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Organizational Remuneration Plan
The Virgin Blue is a midsize pharmaceutical company with fifteen employees. The company has three departments, which are the store, administration, and sales. Each department has five employees. The company currently uses the hybrid piecework-commission compensation scheme to allocate remuneration packages to its employees. This scheme works by setting salaries and other remuneration packages for each employee on the basis of a preset rate and a percentage of output upon meeting the set targets (Harrison & Wicks, 2013). This company’s compensation plan accommodates a series of commissions for meeting targets, which are set on a monthly basis. Through proactive focus performance management, the company has been able to create clear performance and goal appraisals that are interconnected to remuneration. Although the scheme has been effective in promoting performance efficiency, it lacks motivational elements such as rewards for overtime, even when employees work for more than eight hours.
Improvements to Change Employee Behavior
The current compensation scheme could be modified to integrate a continuous positive feedback channel that offers systematic training skills to ensure that the employees’ special talents are rewarded through monetary gains (Obeidat, Masadeh, & Abdallah, 2014). This proposal will ensure that there is an improved level of effectiveness in the soft skills among the employees through incorporation of a flexible and dynamic compensatory value attachment that can inspire confidence and motivation for optimal output. Moreover, the proposal may be ideal in promoting and appealing to the financial health of the employees in a sustainable manner (Sostrin, 2013).
For example, the current scheme could be modified to include financial rewards for overtime, which is currently lacking. As a result, employees will be empowered and feel valued by the company that rewards service beyond the usual working hours. The overtime remuneration could be set at double the hourly salary of the normal working hours. The empowerment will eventually unleash motivation and energized commitment to work beyond the official company hours with the aim of earning extra income. In the work environment, energy and motivation function simultaneously to improve on employee productivity (Suma & Lesha, 2013). When the proposed overtime payment is internalized in the current remuneration plan, employees will not only develop a positive attitude towards their work, but also improve on output because of longer working hours that attract double benefits.
Modifying the Compensation Plan to Affect Desired Change
Apart from the overtime option, the other alternative would be the introduction of an employee of the month benefit. This plan has the benefit of motivating the employees to work hard in order to get the monthly package. However, this option would limit the reward to just a single employee. The current scheme can be modified to affect the desired change behavior through the introduction of the daily overtime reward as part of the compensation plan to improve on the benefits of each employee (Wilkinson, Redman, & Dundon, 2017). As captured in table 1, this could be done through the use of a service-for-service approach involving the introduction of a fringe benefit package.
The overtime package can be replicated in other departments. This proposed change has the benefit of motivating employees to develop positive attitudes towards long hours of work because of the reward attached. However, if unregulated the overtime plan might result in reduced quality of employee output as a result of fatigue (Vanhala & Stavrou, 2013). That is why the maximum overtime was set at three hours.
References
Harrison, J., & Wicks, A. (2013). Stakeholder theory, value, and firm performance. Business Ethics Quarterly, 23(1), 97-124.
Obeidat, Y., Masadeh, R., & Abdallah, B. (2014). The relationships among human resource management practices, organizational commitment, and knowledge management processes: A structural equation modelling approach. International Journal of Business and Management, 9(3), 9-26.
Sostrin, J. (2013). Beyond the job description: How managers and employees can navigate the true demands of the job. New York, NY: Palgrave Macmillan.
Suma, S., & Lesha, J. (2013). Job satisfaction and organizational commitment: The case of Shkodra municipality. European Scientific Journal, 9(17), 41-52.
Vanhala, S., & Stavrou, E. (2013). Human resource management practices and the HRM-performance link in public and private sector organizations in three Western societal clusters. Baltic Journal of Management, 8(4), 416-437.
Wilkinson, A., Redman, T., & Dundon, T. (2017). Contemporary human resource management: Text and cases (5th ed.). London, UK: Pearson.
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