Pay-For-Performance and Productive Workforces Essay

Pay-For-Performance and Productive Workforces Essay

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The company did not truly have a pay-for-performance process. In fact, what it did have was a pay-for-profitability process, commonly known as a profit sharing program. There is a substantial difference between pay-for-performance and profit sharing, both in terms of how the process is structured and how the payouts are determined. Profit sharing is a program based quite simply on how much profit the company makes, regardless of performance. In certain times, a company may not perform very well yet still make a profit. For example, on organization may incur large expenses, have inefficient use of resources and incomplete accounting of internal asset allocation. However, it may also have huge sales volumes, little competition and an enviable and desirable product. It is virtually successful in spite of itself. Can that actually occur? Examples abound: Circuit City, AOL, Xerox and so on. All quite successful companies, initially, but almost destined for problematic existence as a result of growth that occurred too fast too soon. They did not perform very well, yet were able to generate considerable profitability.
A pay-for-performance program, on the other hand, is designed to reward measurable performance against certain standards. It is created by establishing measurable goals and objectives, assigning individuals to the goals with time bound periods of measurement and finally an evaluation of that individuals’ performance against those goals. The company may make a profit, but if the employee does not meet or exceed their performance goals, they may not receive any reward, or what is commonly viewed as a raise or bonus. True pay-for-performance does not just take profitability into account, unless generating profit was t...


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... their office.(Robbins& Judges,2007) The benefits of telecommuting reduces absenteeism and tardiness. In addition, it also contributes to the green initiative by cutting down the amount of pollutants from motor vehicle travel. According to recent estimates indicate that between 9 million and 24 million people telecommute in the United States (Kurland & Bailey, 1999). Fortune 500 companies such as AT &T, IBM, and Merrill Lynch are just a few.
In conclusion, if Sean Neal utilized the options listed, he could create a more productive workforce through incentives without affecting the company’s bottom line. In addition, Mr. Neal could boost morale which would create a more experienced work force through longevity of employment. By having an experience workforce Mr. Neal should see a significant increase in production and profit over a short period of time.

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