Person Focused Pay System

The text lists three disadvantages of a person-focused pay system. Rising costs related to labor expenses, training expenses, and overhead expenses is one disadvantage of a person-focused pay system (Martocchio, 2013, p. 112). Zaim (2007) states that a component of the rising labor expenses is the cost to identify the skills in demand and evaluate the employees’ competency levels (p. 123). Jing Feng and Shu Hwa (2004) agree with this idea, adding that an employee’s failure to increase his or her contribution to the organization after receiving training creates serious difficulties for the organization (p. 402). The organization is expected to foot the cost of the employee’s wages and benefits, the costs of the training, and the increase in the employee’s wages when training is completed. These costs can be substantial, especially when the organization has a lot of employees. In the case of Mitron Computers, a person-focused pay system would be a disadvantage because the organization would have to pay for the wages and trainings upfront before the benefits of the

112). Martocchio (2013) explains that employees who receive incentives based on production quotas will not likely take the time to receive training since it would cut into time they could be using to work toward the production quota, thereby negatively impacting the incentives they receive (p. 112). At Mitron Computers, implementing a person-focused pay system while another incentive plan was in place would mean that employees would likely continue to assemble computers to reach their production goals rather than take the time off to obtain additional training, as it would be at the peril of their production incentives. Training costs a lot of money anyway, but it is a waste if no one takes advantage of