things will play out, General Electric Company is evaluating annual raises. The company will test various pay strategies. They are deciding whether to eliminate scheduled annual raises in favor of doling out pay increases and additional incentives at other times. After testing these strategies, the company will have a better view of which payout to take.
Negative of terminating annual
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As times are changing I would recommend that companies make changes as well, or at least give it a test trail. A decision like this one could really improve the quality of workers, which could affect the quantity of workers needed. This could improve the company’s productivity and save on the cost of paying more workers than needed as well. On the other hand, making this decision could also hurt the company and scare away employees. Giving more work to evaluate each employee individual can be time consuming and added pressure. For the employees, not knowing if their work is good enough for the company could put them at a scare. Having stability is a very important need in
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