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Speech class - Essay Example

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Variable pay method pertains to the allowing of the reward and incentive based on the performance and overall output and gains made at the end of the session…
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Summary of the article: In modern times with the businesses being performed through various new methods, the variable pay method is one of them. Variable pay method pertains to the allowing of the reward and incentive based on the performance and overall output and gains made at the end of the session or a season. In this paper a practical example of Caterpillar is demonstrated that undertook the variable pay method in the recent times in the light of the uncertain conditions and conditions that were hit by global recession. The variable pay schemes are largely in use in the different sectors and different enterprises. To one estimate over 90 percent and above enterprises and business organizations have resorted to variable pay schemes in order to minimize the chances of further damages and losses that may be incurred in the longer run.
The case and practical example presented relates to the power point slide number 8 in such a way that it is a practical demonstration of the managerial terms and concepts that are often used for in management courses and programs. The variable pay scheme may also be taken into account keeping in view the HR functions such as the clients satisfaction, the overall level of interaction between the top management, middle and lower administration along with the interaction between the inside of the organization and the supply chain outside.
Variable pay method is subject to various factors consideration. These factors pertain to the past history of the organization, the cultural trend and the clients’ adaption to the new concept as well as the legal aspects fulfillment in this regard. Business cycle must also be taken into account and the overall forecast considerations in terms of the small level forecast to medium and long term forecast procedures undertaking.
In these slides, the questions are asked which are associated to the actual condition and situation under which these factors are taken into account. These questions include the following:
Is the variable pay program taken up in the proper manner? Does it take into account the cultural context?
Are the employees provided with the promised incentives in case of the accomplished goals and targets set forth against it?
All these factors are to be taken into account and addressed in order to make sure that the variable pay method is executed properly.
Practical example:
Caterpillar Inc in 2013 took up the variable pay scheme in the light of prevailing circumstances and global recession (Harrer). The variable pay scheme was introduced in the wake of the overall low profits and low investor responses recorded in the recent years. The responses so incurred and recorded were as low as 40 percent compared to the previous year performances and the subsequent gains and benefits from it. Caterpillar Inc found relative stability in its ranks after undertaking the variable pay scheme for the purpose of handling the employees concerns and overcoming the risks of global recession and low sales in the recent years and recent seasons.
References:
Harrer, Andrew. Caterpillar plan illustrates risk of variable pay plans. 1 Sep 2013. 24 Marh 2014 . Read More
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