Main Gainsharing Plans, Job-based Pay - Assignment Example

Part A each questions 200 words Q3. Identify and discuss the main Gainsharing plans? Gainsharing is a management system where an enterprise targets higher level of performance through involvement and participation of its workforce. An organization that employs this kind of system has a higher likelihood of recording improved performance. The reason for the enhanced performance is because as the company’s performance increases, the employees benefit from the financial gain realized through the increased performance. Gainsharing plan is applicable to almost every sector of production that ranges from healthcare sector, manufacturing firms, public sectors as well as non-profit making organizations (Shields, 2009). The main features of a gainsharing system that makes it a success comprise of: Employees that are actively consulted in designing process. A gainsharing system often involves a single site as well as stand-alone organization. In addition, the system is designed in a manner to support the daily activities of the employees to enhance improvement initiatives. Lastly, and most important is that the gains and corresponding payouts are self-funded and are based on the savings generated through improved performance (Shields, 2009). Q6: Briefly compare and contrast position-based and person-based base pay options? Job-based pay is a structure where employees’ salaries are determined depending on the analysis and requirement of specific position. Job-based pay is often regarded as an out-dated model where employees’ pays are based on their academic qualifications and seniority. This method gives employees a sure way to predict their salaries increases. It recognizes royal employees by rewarding them accordingly for working with them over a long period of time. This method offers fairness within job titles as the pay is structured by the job. This type of pay is not suitable for the employees who are self driven as they perform more and get the same pay with the rest in the same title who work less. Similarly, those in the highest ranks do not have any motivation as they have reached self-actualization point and have nothing to motivate them. On the other hand, knowledge-based pay is where employees’ salaries are based on their ability to deliver results, rather than on job titles. This model is best suited for those employees who are ambitious, self-driven and aim at their career development. Their objectives are to learn new skills and acquire new knowledge, rather than focusing on the pay that is the immediate reward which most employees aim. This method rewards those employees who perform at a higher level. When organizations reward for new skills development, they encourage their employees to work at a higher level (Shields, 2009). Q7. Identify the key environmental influences that have significance for HRIS. Data is considered as sensitive and confidential. One of the greatest challenges for HRIS is the potential risks of the privacy of the employees’ data. The human resource managers are nowadays worried on the impeding danger of the employees data that is stored in their system been maliciously damaged by authorized or unauthorized users. Therefore, it is imperative to ensure that the manger is aware and keen on the users’ access, data disclosure, data accuracy as well as rights of inspection and HRIS security. Failure to guarantee this may lead to ethical, legal and employees’ relations issues that could compromise the credibility of the system.HR of global enterprises should make sure that their HRIS meets international security standards. Nowadays, organizations should be cautious for legal litigation resulting from employees’ bad use of emails and internet. Most employees use internet for their personal use such as viewing pornography, sending personal emails as well as downloading movies and songs. Organization may suffer litigation in instances where the employees use office emails illegally and that is why it is important for establish policies that will regulate the use of emails and internet. One such important policy is to let the employees be aware that the management reserve the right to monitor their activities and their email messages are not private and can be read by the managers(Shields, 2009). The flexibility of the HRIS is also an important aspect of the system. The system should assist the HR manager to use data in a manner that he/she should not have imagined. The flexibility is important because the system should help HR. managers be in a position to estimate accumulative cost for increasing the salaries of its workers with a certain percentage say 2%. The system assists HR. managers in analysing, estimate costs and savings, as well as determines trends. This is important as it becomes an important tool in forecasting, succession planning as well as planning career development. The system transforms HR. managers from information resource to strategic resource (Shields, 2009). Part B each qustions 500 words Q3.Identify the main advantages and disadvantages of both pay systems? Advantages of Position-Based Pay Pay for value: in a job based pay the employee gets paid for the value of work one works for the company. This method gives the employee a more tangible quality pay than a person based pay where the supervisor must evaluate the value