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Strategic Compensation - Assignment Example

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From the knowledge of Week 3 readings, I think employees should be paid for overtime based on person-focused pay. This is a plan that rewards employees according to skills, knowledge, and…
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Case study A. Issue from last Case Study One of the issues identified in the last case study is how much employees are paid. From the knowledge of Week 3 readings, I think employees should be paid for overtime based on person-focused pay. This is a plan that rewards employees according to skills, knowledge, and job-related competencies. The two criteria that should be used to pay overtime according to person-focused pay plan are skill-based pay and pay-for-knowledge. Incentive pay in the company should be defined as compensation, whereby the rewards vary according to a set formula (Greene, 2003). Person-focused pay is advantageous since it controls costs and motivates employees’ productivity.
Employees should be rewarded according to their productivity and not according to amount of their salaries. The factors that an employee need to have in order to be entitled for rewards are work output quality, work output quantity, work safety records, work attendance, and monthly sales. The company in the case study need to implement the following four types of employees’ incentive plans. Management rewards plan that awards managers when they exceed or meet the sales, production, or profit objectives. Piecework plans that reward employees for every unity produced. Behavioral incentive plan that award employees for accomplishing specific behavior such as safety records and good attendance. Person-focused pay plans will be of broad significant not only to the employees but also towards the organization’s productions.This is because the plans will motivate employees’ productivity as well as controlling costs that the company incurs (Gregory, 2009). Therefore, the management should not use the roles of Jane and the shift leader to determine whether they should be entitled for overtime but factors such as work output quality, work output quantity, work safety records, work attendance, and monthly sales.
B. Job evaluation techniques
Job evaluation is defined as an objective and systematic process that organizations use to compared all jobs performed by employees to determine the worth or value of each job category. The focus of job evaluation is to evaluate the job and not the workers who undertake the job (Robinson, Wahlstrom & Mecham, 2004). The criteria used for job evaluation include factors like skills needed, education qualification, job responsibilities and working conditions. Moreover, there are four main methods that managers use to evaluate jobs in their organizations.
Job ranking-This method of job evaluation involves ranking all jobs done in an organization in an order of significance based on their contribution towards achievement of the firm’s goals. The job ranking is carried out after accomplishing job analysis for all positions(Lytle, 2006).
Classification- A series of grades and classes are analyzed in this method. Each class describes a certain group of duties while each grade represents varying stages of responsibility and difficulty in a class (Lytle, 2006). Jobs in each class are sorted by matching their descriptions with the grade descriptions and class and assigning them to the appropriate class that suits them.
Point-factor rating-This method makes use of precise factors to determine the values of jobs in an organization. Compensable factors that relate to a certain job are selected. These are valuable factors that the organization is willing to compensate on their behalf. Example of such factors include supervisory and problem-solving skills(Lytle, 2006).
Factor comparison- This criterion assumes that all duties have five common factors, which include: mental requirements, training and skills, physical requirements, responsibilities, and working conditions. Evaluators develop a compensation scale containing all these factors and rank the worth of each aspect in each job (Lytle, 2006).
References
Greene, R. J. (2003). Person-Focused Pay: Should It Replace Job-Based Pay?. Compensation and Benefits Management, 9, 46-46.
Gregory, J. (2009). Encouraging organizational learning through pay after a corporate downsizing. Management, 2(3), 163-181.
Lytle, C. W. (2006). Job evaluation methods.
Robinson, D. D., Wahlstrom, O. W., & Mecham, R. C. (2004). Comparison of job evaluation methods: A" policy-capturing" approach using the Position Analysis Questionnaire. Journal of Applied Psychology, 59(5), 633. Read More
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