Human Resource Management - Essay Example

It would make a lot of sense if the new executive director were paid in part for his achievements to further the organisation’s objectives. The fixedmodel of pay structures is declining in use especially for higher management personnel. The provision of a fixed pay to higher management means that they become complacent in terms of the organisation’s objectives. One primary reason why most executives fail to perform according to their potential is that their stakes are not intertwined with those of the organisation.

Furthermore, the lack of any incentive to these executives means that their efforts are limited to clerk like jobs alone and innovation remains on the back burner. Once a top executive realises that no matter how hard he struggles for his organisation, all he will receive is his fixed salary, the performance levels of the executive will begin to recede. The removal of incentive is effectively the removal of motivation on the job for such positions.It must also be realised that when such executives join office their primary motivation is the challenge posed by the new position.

Once an executive figures out how to manage the new position, the real motivation begins to disappear from the job. In order to keep motivation on the job to a high level, it would be desirable to use a fixed and variable pay structure to serve as the executive’s motivation. On another note, this pay structure aids in ensuring that the executive treats his job more seriously than before because his financial stakes are involved with the performance of the organisation. While it may be considered as cumbersome by some top executives but this model ensures that the organisation pays the executive back in proportion to their efforts.