Compvantages Of A Piece-Rate Vs. Time Rates?

Each employee will be paid based on their capabilities rather than on the characteristics of their job. This will provide an incentive for employees to develop their skills and move into other roles.

One of the important aspects of business management is having a proper compensation system. Compensation ensures that the staff of the company obtains the results of their efforts. Compensation is a cost to the enterprise and, therefore, a proper remuneration model must demonstrate its ability to produce returns. Also, since compensation is what the employees get in exchange for their services, the type used must be one that will motivate the employees (Belcourt & McBey, 2015). Henderson printing company is a mid-level company. Therefore, it requires a very critical remuneration system that will help it to survive. This memo explores the compensation models that Henderson printing operates as well as suggests the necessary changes.

This schedule of reinforcement is the logic behind factory piecework, where workers are paid by the number of items produces rather than the number of hours worked.

The challenges of an organization can influence the performance of an organization from a satisfaction with pay (Gomez-Mejia, Balkin, & Cardy, 2016, p. 296). The employee salary within an organization is a huge cause for turnover of employees (p. 296). First, the topic of employee salary is of great importance for the current and potential workforce (Lee & Lin, 2014, p. 1577). In addition, employees that have the perception on receiving lower compensation that others within their market will lack in performance and have a desire to leave the organization (p. 1577). In retrospect, the regular evaluation of compensation within the organization is vital to the reduction of employee turnover (p. 1577).

Hence, person focused pay systems typically have higher average hourly wages than traditional pay systems. Since skill-based pay systems give everyone the opportunity to learn multiple skills, a large investment is made in training and, of course, training is costly in terms of paying trainers and losing production time. Furthermore, the more serious problem is that when individuals are constantly learning new jobs, production losses and problems result because inexperienced people are performing the work. Because employees are always trying to leam new skills under this kind of pay system,

The intent of this assignment is to develop a user-friendly tool that may be applied in the workplace to document Compensation processes and to guide a practitioner in completing the critical steps of each process. The purpose of this assignment is to assist in describing each component of a compensation management system, to develop a practitioner's guide for several of the key compensation management tasks covered in HR511 Total Rewards.

In the technical sense, penalty rates are a form of tangible benefit within the financial context which generally refers to those payments made to workers outside normal working hours. Regulator motivations for including penalty rates in modern awards as stated by (Sloane, 2014) are twofold: firstly, to compensate workers for work performed during what was historically known as ‘unsociable hours’ and secondly, to dissuade employers from operating within those hours. However, as advocated by (Sheldon & Thornthwaite, 2013) the modern award reviews have ‘provided a forum for employers and their associations to escalate their campaign to the significance of penalty rates in industries operating during the traditionally ‘unsociable hours’, which is evidence that employer associations prefer to enhance managerial prerogative over productivity which is predominantly concerned with the cost of resources. The push for the examination of provisions regarding penalty rates has mostly been seen to affect the tourism and retail industries.

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:

This paper will examine setting the stage for strategic compensation and bases for pay. There are three main goals of compensation departments: internal consistency, market competitiveness, and recognition of individual contributions. Internally consistent compensation systems define the relative value of each job among all jobs within a company. (Martocchio, pg. 22, 2011) With this system companies want employees to be paid more based on their qualifications and responsibilities. They believe someone with less experience should be paid differently. To determine such evaluation companies use job analysis in order to provide job descriptions. The job evaluation is to determine pay according to a particular position. Market-competitive

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

127). Such propose may be of good intention, but it is clearly premature. Since not all effort by employees may pay off in the near future, such as research. In that case, stock-based compensation would be a good motivator, since it align the interest of the employees and that of the company in the long run. Yet Martin argues that instead of resorting to stock-based compensation, companies should design a reality-based compensation with more creativity that would take into consideration future revenues. For instance, Martin argues, the compensation could be delivered in the form of royalty or licensing fee. Such method may seem to be reasonable and sensible, but only theoretically. As a matter of fact, not all work could be recognized in terms of royalty and patent. For example, a significant part of human resource managers’ work is hard to measure quantitatively, making it unpractical to calculate the compensation based on their work results. Given that spend much time and effort in developing a reality-based compensation system may well not be cost effective, stock-based compensation would be the optimal option for

O’Neil (1998) suggests six minimal criteria for the design of a performance based pay system. The first of these criteria is that the reward system should be self-funding, that is, the performance increases should as a minimum offset the cost of the rewards provided. The second criterion is that the distribution of the rewards must be consistent, fair and justifiable. In addition reward plans must be transparent and clearly communicated. The third criterion

Bearing in mind some firms are hiring interims, staffing services and part-time employees through temp agencies. It is no surprise in this case that a recent compensation survey of business in the local geographical area included information about benefits (Martocchio, 2015). Part-time employment are more readily available because it is considered “hidden unemployment,” says, Chris Tilly, a professor at UCLA, for instance, if a person works 20 hours a week, but wants 40 hours, that unfulfilled time is spent unemployed (Gillespie, 2015). Utilizing the prior options above can save the company money, plus some part-time employees are hired at the entrance level pay, therefore saving the company certain work benefits. Although, the company may utilize the services of a staffing service and or temp agency,

The advantages of shifting from wage rates to piece rate pay is piece rate pay is more preferred in customer service jobs, like in the case of Safelite Auto glass the more the number of customers the more beneficial it is for the employees as well as the company. The first advantage is that it motivates even the weakest technician to work hard as the more work they do the more salary they get. It’s a good opportunity for a technician to complete more jobs than the average number of jobs a day which helps them to earn more than the hourly based pay rates. The second advantage is it is more cost effective as the company is paying only for the number of jobs done by the technician whereas you have to pay evenly for all technicians regardless of their efforts if it was an hourly wage pay. Next advantage is it is easy to identify the good and the bad technicians by this piece per rate pay based on the number of jobs each technician does on an average day, by this the company can eliminate the workers who do not perform good and can also provide incentives and more recognition for good performing technicians which would further more motivate the technicians and increase the productivity of the company. This piece rate pay is a WIN-WIN situation for the company as more productive the employees are more money the

The final problem that we identified is the incoherence of inclusion of the cumulative merit in the calculation of salaries. In the case-study we can read that the system includes cumulative merit. However it is not clear how it is included in the compensation system. In one hand it is said that they measure performance over time at Vitality but in the other hand it is not accounted for rewarding employees.