Advanced Remuneration and Performance
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Added on 2021-04-19
Advanced Remuneration and Performance
Added on 2021-04-19
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Running head: Advanced Remuneration and PerformanceAdvanced remuneration andperformanceStudent name:
Advanced Remuneration and Performance 1IntroductionThe word remuneration implies pay or compensation. Remuneration system can be definedas the system which directly affects the success of the organization. From the perspective oforganizations it is a much broader term as it also includes bonuses, commissions, otherpayments or rewards and benefits (Bratton & Gold, 2017). The purpose behind havingremuneration system is to attract the top talent. As by having a competitive remunerationplan, one can attract and retain the top talent towards the organization. Here in theO’Meara Electronics Company, the purpose behind new remuneration management is tohave participative approach which implies the involvement of everybody in theorganization. The company also want to shift from position based to person based system toretain the actual capable staff.Position based remuneration systemPosition based remuneration system involves the structure of positions in which roles andfunctions is to be defined in the organization, at the time of providing the ability to associateemployees to particular positions. In position based system the position of the applicantsitself become the point of determining base pay. It can be further explained as thetraditional remuneration structure in which jobs are slotted into salary scales (Morris &Venkatesh, 2010).The organization can track all of the weak spots in the organization by using informationrelated to defined position. The employees log in and out of the position but theinformation remains as it is (constant). Under this system salary for a job is decided on thebasis of its responsibilities. It has many advantages such as hierarchical organizationalstructure, generates the possibilities and paths for promotions. As compare to person basedsystem, it is much simpler as the person based system involves more work to defineknowledge, skills and competencies. Most of the companies would like to have positionbased structures. It also has some disadvantages such as it is less suitable for team basedstructures and incentives. The person on the job may not be capable for it. It generates thecompromise of honesty in job descriptions and job valuations.Person based remuneration system
Advanced Remuneration and Performance 2Person based structure can be defined as the structure which needs proper understandingof the task and responsibilities of the jobs. To develop the person based structure onerequires to know the job analysis and job descriptions. In person based remunerationsystem, salary and pay is to be decided on the basis of person’s knowledge not on the basisof position. The difference between both the systems is that; in person based system, theorganization compensates the employees on the basis of their knowledge, skills andcompetencies. In position based, they compensate the employees on the basis of theirprevious positions (job position) (Bernsten, Andersson, Gariepy, & Simoens, 2010). It hasmany advantages such as it plays the role of an incentive for self-development. It alsoprovides security to the employees by enhancing their skills. It reduces the need ofpromotion. It also has some disadvantages such as it reduces the possibilities and paths forpromotions. It reduces the level of motivation for the employees as there is no scope left forgrowth.Elements of different remuneration systemBasic salaryBasic salary can be defined as the amount to be paid to the employees after adding ordeducting any extra amount. Deductions such as any extra leaves and salary sacrificeschemes and additions such as bonus, overtime, incentives and allowances.CommissionCommission can be explained as the payment given to the employees for rendering andselling the goods and services to the consumers. The payment can be calculated on the basisof the percentage of the sold goods and rendered services. CompensationCompensation can be explained as the amount of pay which is to be provided to theemployees in return of some work or performance required. The pay can be in monetary ornon-monetary terms. It can be further explained as the combination of the worth of thepay, bonuses, health insurance, vacation and any other incentive received by the employees
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