of work done to determine what one should get. In job based pay employees are paid according to their grades, titles and seniority that is specified and reflects the relative pay of the tasks assigned (Shields, 2009). Fairness and equity: although it does not guarantee a 100%, gender fairness, this method of pay can assists greatly in eliminating gender biasness in the payment. Since the payment is based on the employees’ job grade, the pay is not thus subject to one’s personal qualities. Some companies adopt this system primarily to eradicate employees’ discrimination. Although, the glass ceiling is still predominant in the job market, job based pay make sure that men and women that belong to the same position are paid equally (Shields, 2009). Clear steps to higher pay: the steps to earning higher pay are very transparent in job based pay. Pay rise should follow job promotion. The system is specific on the skills and qualities you should have to move to the next grade and therefore the process is more informal and founded in the acquisition of new skills and knowledge (Shields, 2009). Disadvantages of Position-Based Pay High turn over: ambitious and hardworking employees who are self driven may quite because they may feel as if their effort are not appreciated. For example employees whose efforts bring an increase in earnings or new businesses will expect their effort to be accompanied by a reward through a pay rise or bonuses. Therefore, if such employees are not rewarded they may feel de-motivated and quite (Shields, 2009). Poor Evaluation: job based pay do not reward their best employees for their effort. When assessing employees’ job based pay structures are limited in giving pay rises that takes into consideration an employees skills and experience. It is a fact that an employee’s performance considered insignificant in this payment structure. Increased operating cost: this type of payment structure can increase operational cost as it may lead to hiring of a consulting company to carry out compensation audit. In addition, the company is more likely to always review its pays every year which adds more administrative costs (Shields, 2009). Advantage of Person based Pay: Thee less experienced employees do not feel intimidated by seniority. The factor of seniority does not come into account in the compensation of work done. Therefore, the employees’ payment is measured against parameters such as their competence, leadership skills and earnings realized through their efforts. Incentives to achievement: in a person based pay, workers are given rewards and bonuses for good work done. This motivates workers to perform at a higher level as well as acquire important skills and experiences to enable them develop in their career. This creates a culture of improvement as employees aspire to enhance their capacity which may translate into greater performances (Shields, 2009). Disadvantages of Person-based pay Favouritism: because there are no clear structures to determine what one should be paid, there is likelihood of the payment structure encouraging favouritism in the payment where they pay their friends or relatives more than they deserve. Relationship of competence to performance: sometimes it is very difficult to establish the competence that resulted to increased performances. In such a case, it becomes very hard to determine whom to reward for the gains realized by the increment in performance. In many situations, the increase in performance is a collaborative effort rather than an individual input (Shields, 2009). Q4.Compare and contrast competency-based and skill based pay.  Skill based pay have for long been used to refer to jobs within trades. The level of skills is the parameter that has been used to determine the level of position. For example, positions such as apprentice, journeyman as well as master craftsman. Nowadays, the pay is common in white collar jobs where, where organizations assign positions and give promotions based on acquired skills and experience rather than receiving promotions via various management levels. On the other hand, competency-based pay gives rewards primarily on the use of competence without putting into consideration the gains achieved by employing the competence. The notion behind this pay is that employees’ who possess high and relevant competence will yield superior performance. Competence base pay concentrates on individuals. However, it is rarely used on its own to determine pay as performance is also assessed. Both skilled and competence based-pay focuses on individuals rather than the job, though how an employee is assessed for pay differs. Skilled based pay is preferred more as it has been in use for long as the basis for defining jobs. In this pay, the pay is defined by specified assessment or certification. The pay structure has been used in determining pay for the white as well as the blue collar jobs, unlike the competency structure that is only used on the employees in management positions (Shields, 2009). Q7. Is Kohn right or wrong about incentive plans? Discuss, particularly identifying Kohn’s analysis of why Performance-Related-Pay schemes often fail Performance related pay schemes are good strategies for motivating employees in enhancing their performances that may lead to increased gains. However, the system possess great shortcoming that makes it very difficult to