Human Resources Management Pay for Performance at Dee's Personalized Baskets - Case Study Example

The company needs to analyze following determinants before designing any PFP model. Employees value outcome of their effort in terms of monetary benefit and other recognition Monetary outcome is more valued than any other kind of recognition Performance level expected by the company must be measurable Performance measurement must synchronize with strategic goal of the company Reward must be tempting enough to motivate workers It is evident from the case study size of the organization is not big hence measuring performance of each employee is possible hence the company should adopt individual level PFP system.

Merit pay plan and incentive system will complement individual level PFP program. In merit pay plan payment is done as certain percentage of base salary and distributed in top down approach. Research report shows that workers prefer merit pay plan over straight fixed salary. Merit pay plan helps the employee to assume that employer has recognized his/her performance. The company should adopt the system for all employees. Incentive schemes can be applied to all employees of the company. The company can use incentive scheme rigorously to improve performance of sales team.

Key Performance Indicator (KPI) model can be used to design PFP system for the company (Parmenter, 2011, p. 3-15). KPI will help the company to identify key performers responsible to increase sales and based on appraisal the company can decide salary structure for key performers. Dee’s Personalized Baskets should introduce performance based incentives for all the employees to motivate them to perform well. The company needs two types of additional information to build effective PFP model (Bernardin & Russell, 2013, p. 753). It is evident from the case that the company is lacking in creating sustainable performance standard and appraisal system.

The company should try to design a consistent incentives system to fulfill expectancy of employees (Kreitner & Kinick, 2013, p. 222). External information (industry average for incentives and salary structure and how much competitors are paying to their staffs). Internal data (annual performance report for employees). PFP system of the company needs to address following issues. Annual bonus system not tied with base salary. Bonus pay level should be adjusted to 0% to 20% for non supervisory personnel and 20% to 40% to supervisory personnel.

Forced distribution should be used for performance appraisal. Proper alignment between job designation and performance measurement. Designing annual merit pay program for major achievement Key performance indicator should be integrated in the system to monitor performance of employees and KPI should be used improve performance on monthly basis. Answer 2 Gain sharing is the process of sharing financial benefits of increased productivity or cost reduction with employees. Gain sharing plans aim to reduce level of human resource pool required to produce certain output or increase productivity from existing human resource pool.

Research suggests that maximum effectiveness of gain sharing can be achieved by 1- cooperative union, 2- utmost faith between employee and employer, 3- participation of worker and management to achieve common organizational goal. Research scholars believe measuring gain sharing is difficult because involvement of complex financial