Case Analysis : Case & Mcgowan Company

A Performance-Based Pay system is an increasingly popular compensation method used by organizations to increase productivity. A goal for all companies is to try and remain competitive and control costs, this is a reason for performance-based pay systems becoming more popular. This type of system attempts to link compensation to performance. (Gena Richter, 2002) These systems are directly tied to organization or individual performance and are most effective when based on objective measures of quantity or quality of performance. If we wish to have a direct impact on work motivation, it must be linked directly to the performance of desired behaviors. In order for to put this type of system into place, performance evaluations must be conducted regularly , as well as training and development for those with performance that isn't quite up to par. These additional resources will be necessary for our organization if we implement a performance based pay system. (William B. Bernathy, Ph. D., 2004)

The right compensation program will depend on the organization’s business strategy and goals. To achieve these, an organization must recruit and select the best possible employees. To attract such employees, there must be an attractive compensation plan. Competitors will be offering different payment options, this may be based on pay rate or special perks, and a company’s stock options. Organizations must be aggressive yet reasonable to compete with competitors. Retaining and encouraging employees to perform at their best may be achieved through an immediate incentive award

A well-articulated compensation philosophy drives organizational success by aligning pay and other rewards with business strategy. It provides the foundation for plan design and administration and anchors current and future plans to the company's culture and values (Kaplan, 2006, p.32). Recognizing and rewarding achievement is the cornerstone of the company A’s compensation philosophy. The mission of the company is to attract, select, place and promote all individuals based on their qualifications. The company believes that performance-based compensation helps attract, develop and retain talented professionals. In addition to base pay which based upon local market conditions and targeted to be above market, the company provides the following types of potential compensation to reward performance:

The dominant purpose of this article seems to be to convince the reader that a proper performance related reward system will motivate employee towards excellent work performance and achieving organization objectives provided there is sufficient resources in place with necessary training provided. This article discussed in details on the “performance related reward system” as a tool used by management to promote excellent work performance among employees towards achieving organization objectives and goals. The authors have elaborated various types of performance related rewards system and its relationship to work performance. The advantages and disadvantages in implementing the “performance related reward system” are also highlighted in this

Pay for performance systems have further been proven to have two advantages for organizations: attracting more high-quality employees and motivating employees to exert more effort at their jobs. (Gordon, Kaswin) This paper will show the positive benefits of performance pay as

A. There is no gain or loss realized or recognized by Tom upon the formation of the S-Corp. The beginning balance of stock basis is $ 172,000 which is the total cash contributed by Tom to the new corporation. (See appendix A)

The large firms in the market provide heavy competition in the market for Thornton Company. The competition that Thornton Company experiences in the market has affected its business. The high competition in the market has been promoted by the high profitability prospects in the business. The high prospects for making profits have been behind many of the new businesses that have come up making the industry very competitive. The implication of the high competition and rivalry means that Thornton’s Company has to take on competitive approaches to managing its sales and revenues.

Reward and recognition systems must be adaptable to the changes at the speed of the business, as well as adjust to the existing business climate. A good reward and recognition program should have the capacity to motivate employees while aligning its goals to those of the organization. This program would essentially involve creating a balance between the remuneration of employees and acknowledgement of a job well done while optimizing competitiveness and getting good return-on-pay-expenditure. It is imperative that a clearly or properly thought-out strategy is articulated reflecting the requirements and needs of the organization, as well as its population especially considering the cost of the reward and recognition programs in the

Reward Management (RM) has been defined as the distribution of monetary and non-monetary rewards to employees in an effort to align the interests of the employees, the organisation, and its shareholders (O’Neil, 1998). In addition O’Neil (1998) also suggests that a RM system can serve the purpose of attracting prospective job applicants, retaining valuable employees, motivating employees, ensuring legal requirements relating to direct and indirect rewards are not violated, assisting the company in achieving human resource and business objectives, and ultimately assisting the organisation in obtaining a competitive advantage.

Organizations create compensation and benefits packages in order to attract the best talent. In today’s global economy it is imperative that organizations offer compensation packages that are competitive in order to recruit the very best talent in the world. However, in order to be successful, compensation packages must align with business strategies. Authors “Mathis, Jackson, and Valentine (2014) explain that an effective total rewards approach balances the interests and costs of the company with the needs and expectations of employees” (p. 369). In order to gain a competitive edge, organizations must balance the costs of payroll and benefits with rewarding employees for their contributions. This paper will analyze the construction of a compensation and benefits package that is needed for a new secretary position at the Frye Memorial Hospital in Huntington, WV. The paper will highlight the essential elements of a compensation package. Moreover, the paper will examine how the compensation package aligns the Human Resource (HR) strategy with the Hospital’s business strategy.

Recognizing and rewarding high-performance is a key recommendation for any approach when managing any merit pay program (HRIS 2012). Merit pay is a compensation system where base pay increases and is determined by an individual’s performance. Using a merit pay plan is a good way for an organization to reward high performance is one benefit when using merit pay programs. The first step in implementing or improving a merit pay program is to have a solid performance management program, and this is another way a merit pay program is beneficial. Merit pay is a way to be successful and effectively implement merit pay with a uplift in salaries, and this is a third way using a merit pay program is beneficial to an organization. There are some drawbacks when using merit pay programs, such as paying some employees more than others. If you pay high-performing workers more than low- performing employees, the high- performers may stay, causing the low- performers to complain or leave the organization. A second drawback in using merit pay program is that employees become less motivated if not paid to their satisfaction. For example, if employees feel they should be making more money for their performance, this causes them to have low self esteem, and want to find employment at other organization. The last drawback associated with

Organizations use pay strategies to assist in the administration of compensation plans. The use of a formal pay strategy allows the assessment and grouping of similar jobs together. Global employers follow different pay strategies because pay strategies are profoundly influenced by different factors such as culture, social contracts, labor relations and management practice. Compensation creates a link between reward and results. Meaning that organizations seek to achieve the return of investments made on employees by motivating and appropriately rewarding them to influence performance, making the design and implementation of effective performance management systems an extremely important aspect of global HRM.

Hence, the performance management pay system is a good way to motivate and encourage employees to perform better in their job in order to get paid, especially the workers who have low commitment towards the organization. From the perspective of an employee, the compensation which provided by the company is a return in an exchange between their employer and themselves (Milkovich, Newman, & Gerhart, 2014). The employees perform well in their job as a return of the salary they get. Besides, the employees stay in the organization when they are motivated in completing their jobs. This is a good way to retain the employees from resignation. Hence, the pay system used by the Company D is better than the another three companies which provide pay for performance of achieving objectives, various criteria and progress against targets

Being rewarded and recognised for their work or contribution is what keeps an employee motivated to work towards achieving the organisational as well as personal goals. When the employees is motivated by rewards, they will have job satisfaction consequently increasing the productivity of the organisation. It necessitates the need of managers to pay more attention in understanding their employees and come up with suitable types of reward systems for the organisation so that the employees are intrinsically and extrinsically motivated all the time. The hypotheses that I put forward here is to support this statement that effective reward management is critical to

With a larger staff network spread over wider geographical area, it will be important to implement a reward structure that communicates the overall strategy of the organizational goal. An example is to focus on team productivity, profit sharing and skills based pay to enhance ability and motivation of employees to increase efficiency (Fisher, Schoenfeldt, Shaw 68).