Fair Compensation Budgeting - Assignment Example

Fair Compensation Budgeting Fair Compensation Budgeting Introduction Fair compensation is the situation where workers are rewarded according to their efforts. It is different from compensation where workers are paid without taking into consideration the efforts that workers put into production process. A fair compensation budget is thus the total amount of money that workers are paid according to their efforts, (Brown, 1999). Adams County is a business that has recruited a new manager called Sue Meyers. The business also has a human resource manager called Amy Carlson. She has held this position for the last two years though she has not been very successful. This is because she was under a male manager who could not work with female workers freely. The former manager did not treat workers equally because, in this business, women were not paid the same salary as men. The former manager was known as Job Krebs. He is reported by workers as “old school” because he treated women unfairly by not paying them equal salaries with men. He also appointed only males to head departments in the business. His public relations skills were also not liked by the workers, especially, the females because they were often annoying. He also drank beer in the evening with his male heads of department. Furthermore, he could only ask male heads of department to accompany him for golfing (Brown, 1999). Amy who was the head of department of human resource was not involved by this manager in issues relating to workers because she was a female. If she was to be included into any activity this former manager was uncomfortable. The manager before being appointed was a former Marine and Army was not happy by the fact that he denied the females an opportunity, especially, the very attractive women and who were often qualified more than him (Brown, 1999). Amy was such kind of a lady who was an old graduate of an institution of learning called MPA. Amy Carlson was happy because he was to meet her new female boss and who was to take over the position of the manger of Adam County. Her name was Sue Meyers and Amy had met her for a short while when she was being interviewed. Amy knew that Sue had the right qualifications to be the Manger of Adam County because during the interview she read her resume (Brown, 1999). She apparently had the experience needed to run Adam County. This is because she was a former budget manager and assistant city manager for a large city in Midwest. She had a degree from the University of Kansas and an officer in the Kansas chapter of the International Management Association. However, she was divorced and a single mother. Amy believed Sue would take the company to great heights. Sue was also fit to take over the position as a manager because she said she would keep her private life out of work. She would not discriminate men because of the fact that she was a woman. In a similar manner she would not give women unnecessary favors as well. Sue Meyers also got a salary increment of 20% and transport expenses compared to the previous manager, Joe. The first few days of Sue in office were good but she noted that women were not treated fairly in Adam County. She noted that women were not paid an equivalent rate as men for the same work. Sue suggested a task to Amy for ensuring that women were paid the same salary as men within the next two years (Brown, 1999). She recommended that a pay-for-performance system and asked Amy to find out the benefits this system would bring to the company. She also instructed Amy to implement the pay-for-performance system within two years to avoid criticism and keep controversy down. She recommended for top performers to be identified and be paid according to their great efforts. Question 1 What factors in the current compensation system for the county not identified here might influence Amy’s response? The current compensation system for the county pays women less salary than women. This is not fair because all workers are entitled to the same remuneration. However there are a number of things that will influence Amy in order to change the situation of unequal treatment of men and women in Adam County. First, Amy should research and find out whether both men and women are allocated the same duties in the company (Brown, 1999). She should evaluate this to find out whether, the fact that women are paid lower salaries than men is justified. Apparently, the previous manager might have been paying men more money probably because they were subjected to more work load. Amy should find out exactly why this was the case and address the situation from that point. Secondly, Amy might be influenced by the fact that women take more leave days than men. It might have been possible that the lower pay for women was because they take long leave days, for example maternity leave. This time the worker is not beneficial to the company and it would be justified for women to take a lower salary (Brown, 1999). The female workers might be justified to take a lower salary or lack of appointment as departmental heads because they lack the necessary skills. Such skills include ability to team work, working under pressure but not expecting an extra pay. For women this might seem hard because of their biological make up and their household responsibilities (Brown, 1999). These responsibilities such as child bearing and raising might be inhibiting the full performance of women at the workplace and therefore cannot be relied upon, for example, to do activities such as those of departmental heads. In addition, by the fact that departmental heads work involves a lot of travelling, women might not handle such tasks because of the constraints put on him by society. For example women who take a lot of time away from their husbands are often branded bad and false accusations of engaging in extra marital affairs while away for a prolonged time. Playing the role of Amy, how would you respond to Sue’s statement? The fact that women might not be treated equally due to their biological and society limitations might force the company to implement a pay-for-performance system. This would ensure that a fair amount of salary would be awarded to each worker, (Brown, 1999). The ground for Question 2 Six months later Sue calls Amy while she is at home. She informs her that the Adam County Management Committee requests a budget to be prepared with the salaries of all workers reduced by 10%. However, one of the committee had proposed a 20% reduction. But a considerate committee member opposed this because it would demoralize the very hardworking staff. Furthermore, this member had proposed a pay-for-performance system, instead of across-the-board cut that was not related to performance and that demoralized everyone. Amy was requested to put together something that was both analytically sound and politically sensitive (Brown, 1999). Put yourself in Amy’s shoes and answer Sue’s question, and identify how you plan to proceed with the briefing report Sue will present to the commissioners. Across-the-board cut is a situation where worker are rewarded using the same amount of salary regardless of their efforts in the workplace. This method is not encouraging because hardworking individuals do not receive a fair pay for their efforts. It is thus unpopular and not used in many organizations (Brown, 1999). Briefing Report for Sue to the Commissioners Adam county wishes to implement across-the-board salary cut because the company requires cutting on budget expenditure. Amy the human resources manager should write a report that indicates that across-the-board salary cut has a number of disadvantages which she should include in her report. First, the method would kill the morale of workers to work. A pay cut is a similar to a loss which would hurt the workers. Secondly, the public relations level of the workers with the top management would greatly deteriorate (Brown, 1999). This would in turn affect production of workers in important areas of the business, such as, customer handling. Third, a uniform pay cut would encourage experienced workers to seek employment elsewhere. This would leave the organization without experienced staff and lead to its collapse. Finally, a uniform pay cut only earns short term benefits because reducing of workers’ salaries to cut on expenditure interferes with an organisations most important assets who are the workers. With these disadvantages, Sue should present to the committee the benefits of the alternative method which is pay-for-performance system. First, the method is widely used by many companies which it is beneficial in the management of wage bill. Secondly, the system encourages workers to add more efforts so that they can increase their net pay. This increases the production of the company because workers compete to produce. Third, there is competition in the work place which is brought by the need to make more money (Brown, 1999). This ensures the business is competitive over others in the same industry. In addition, competition is important for the growth and development of careers. Finally, the method is cost effective to the company because production matches payment. The business cannot, therefore, incur a loss in the long run. In conclusion, there are various ways of rewarding worker for the work they do to the organization apart from paying them a good salary. First, workers are often promoted from one job group to another which increases their career satisfaction and status. This is a greater reward than monetary reward because it is long term and can be lead to more benefits. Workers often consider money as the greatest reward they expect from work. There should be change of mind from monetary rewards to other kinds of rewards such as more value for training and refresher course in the workplace. There should also be more appreciation by workers for benefits such as pension payment, health and insurance. Reference Brown, D. (1999). Paying for Contribution: Real Performance-Related Pay Strategies. London: Kogan Page Business Books. Read More