O'Meara Electronics - Case Study Example

O'Meara Electronics Name Date Table of Contents Introduction 3 Position based remuneration system 3 Person based compensation system 5 Case study analysis 6 Conclusion 8 Recommendation 9 Introduction Various remuneration systems may be used by different organizations to meet diverse needs and ensure that employees are adequately motivated. Both the position and the person based remuneration are mainly used to make sure that organizations succeed and have the right remuneration systems in place to ensure that employees record high performances. However, employees, as well as the executives, may have different opinions depending on their positions and the type of remuneration that is in place in the company. Individual performances and the skills that employees possess are well integrated into the person based remuneration which makes it comprehensive and well applicable in any organization. In this case, person based remuneration should be adopted by the O'Meara Electronics to facilitate the success of the organization and ensure that the performances improve. The first part will cover the position based remuneration system; the second part will cover person based remuneration, the third part will cover the case study analysis, the fourth part will cover conclusion while the last part will cover the recommendation to the O'Meara Electronics on the type of remuneration system to be used. Position based remuneration system This kind of pay systems focuses on the positions held by the organization as the basis of the compensation. Therefore, this system further operates based on the responsibilities that people possess in the company and through this employees are rewarded by their additional value to the company. According to Hon, (2012) it is important for the companies to make sure that it can safeguard the needs of its most valuable employees to ensure that it can succeed in the long run. However, this type of remuneration system is also important given that it helps in ensuring that those with special needs such as disabled and other disadvantaged people in the society are well protected. The disadvantaged in the society have no ability to execute various operations as the other part of the society which is important for them to succeed in a given social setting (Léné, 2014). Protecting employees is important since it helps in eliminating cases of employees turnovers which normally arise as result of employees' perception that is not valued in the company (Lavy, 2007). For instance, to safeguard the employee's value in the organization, at times there may be cases where employees are promoted to make sure that the have the ability to perform at the highest level. One of the major weaknesses of the performance-based remuneration is the failure of the system to consider various performance-based measures to determine the right remuneration that the organization is supposed to institute. On the other hand, there may be cases of lack of motivation especially among the junior employees who may feel that their efforts are not appreciated in the company (Buytendijk, 2008). Position based remunerations, therefore, helps in establishing the right link of the employees, their value and the responsibilities that they have in the organization. Given that position based remuneration is a hierarchical form of payment, employees are rewarded based on the responsibilities they hold in the organization (Xueyan, 2015). According to the case study employees various personnel such as the electronics engineers and electronics technicians and also employees others in research and development, production, storage and dispatch departments, marketing department, accounting department, general administration and a Human Resource (HR) department. However, most departments have employees' ranges between 10-15 employees. However, those employees are paid depending on the positions they hold in the organization. In position based remuneration, the employees are paid depending on their position, and in this case, the departmental heads are paid more than the others especially in Melbourne. This shows that they are paid based on the position based remuneration system. Person based compensation system Person based compensation is a type of system where knowledge, abilities and the strengths of individuals are relied upon when instituting the right reward in the company. There are various in which employees value to the company can be measured given that different department plays diverse roles which make their contribution different (Mitlacher, and Welker, 2010). Therefore, person remuneration based system helps in establishing the right balance between the compensation of the management and the junior employees. It is important to appreciate the work carried out by the employees (Halvorsen, Steinert, and Aaraas, 2012). However, one of the primary requirement of the person based remuneration system is the requirement that employees must harness their skills to ensure that their performance is at the highest level within the organization. However, attending to the employee's enumeration are rewarded based on the skills that they possess and the ability to execute the various task within the organization. This type of compensation system helps in structuring a way where self-motivation is promoted within the organization. If employees are to ensure that they sharpen their individual skills in the organization, then person based remuneration is the key. The organization has a responsibility of making sure that it consistently trains the employees to improve their performances in the long run (Giancola, 2007). Even though person based remuneration is essential for the success of the organization, it has various limitation given that it may motivate individuals to focus on their individuals target thereby abandoning the organization set targets. Therefore, it may affect teamwork given that employees may concentrate more on their individual development and their personal needs which may increase the conflict within the organization (Stanhope, Pond III, and Surface, 2013). Case study analysis The director of the HR management Sarah Jones is responsible for instituting measures to help in improving the employees' welfare and in making sure that they are adequately motivated. This will assist in motivating the employees in the long run and thereby improving their performances. The president, in this case, was more focused on the position based remunerations since they were more focused on the remuneration of the management which affects the employees' motivation as Sarah Jones indicates. The managers such as Harry, the production manager shows that he supports the change in remuneration process