implement in some entities. One of its short coming is its inability to specifically link a certain gain to an employees. This is because the activities of organizations are closely integrated such that an increased performance in one area will impact positively to the other. For example in a manufacturing company the good work of research and quality assurance departments will result to production of high quality products that is more likely to be reflected in form of an increase in the market share of the product. Likewise, good marketing strategies can result into the same. Thus, in such a case it brings a dilemma when deciding on whom to reward and not; the production or the marketing manager. The system is not also considered as a fair pay structure as it gives rooms for misuse where managers can give undue bonuses to their friends and relatives who may be working in same company. Q10. Compare and contrast agency theory and managerial power theory. Discuss what you regard as the relative strengths and weaknesses of both as a means of understanding executives’ motivation and behaviour (Shields, 2009). Managerial power theory argues that the remunerations given to executives are higher in relation to a fair compensation contract. In a perfect labour market, potential employees and employers meet in a market place to deliberate labour in exchange for equal compensation, in such a case each party have sufficient information to make an informed decision and there are enough competitors for labour and employers such that each has an equal bargaining power. In such a situation, the market will dictate fair compensation for the exchange of labour. However, the managerial power does not operate in this manner. The executives have the ability to create unequal bargaining power that result to them being excessively compensated than their performance. This happens because corporate executives have the power to control the board of directors who set their pay (Shields, 2009). There is no good strategy for arriving at the compensation of the corporate executives because some executives without adequate competence, skills and experience may use their close association with the directors to hike their salaries. On the other hand, it is a good option as the strategy gives corporate executives an upper hand when bargaining for their compensation and because the executive position comes with big responsibilities; the huge remuneration acts as a sure compensation for their vast experience in management and competence(Shields, 2009). The agency theory is used to resolve the issues that arise between the shareholders and corporate executives. Issues arise when the executives and the shareholders have conflicting goals or possess different risks tolerances. For instance corporate executives may make sensitive and major decisions for immediate gains in spite of long-term risks involved. Since the risk tolerance of the two parties is different, it may prompt the shareholders to possess a different opinion with a totally opposite view. The shareholders do not have total authority to overrule the same instead they will have to resolve the issue accordingly. Since the theory recognizes the competence and powers of the executives and has appropriate strategies for addressing the conflict, it helps executives in resolving such arising issues amicably and feel motivated that their vast experience, skills and knowledge are recognized(Shields, 2009). Q12. While web-based HRISs clearly offer tangible benefits for both employees and managers, what might the future hold for the traditional HR department as a result? Discuss both the potential positive and negative impacts that ESS and MSS systems may have for HR in a large organisation The human resource department plays a significant role in the management of the human resource which is regarded as an important element in any organization. Traditionally, the HR. department was regarded as the data resource centre where organizations could get important data for their employees such as employees, academic qualifications, experience as well as remunerations. However, with the advancement and embracement of technology the HR. has greatly transformed from a resource centre into a strategic one. Nowadays HR. is in a position to compute relevant data into important information that can be used for strategic decision making such as decide the rate of pay increase, forecasting, as well as planning for the succession plan. The use of ESS and MSS are tailored in enhancing the performance. Employees as well as the mangers are given some rights to update their data according, which helps the HR to concentrate on more important issues (Shields, 2009). Despite, the great competitive advantage that accompanies the use of HRISs, its adoption comes with some challengers. For instance, it exposes the company to a greater risk of data privacy as the data stored by the HR. can be malicious damaged or altered by both authorized as well as unauthorized users if the system is not well secured. The use of the HRISs also gives the company more tasks to formulate important policies to govern how employees uses their emails and internet to safe guard the company from some employees may misuse them by leaking internal companies secretes to their competitors or doing illegal things that may lead to litigation (Shields, 2009). Read More