Recognizing Employee Contributions
Sunday, December 10, 2017
HRM 500- Human Resources Foundations
Recognizing Employee Contributions
the HR manager of a relatively new retail company that has both retail stores
and Internet sales. Your company is
steadily growing in revenue and profitability. The company realizes that in
order to retain the solid, highly productive workforce it currently has in
place, it is important to enhance the base compensation and benefits package
offered to the employees. The company currently offers a basic compensation
program and only federally mandated benefits. Employee surveys suggest the
compensation and benefits program may be out of date. Employees are beginning
to consider leaving the organization.
1.Propose two (2) methods an HR
professional could use to determine incentive pay. Specify the principal manner
in which the proposed methods take into consideration individual, group, and
company performance. Justify your response.
To be effective, rewards must be linked to employee
performance. Any incentive plans must also be customized to meet the unique
needs of everyone. Management must know what is important to its employees and
then provide incentives that are meaningful to them.
The work force today is not homogeneous. Each worker has
unique needs. A fair and equitable incentive system will customize rewards to
meet the variety of needs of a diverse work force.
Effective incentive plans must also be creative. Since
different needs motivate different people, the incentives must fulfill a
variety of needs. The trend is toward incentives that are not financial in
nature. For example, gift certificates, additional time off, dinners, and
sports equipment are being used more widely today. Plaques, certificates of
appreciation, and public recognition have also been used effectively to improve
motivation. A handwritten note from a superior in the organization doesn’t cost
the firm a thing, but it is extremely effective in reinforcing good work
Two ways that an HR professional can determine incentive pay
is through individual or pay for group performance. An individual incentive
such as merit pay is an increase in base pay to how successful an employee
performs his or her job. The merit increase is normally given based on an employee’s
having achieved some objective performance standard, although a superior’s
subjective evaluation of subordinate performance may play a large role in the
increase given. Merit raises can serve to motivate if employees perceive the
raise given to be related to the performance required to earn them.
Merit pay plans establish an effort performance and
performance reward link, if an employee’s effort leads to successful
performance, the employee is rewarded by the organization. In consideration to
group and company performance if the individual performs well, the reward is
granted regardless of how well others have performed their jobs or how well the
company, has done.
Pay for performance incentives such as gain sharing which is
a program which measures increases in productivity and effectiveness and
distributes a portion of each gain to employees. (Noel, p.379). With
gainsharing the organizations have determined that total quality may be best
achieved through effective teamwork. Gainsharing plans offer employees a cash
reward for meeting or exceeding goals based on the collaborative performance of
a team of employees. Unlike individual incentive plans gainsharing plan allows
the employees to know what needs to be done to achieve a payoff. The formula is
stated in objective terms and protected from management bias. Gainsharing also
encourages the employees to improve the company’s overall productivity.
2.Examine the core legal requirements
affecting employee benefits in today’s competitive environment. Determine the
legally mandated benefits that the company must currently offer to its
are often referred to as indirect compensation. Benefits are also included in
the total compensation package for an employee. Benefits are used to attract
employees and improve the satisfaction level of the workforce. There are both
required benefits and voluntary benefits that employers may offer. Some
voluntary benefits have become so popular that many employees feel they are
entitled to them. However, benefits that are not required by law are only
provided at the discretion of the employer. The required benefits an employer
must offer are as follows:
Social SecurityUnemployment compensationWorker’s compensationFMLAHealth care benefitsIt is common for employers to
provide certain benefits to their employees, many of which are subject to
strict rules under the Employee Retirement Income Security Act(ERISA), the
Internal Revenue Code, Antidiscrimination laws, and Accounting requirements. (2001,
The Regents of the University of California).
3.Recommend at least four (4) additional
benefits that the organization should consider providing to its employees.
Suggest at least three (3) important concepts that a company must consider when
designing benefit plans. Provide a rationale for your response.
With the world we live in today, job seekers are looking for
more than just salary when looking for a job or even thinking of leaving their
current position. Most people think of compensation in terms of salary alone.
But it is more than that it is all forms of financial returns and tangible
services and benefits employees receive as part of an employment relationship.
Its’s essential that the organization offer benefits that would be beneficial
to the employees of the company. Within
a retail organization they can offer discounts such as 50 percent off twice a
month for friends and family in addition to the normal 15 percent off daily
discount. They can offer educational assistance for employees who would like to
further their career in business or fashion. Today wellness programs are
becoming bigger and they are good to have because it allows the employees to
have access to helpful educational information.
4.Assess the efficiency of common techniques for effectively
communicating compensation and benefit plans to employees. Support your answer.
It is critical that organizations effectively and frequently
communicate the benefits package to employees. Employer’s use an array of
methods to communicate benefits to employees, such as the following:
In- house publications (employee handbooks
and organizational newsletters)Group meeting and training classesVideotapesBulletin boardsPayroll inserts/pay stub messagesSpecialty brochures
New employee intranet self-services have made
it easier and more accessible for employees to gain information about their
benefits plans, enroll in their plans of choice, change benefits coverage
without contacting an HR representative. When communicating employee benefits,
the best advice is to use multiple media techniques. Different employee groups
have different ways of learning and distinct preferences in how they prefer to
receive information. (Kleiman, p.282)
5.Suggest two (2) ethical risks of making
incentive pay a large portion of employees’ total compensation. Propose two (2)
recommendations for ways the company might mitigate or reduce these risks.
Incentive programs are used to promote and reward employees
for good performance. There are ethical issues that arise with a large portion
of the employee’s total compensation are based on incentives. With gainsharing
as an incentive some employees may feel that rewards are unfairly distributed.
Because this incentive plan is based not on the individual but the organization
potentially everyone has an opportunity to get rewarded without even performing
well. Another issue that can arise is executives not being honest about the
companies profit so that if affects the employee’s incentive.
Billikopf, G. (2001). Incentive Pay (Pay for Performance)
University of Califonia
Kleiman,L. (2000) Human Resources Management:a management
tool for competitive advantage
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright,
P. M. (2014). Fundamentals of Human Resources Management (5thed). New York, NY
Ogbonnaya, C. (2017) Research:
How Incentive Pay Affects Employee Engagement, Satisfaction, and Trust. Harvard