What Practices Pay off Best and Under What Conditions - Assignment Example

This form of payment will work towards ensuring that there is low employee turn over as most appreciate that the employer is considerate enough. Adjustments of pay in relation to the cost of living encourage the employees to be loyal to the company and to increase their output. This form of payment is particularly beneficial to the employees as during harsh economic times they are assured that the employer will adjust the pay in their benefit. ReferencesBelcher J. G. (1996), How to design & implement a results oriented variable pay system, New York, Amacom Div American Mgmt Assn.

What Practices Pay off Best and Under What Conditions?The pay system brings on board various groups of people and this determines what they perceive of the company or the employer. The society or the community considers job compensation often referred to as pay as a measure of justice towards the employees. It is the society’s belief that benefits extended to the employees are a reflection of the level of justice in society. The most beneficial form of payment to the employer is the incentives or the variable pay.

In this form of payment, the pay rise is triggered by the performance of the employees. Some of the assumptions of the variable pay method are: some employees are more productive than their peers; some perform better and are better equipped with technical skills; better performance should be rewarded; and some of the employees’ earnings should be directly proportional to performance (Busucf, 2007). The strategy is best suited when the management wants to link the strategic business goals with employee performance.

This works towards enhancing company output results and thus adequately rewarding the employees financially with the level of their contributions. When the employees are rewarded in accordance with the level of contribution, then the hard-working ones will continue to work even harder and the non-performing will be inspired to put extra effort according to Belcher (1996). It is a self-regulatory system that keeps off the lazy employee and encourages the hardworking ones to contribute towards the profitability of the company (Belcher 1996).

In adapting whichever form of payment, the employers should always consider the effect the adapted form of payment will have on the employees, investors, management, stockholders, and the company as a whole. The form of payment may demoralize or motivate the concerned parties, therefore, having a direct impact on the profitability of the company.