given that employees should be paid depending on their output (Abelsen, and Olsen, 2012). On the other hand, O'Meara Electronics have various departments that operate differently. In this case, employees in the various department have different capabilities, but the main employees are mainly electronic engineers. Different departments include human resource, general administration, accounting, marketing and the dispatch department. O'Meara Electronics can utilize the person based remuneration in the form of skill-based structures which is one of the most fundamental ways to ensure that employees are rewarded due to the skills they possess. However, this is mainly based on the depth and the breadth of various skills that employees possesses. Through this employees can either be remunerated based on the bonus or the base pay (van Dijk et al., 2013). In the case of the O'Meara Electronics, there are various departments such as engineering, marketing, and human resources among others requires expertise to run in the right manner. In most cases, the level of remuneration should be based on the role they play whether general or specific based on the laid out strategies. For instance, some employees may have expertise several departments while others may have knowledge of specific departments such as accounting and finance. If a person can handle both, then they should be remunerated differently due to the level of knowledge they possess as well as the skills (Zaim, 2007). Karen, Head of Research and Development, on the other hand, supports this by indicating that there is a need to shift to a remuneration system that is likely to reward employees based on their performances. However, the use of person based remuneration helps in integrating the employees in the performance appraisal process which is important through a participative process. Furthermore, according to Jenny from marketing, employees often perform various tasks which are a lot of work while the management does not executive often perform simple tasks which show there is a reason to ensure that the type of remuneration is changed. Furthermore, most of the employees were more focused on promoting the self-managed team which could be effective in forming the right remuneration to the company. The company, performance management system, is based on the customer relations. Furthermore, the employees were of the opinion that the systems in place lack regarding processes and activities to manage performance and that supervisors and employees don't work well together. It is important to ensure that the level of knowledge within O'Meara Electronics is used to evaluate ways in which remuneration is carried out by the organization. Even though auditors, engineers, accountants, and marketers are valuable to the O'Meara Electronics, it is important to make sure that they are well remunerated by the company. (Abelsen, and Olsen, 2012). However, the company, in this case, may need to establish a comparison between the remuneration in place and that of the industry to discourage employee turnover. However, bonuses should be in place depending on the employee's performances to encourage to sharpen their skills and at the same time work hard to achieve the set goals. Adequate knowledge in needed to succeed in the organization depending on the responsibilities that have been allocated to the employees (Dierdorff, and Surface, 2008). The use of performance-based remuneration will help in making sure that those employees with the ability to achieve high performances are remunerated effectively, and this may be used to encourage other employees to work hard to make the company set goals. It is important to come up with ways of evaluating various performances issues within the organization which should be the basis for instituting the remuneration systems within the organization (Smithers, 2016). Conclusion O'Meara Electronics has succeeded in the past, but still more can be done by the shift from position to personal based remuneration systems. Personal based compensation incorporates various aspects that help in improving the employee's performances which are essential for the long-term success of the company especially with its expansion to the international market (Hausmann, and Bechtold-Orth, 2010). The success of any organization should be based on the team ability to motivate employees and ensure that there is teamwork within the company which may lack due to the type of motivation in place. Motivation highly influences the way employees are treated in the organization especially since the major focus should be on the employee's performances and the level of skills that employees possess (Holte, Abelsen, Halvorsen, and Olsen, 2015). Recommendation The challenge the company is facing is trying to eliminate the notion that some employees are remunerated in a manner than they do not deserve where others may feel that they are not rewarded in the right way. However, O'Meara Electronics should ensure that it incorporates various parameters while determining the type of remuneration to be put in place given that employees execute different responsibilities and must be evaluated differently. Furthermore, by doing this, O'Meara Electronics will be able to motivate employees to undertake various tasks, and this will improve the overall performance of the company and thereby improving profitability which seems to be the challenge. Unless the employees are completely motivated, then their output may be highly affected especially in cases where they are not managed in the right manner. The use of person based remuneration helps in encouraging employees to further their training to advance their careers and at the same time make sure that profitability within the organization improves. Furthermore, adequate training and promotions as a result of better performances will also help in motivating employees as this will also assist in motivating them. On the other hand, the use of the personal based skill remuneration can also be of major assistance in cases where there is a need to ensure that valuable employees are retained in the company. However, given that their value depends on the level of skill they possess, it is easier to implement the person based remuneration will be the most efficient in the long run. References Abelsen, B. and Olsen, J.A., 2012. Does an activity based remuneration system attract young doctors to general practice?. BMC health services research, 12(1), p.68. Buytendijk, F., 2008. Performance leadership: The next practices to motivate your people, align stakeholders, and lead your industry. McGraw-Hill Professional. Dierdorff, E.C. and Surface, E.A., 2008. If you pay for skills, will they learn? 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