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Boosting Managerial Productivity through Profit Sharing

   

Added on  2019-10-30

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Running head: PERFORMANCE COMPENSATION MANAGEMENTPerformance compensation managementName of the student:Name of the University:Author note:
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1PERFORMANCE COMPENSATION MANAGEMENTTable of ContentsCase Study 1: When salaries aren’t secret.................................................................................2Question 3..................................................................................................................................2Question 4..................................................................................................................................3Case study 2: WrapItUp.............................................................................................................6Question 5..................................................................................................................................6Question 6..................................................................................................................................7Question 7..................................................................................................................................8Question 8..................................................................................................................................9References:...............................................................................................................................11
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2PERFORMANCE COMPENSATION MANAGEMENTCase Study 1: When salaries aren’t secret Question 3Pay openness policy refers to the human resource policy wherein the salaries of theorganizational employees are known to the others and is not kept confidential. A majority ofthe organizations across the world keep their payroll secret however a few dare to follow apay openness policy. There are several pros and cons of following a pay openness policy.When the organizations follow pay openness policy, the employees know the salaries of theirco- workers as well as their sub- ordinates and seniors. It becomes easier for theorganizational employees to evaluate the level of performance required to be delivered,which shall fetch them the desired amount of compensation. Pay openness policy encouragesthe organizational employees to work harder and improve their performance in order toobtain the desired compensation (Chamberlain 2015). The organizational employees becomewell- aware regarding the criterions according to which the other organizational employeesare paid. Initially, the policy encourages the organizational employees to improve theirperformance and later on it encourages the employees to increase their compensations. Thepay openness policy also encourages the employees to improve their performance byindicating towards a fair pay policy among the co- workers, which are directly related to theamount of compensation they receive. The pay openness policy ensures that there is a fair paypolicy within the organization, which indirectly encourages the organizational employees todevelop loyalty towards the organization . In spite of several advantages of pay opennesspolicy, there are several disadvantages of this policy. In case of disclosing the informationrelated to salary in an established organization, several issues arise if the salaries are notfairly divided among the employees. A majority of the individuals consider their salaryinformation to be their personal information and on the disclosure of such information, they
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3PERFORMANCE COMPENSATION MANAGEMENToften feel offended. Inequality in payment structure might demotivate the employees to workharder and improve their performance in case they learn that they have been paid lesser thantheir colleagues even after performing better than them. Therefore, it can be stated that payopenness policy without a proper salary policy might cause several troubles to anorganization. It is essential for the organizations to ensure that there exists a fair pay policywithin the organization before disclosing the salary information. Salary transparency gives aclear picture of the compensation decisions taken by the organizational managers and can bea powerful tool for either leading the organization towards success or completely devastatingan organization. Therefore, an organization must adopt an pay open policy on when there areno wage disparities within the organization and the organizational employees arecompensated on the basis of their performance.Question 4 I would not support Charlie’s idea to post and share salary information among theemployees as a pay openness policy has more disadvantages and involves more risks. Themajor concern is the performance of the employees, which can be improved by adoptingother human resource management techniques rather than following a pay openness policy.Information regarding salaries is considered to be personal and confidential informationregarding an employee and the employees do not feel comfortable when the details regardingtheir salaries are disclosed in public. In the case study, the organization did not have a perfectand fair wage policy and disclosing the information regarding the salaries of the employeeshave a greater chance of creating disputes and rifts among the employees. Wage disparitiesmight also lead to decrease in the morale of the organizational employees, which wouldindirectly affect the performance of the employees. The pay openness policy might encouragea few employees to improve their performances however; a majority of them might consider
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