Human Resource Challenges and Practices in IT Industry

3. Total Rewards Strategy – This structure is very complex, yet comes with a lot of flexibility to allow for growth and internal satisfaction. The pitfalls with this structure come with the implementation, which could be treacherous and difficult to convey to our employees.

Changing to a pay-for-performance pay system always has several implications. The most important of these are discussed in the succeeding paragraphs.

With the constant change in today’s business world, to have a competitive advantage makes it difficult for employers to attract and retain the most talented employees. Identifying the company’s compensation strategy ensures the organization offers the right pay and manages the pay increases to retain top talents. When we hear the word compensation we think about compensating an employee for their work performed, but there

* The first two assignments (Stages I and II of the project) are worth 100 points each.

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:

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

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

Although research generally confirms that pay-for-performance plans can influence greater outcomes, it is unclear how effective different pay plans are relative to each other (Park, 2012). Like most things in business, compensation is something that requires evaluation, study, assessment, strategy, modeling and integration.  Achieving a pay for performance culture does not happen without paying attention to the behaviors, activities, rewards and motivations that have to be linked and reinforced through a well engineered and successfully executed process.  Actually if that process does not tie rewards to shareholder financial objectives, employ the proper mix of compensation elements, result in meaningful dollars, embrace performance that employees can impact and are effectively communicated and reinforced, then the results it produces will likely fall short (Vision Link Advisory Group, 2013).

2 3 Keshav kumar EE Pawan Garg EC, Prince kumar Teli E 1 2 3 kumarkeshavee@gmail.com pawangarg14690@gmail.com Princekumart9@gmail.com, Institute of Technology &Management, Bhilwara 1

Pay for performance is to link employees’ salary or salary increase to his or her performance. It seems to be a reasonable or attractive idea but it often does not work well in organizations. Please use at least 4 motivation theories or models to explain why pay for performance may not work as expected—particularly in government and nonprofit organizations.

Organizational health means profit; therefore, to gain profits organizations must secure and grow their competitive advantage. Competitive advantage is the means of strategically differentiating products and/or services an organization from its competitors, such as branding, customer base, product quality, reputation, leadership, organizational culture, innovation, intellectual property, patents, leadership, and customer or governmental relationships, to reduce and/or eliminate threats, such as substitution, buyer power, or new entry, and increase seller power (Ployhart, 2012; Ramesar, Koortzen, & Oosthuizen, 2009; Singh, 2009; Srivatvaa & Martinette, 2013). Consequently, rather it is innovation, product quality, leadership, relationships, or patents organizations cannot ignore the fact that human capital as the primary resource needed to sustain and grow their competitive advantage power (Ployhart, 2012; Ramesar, Koortzen, & Oosthuizen, 2009; Singh, 2009; Srivatvaa & Martinette, 2013).

Submitted by Arvind Verma Roll No. 27 Telecom Management and IT- II Symbiosis Institute of management Studies, Pune

Faiza Anwar, Sahaab Akbar, Uroosa Akhtar Khan Department of Management Sciences, The Islamia University of Bahawalpur, Pakistan.

Dr. Daniel J Penkar, Director, SB Patil Insitute Of Management Rajesh Kumar Agrawal, Asst. Professor, Sinhgad Institute of Business Administration and Computer Application

In the partial fulfillment of the requirement of Master of Business Administration (M.B.A.) Program (2002-2004) Hemchandracharya North Gujarat University, Patan.