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ADVANCE REMUNERATION AND PERFORMANCE Student Name Institution Introduction Introduction Remuneration Systems

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Added on  2021-04-21

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Kelly and Cole (2011) define person based pay system as remuneration system involves rewarding or compensating employees based on their skills and qualifications.Position-based pay, on the other hand, refers to remuneration system where employees are rewarded based on their performance in the workplace. Firstly, personal knowledge as a driver for evaluating person-based compensation system focusesonpersonal educational background that leads to a qualification.Accordingto Milkovich and Newman (2010a, 2010), personal knowledge also touches on the training that can be attached

ADVANCE REMUNERATION AND PERFORMANCE Student Name Institution Introduction Introduction Remuneration Systems

   Added on 2021-04-21

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Running head: Advance Remuneration and Performance 1ADVANCE REMUNERATION AND PERFORMANCEStudent NameInstitution
ADVANCE REMUNERATION AND PERFORMANCE Student Name Institution Introduction Introduction Remuneration Systems_1
Advance Remuneration And Performance 2IntroductionRemuneration can be viewed as reward or compensation that one gets for work done orservice offered to an individual, organization or company. Remuneration or reward normallytakes the form of wages, salary or allowance tied to the service or work done. Therefore,remuneration systems can be explained in terms of elements used in determining the reward forthe employee. Some of the remuneration systems on the other include position, performance, andskills of employees at the workplace. Remuneration can be studied in terms of person-based pay or position-based pay systems.Kelly and Cole (2011) define person based pay system as remuneration system involvesrewarding or compensating employees based on their skills and qualifications. Position-basedpay, on the other hand, refers to remuneration system where employees are rewarded based ontheir performance in the workplace. As a human resource consultant for O’Meara ElectronicsCompany, understanding the remuneration system serves to identify or develop the alternativepay system for the company that is geared toward the restoration of the declining company’smarket position. Person-based remuneration systemPerson-based remuneration system is one of the currently available remuneration systemsthat help many organizations. Some of the important elements or drivers of the person basedremuneration system include skills, personal knowledge, and experience. Firstly, personalknowledge as a driver for evaluating person-based compensation system focuses on personaleducational background that leads to a qualification. According to Milkovich and Newman
ADVANCE REMUNERATION AND PERFORMANCE Student Name Institution Introduction Introduction Remuneration Systems_2
Advance Remuneration And Performance 3(2010a,), personal knowledge also touches on the training that can be attached to compensationof employees. Within person-based remuneration system, promotion is always based on the higheducation and improved training. Secondly, the experience is another element or driver ofcompensation that is directly concerned with employee’s experience in the work. Highlyexperienced employees are highly rewarded as compared to less experienced employees.Thirdly, skill is a central driver for person based remuneration system since it touches on otherdrivers or elements. Skills as a driver for person-based pay system revolve around factors such asabilities, acquiring new skills and specialization. These factors increase the skills of an individualemployee leading to higher compensation. There are many advantages and disadvantages ofperson-based remuneration system (Canavan 2008, pp18). Advantages of person-based remuneration include reduction of competition amongemployees, increase technological skills within the organization and increase in job enlargementwithin the organization. Firstly, person-based remuneration system reduces competition forpositions within the organization since personal qualification and skills are used for promotion.Secondly, Lewis and Podgursky (2013) explain that increase in training and education ofemployee used in compensation broadens the technological skills of employees leading to highexperience. Thirdly, there may job enlargement within O’Meara Electronics Company due to theusage of person-based remuneration system. The person-based remuneration system primarilyfocuses on skills and training that enlarge job capacity of employees (Zingheim & Schuster2009, pp 6). Disadvantages of person-based remuneration system include limited seniority ofemployees, reduced performance of employees, focuses on the person rather than the
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Advance Remuneration And Performance 4performance of the company. Firstly, there may reduce performance since there is an emphasison person’s knowledge. Companies such as O’Meara Electronics Company required highperformance though under person-based remuneration system more emphasis is on the personnot the output of that person. This may highly reduce the performance while the paymentremains the same (Milkovich, Newman and Gerhart 2010b). Secondly, in the person-based paysystem, the seniority is based on personal attributes such as education skills and knowledge andthis attracts promotion. Where there are limited skills and education there is limited seniorityhence poor organization structure. Thirdly, the person based remuneration is person-centered andmay lead to declining performance due to lack of personal commitment to the performance of theorganization. This may sacrifice the organization at the expense of the employee compensation(Ledford 2008). The position based remuneration systemPosition-based remuneration system is another remuneration system that also assists inrewarding employees in an organization. Position based remuneration involves evaluating theperformance of employees for compensation. As Gazioglu and Tansel (2014, pp 78-78)explains,person-based remuneration system has drivers such as performance, job done and behaviors atwork. Firstly, in similar scenario Weibel and Margit (2009, pp 390) explains the performance ofemployees within the organization that can be evaluated based on the number of products sold atthe particular time. Secondly, employee’s talent within the workplace that plays role in theperformance of employees determines the compensation of various categories of employees ofO’Meara Electronics Company. According to Mausner and Herzberg (2010), compensation andsubsequent promotion can also be set based on the self improvement of employees. Similarly,
ADVANCE REMUNERATION AND PERFORMANCE Student Name Institution Introduction Introduction Remuneration Systems_4

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