The foundation for effective job performance and compensation system can be traced to effective job analysis process. Fundamentally, a job analysis should consist of a thorough examination of the job 's duties and knowledge, skills, abilities, and qualities that are required in order to be successful in a specific position, upon which appropriate rewards or compensation can be determined. For many perspectives, jobs are usually made up of requirements and rewards, where rewards may be regarded as a major recruitment strategy for motivating potential employees in order to influence them to stay the organization for a longer period as well as enhance their performance. The most common or basic form of rewards which attracts employees is extrinsic …show more content…
According to Chaneta (2014), job evaluation is the process of analyzing and assessing the relative worth of various jobs in an organization for the purpose of comparison and pay grading, and based on qualifications and skills required for a range of jobs. In other words, it forms the basis for pay and benefits negotiation. It helps to compensate employees accurately based on their job grades or values, and hence avoid issues of inequity and indifference at the workplace. To ensure effective job evaluation process, market-driven and job worth systems are largely used. While market-driven system is determined by the existing pay grade or structure in the opened market based on workforce demand and availability for particular positions, job-worth system depends on the value of the job or position to the organization. Both systems can be influenced by the external labor market and there become difficult for managers to apply as they would be torn between fulfilling internal and external demands. Another significant resemblance between market-driven and job worth systems is that they both require the same qualifications and other characteristics from the job performer as the basis for occupying a specific position. For instance, before HR practitioners decide on which system to use to determine Quality Specialist 's pay, they must make sure the potential worker has the job requirements and competencies to execute the job. One of the criteria for rewarding an employee is his or her ability to complete tasks in a proficient, productive, and effective way (Kaifi, Khanfar, Nafei, & Kaifi,
Intrinsic rewards are not patterned financial rewards are associated with the requirement for employees to achieve greater success , recognition, a sense of responsibility , influence and development of other individuals. The requirements of the above is a strong motivator and contrast to the one . Each employee has different needs and desires . Rate a tremendous appreciation and gratitude is enough to inspire us all because of the appreciation of the value of giving someone touches his soul and give vigor to keep trying. Appreciate or appreciated regardless of age or where only a thousand meanings. Skinner ( 1969 ) reveals that the reward is a reinforcer . Reinforcing Here the meaning is interrelated aspects to the values that influence an individual's needs . However , Wether states that reward is what an individual received in return for a given job . It is the responsibility of an organization or institution to provide compensation and benefits to employees or students commensurate with a workforce that has been poured . The importance of rewards and benefits are indeed undeniable. If the employee or student is not satisfied with the compensation and benefits provided , then this will result in the existence of such problems as absenteeism , job rotation rate employing high , declining productivity and not serious in doing work .
The purpose of this paper is to explore the use of Merit Pay and Incentives
Performance appraisal system serves as a tool to assess employees’ performance and helps to plan and measure the organization’s goals accomplishment. Luthy (1998) suggested that “individual contributions must be based on clear direction, personal planning, individual and team assignments, and well-articulated knowledge, skills, and personal attributes”, to give employees expectations to meet and information that establish the organization performance standard.
The company Steel Co, which has been established for around 30 years, has been in a steady decline during the current recession and although a Divisional Director has been employed by the owner the fortunes of the company have not improved. The staff is unhappy, unproductive and unimpressed by the Human Resource system that currently exists in the company. The pay structure that currently exists within the organisation has been much debated among employees who feel it is unsatisfactory. The Business Adviser will research Performance and Reward management tools in order to help the company develop a more suitable Performance and Reward system to use. A variety of sources will be used in order to evaluate the system and tools against other organisational frameworks. The pay structure within the company will also be looked at in order to identify any possible changes that could be made.
Once the system has been put into place, it is rather easy to use. The main advantage of the point system is that it is a more precise way to evaluate a job. It is a more comprehensive job evaluation system in that it includes the talents, energies, duties and working environments from one job to the next. Financial responsibility, leadership, collaboration and other key indicators are included as well. The fourth type of system is the Work Evaluation system and this system measures a job’s value through its importance to the business and the goals set forth. By using this type of system, an energetic business can truly see how a job contributes and relevance in attaining the company goals or objectives. The disadvantage to this type of evaluation is that certain jobs that are important and needed are overlooked due to the main focus on its worth to helping the company achieve its
Bratton and Gold (2003) describe a reward system as “The combination of extrinsic and intrinsic rewards delivered by the employer. It also consists of the incorporated policies, processes, performs and administrative processes for executing the system within the framework of the human resources (HR) strategy and the total organizational system”.
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.
The job description is needed, because it explains how and why a position is performed. It involves the task and or requirements of the current position. The job description usually has a job title, explanation of the tasks, and machinery involved, and in some instances reveals information about the working conditions, as well physical environment, social environment, and conditions of employment. The job evaluations are needed and works sort of like inventory. An evaluation process is based on job analysis that reveals the worth or value of a particular position. The job evaluation for some organizations determines salaries for the created positions, which plays a pivotal role in most companies. The job specifications are a detailed description of job duties and task. A complete description of a job, gives candidates an opportunity to understand what it entitles to be successful with that company. Job analysis refers (Haque Talukder, 2014) to a process of analyzing, collecting, and explaining the contents of the job in order to provide the criteria for a job description and data for recruitment, training, job evaluation, and performance
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...
Management spends a huge amount of time to design incentive systems and schemes to motivate their workers and to ensure they work in their best possible manner. Motivating workers by giving them decent pay helps in winning employees heart to make the work done efficiently, significantly and effectively. The most effective way to motivate people to work productively is through individual incentive compensation (Pfeffer, 1998). An attraction of getting more is a powerful incentive to people for high performance. While most people agree that money plays a major role in motivating people, in organizations there is a widespread belief that money may also have some undesirable effects on morale.
Employee compensation and reward systems have undergone a couple of paradigm shifts since inception. Reward systems were traditionally compensation based and focused on the individual or the position (Beam 1995). After a recession in the early 1980's, employers turned to performance based models in an attempt to save money while still rewarding top performers (Applebaum & Shapiro, 1992). Today, the most successful organizations are using a total reward model, a hybrid of the performance based model combined with strategic human resource management planning to create reward systems that both benefit the employee and help organizations realize their operational goals (Chen & Hsieh, 2006).
There is considerable debate over merit pay and the effect it has on employees within an organization. Psychologists believe merit pay is related to the incentive theory of psychology; people respond to rewards and with the proper motivation, it increases performance (Cherry). Employers consider merit pay an effective tool and a form of competition strategy for motivating employees to achieve positive performance outcomes. Many employers ignore the fact that incentive plans may motivate some individuals while others have high work ethics and do not need motivation. The intent of this paper is to discuss merit pay used by companies, the motivational factors on employees to reach high achievement, and the challenges that employees face due
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...