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
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
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
On the date of December 8, 1953, in New York, President Dwight D. Eisenhower gave his speech, Atoms for Peace. 1 This speech was addressed to the United Nations Assembly. 2 To this large audience of well-established political leaders, Eisenhower addressed the root of the most pressing fear to envelop the Cold War. This fear was of a possible atomic annihilation that would have resulted from the tensions held between the United States and the U.S.S.R. The root of this fear that was addressed was the continued advancement and storage of atomic and nuclear weapons. Eisenhower presented this speech with the hope that he might have been able to turn the United States away from a possible war with the Soviets. Shawn J. Parry-Giles of the University
Firstly, there was compelling emphasis placed on exterior factors, for instance, Scanlon Bonus Plan, a motivator plan that inspires and drives employees’ performance, yet neglected to cultivate workers ' needs. If the Plant business integrates the Maslow’s Hierarchy of Needs into their strategic management process, it will guide them in evaluating employees’ needs. Engstrom Auto Mirror Plant should settle on the choice of keeping the current system in place, modify it, or design a new incentive plan. Keeping the ongoing incentive plan would be an awful decision for different reasons that were examined in preceding milestones; subsequently, the undeniable decisions would be to either correct the present plan or to make an altogether new one. For this proposition, it is ideal that a new incentive system be
The Paradox of Professionalism: Eisenhower, Ridgway, and the Challenge to Civilian Control, 1953-1955, by A.J. Bacevich
---. “Little Rock Told To Integrate Despite Militia.” New York Times 4 Sept. 1957: 1.
In the year 1801 Thomas Jefferson reluctantly sent the infant navy to the shores of Tripoli in hopes of avoiding an attack on America by the Pasha of Tripoli. Many years later, October of 1962, America once again teetered on the brink of war, but this time with John F. Kennedy by their side, and the threat was nuclear war. Two situations very different, but also similar; two outstanding presidents who did what they thought was right in the time of crisis. Perhaps had Thomas Jefferson been in charge in the year 1962 the outcome may have been different, or would it have? John F. Kennedy responded to the Cuban Missile Crisis of 1962 by playing a game of "nuclear chicken", had Thomas Jefferson been in charge he would have tried to negotiate with Khrushchev , then threatened war; Jefferson would not have threatened the entire globe with atomization by playing "nuclear chicken".
President Eisenhower wrote a speech in response to the events that were taking place in Little Rock, Arkansas. The intended audience for this speech is the citizens of the United States, the people in Little Rock, Arkansas but most important the powers of the world, waiting to see how the United States would handle the situation. The events in Arkansas would have a very huge impact on future Supreme Court Decisions and the Executive powers of the President.
Besides this, an employer can use other tools to value the commitment and the engagement of an excellent employee. As a manager, from my experience (because in my country the salaries are fixed and based on the performance I cannot decide for a merit rise) I used different tools, in order to encourage my team. Sometimes, not just the money is a satisfaction, especially for young professional they better prefer do get promoted, to enjoy different experiences (such travelling abroad for the purposes of capacity building) or even to get announced as the best employee of the year. Therefore, besides compensation, there are other forms, that are not just material but are some other honorable tools that a manager could use in order to motivate and encourage the team
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.
Johnson, Sam T. "Plan your organization’s reward strategy through pay for performance dynamics: Compensation & Benefits Review 30, Number 3: (May/June 1998): 67-72
...e “ The reward system of the organisation guides the actions that generally have the greatest impact on the motivation and performance of individual employees”. Similarly, Wah (2000) argues that companies which treat their high-performing employees significantly better than those that don't are the best-performing companies around and they reside in the upper quartile of shareholder returns. In addition Lawler (as cited in, Readings In Contemporary Employment Relations, 1998) states that if all the psychological rewards are removed employees will grudgingly remain at work, however if all the financial rewards are removed they would most likely leave.
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).
Merit pay is a vehicle for employers recognizing individual performance and motivating employees to reach higher achievement. Competition is a natural human instinct and healthy competition compels employees to perform at their highest level. Employees must have clear, attainable goals and supervisors must provide continuous feedback, publicly praising employees to motivate performance. Additionally, employers that recognize and reward individuals for their exceptional performance in tangible ways, ultimately increase employee’s self-esteem and encourage them to maintain a high level of commitment to the organization. Employees are more apt to stay with a company when they feel that their hard work is appreciated and compensated. When employees are highly driven, it decreases absenteeism, tardiness, and results in a positive work attitude. In fact, employers use merit pay not only to retain highly motivated performance individuals, but also to attract new employees who are motivated by monetary rewards cultivating a productive workforce. Personally, I think merit pay plans are a great incentive if they are implemented fairly, equitable, and based on individual performance. Furthermore, I feel nothing demoralizes a high performing employee faster than knowing that all employees who contribute less to performance will receive the exact pay increase. If merit pay programs are instituted, they must ensure that
The total pay package has a direct impact on the successful recruitment, selection and the retention of staff within any organization. This pay package is critical for any business to remain competitive in today’s business world. Competitive compensation packages are vital to both large and small organizations as they encourage the retention of talented staff.
Reward systems have been evolving and growing throughout the years, but there are many types that have always been there. Base pay is the most common, which is an employee’s base wages and salary that they are paid on hourly, weekly, monthly, or annually (Luthans, 2011, p.94). Merit based pay is another type of incentive, which rewards and motivates an individual to perform their jobs to the standards of their employers. According to the text Organizational Behaviors, by Fred Luthans, there are three other options for paying an employee for their performance: individual incentives pay plans, using of bonuses, and the use of stock options. Individual based pay plans are based on the employees output and/or quality. Some organizations use bonuses as incentives to their employees. These are offered sometimes as op...