Advanced Remuneration and Performance: O’Meara Electronics Company

This report discusses the critical analysis of remuneration systems and assessment of type of remuneration system for O’Meara Electronics Company. The recommended type of remuneration system for O’Meara is executive compensation or deferred compensation.

Running head: ADVANCED REMUNERATION AND PERFORMANCE
Advanced Remuneration and Performance: O’Meara Electronics Company
Name of the Student
Name of the University
Author’s Note:

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ADVANCED REMUNERATION AND PERFORMANCE
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Critical Analysis of Remuneration Systems..........................................................................2
Assessment of Type of Remuneration System for O’Meara Electronics Company..............5
Conclusion..................................................................................................................................6
Recommendation........................................................................................................................6
References..................................................................................................................................8

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Introduction
Remuneration is the compensation or payment that is being received for employment
and services. It eventually includes the base salary and any kind of bonus and other economic
benefit, which the employee or executive receives while employment (Bryson, Frick and
Simmons 2013). Remuneration even refers to the total compensation and the amount depends
on several factors like value of the employee to the organization, type of job, organizational
business model and many more. O’Meara Electronics has been operating for 20 years and in
2016 the President decided to change their existing remuneration strategies for the employees
since they were facing loss in the business.
Discussion
Critical Analysis of Remuneration Systems
According to Freund et al. 2015, remuneration system is one of the major and the
most significant requirements for employee motivation in any specific organization. It refers
to the monetary rewards, which the employee gets, however these rewards could eventually
take different forms. Few of the commissioned positions subsequently offer the base salary,
however others are majorly dependent on commission. Several positions of any organization
rely on these remuneration systems since their base pay does not fulfil the minimum wage.
The remuneration can come in the form of health insurance or any other. It is the number of
complementary advantages like pay and these are increasingly significant remuneration
systems. Remuneration system is the major part of reward management. The employees of
the respective organization may be paid bonuses at several times and for several reasons
(Cybinski and Windsor 2013). Few such bonuses are completely performance related,
whereas others are provided to the staff within the organization after their work as incentives.

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There are several types of remuneration systems present in any organization and
suitable for O’Meara Electronics Company and these are as follows:
i) Commission: Commissions can be referred to as the form of variable pay
remuneration for the services that being rendered or the products that are being sold. It is the
most common method for motivating as well as rewarding the sales person. The commissions
could even be designed for encouraging the specified sales behaviours (Hary, Rious and
Saguan 2016). This particular type of remuneration system is generally deployed in the
organizational framework on the sales incentive program that involves one and multiple
commission plans. The payments are being calculated with the help of a revenue percentage.
Since O’Meara Electronics Company comprises of sales person, it could be extremely
effective for them.
ii) Executive Compensation: This type of remuneration system is the significant
mixture of bonuses, salary and shares of call options over company stock, perquisites and
benefits and are configured for taking into account the government regulations, desires and
tax laws as well as the executive and rewards for employee performance (Goh and Gupta
2016). This would be effective for O’Meara as they are suffering from financial crisis and it
is required to change the remuneration strategy as per government and company rules.
iii) Compensation Methods: The third and another important and noteworthy
remuneration system is compensation method. These types of methods are being utilized for
various types of internet marketing like search engine marketing as well as display
advertising. The most popular and significant types of compensation methods include pay per
lead or pay per action, pay per call, pay per install and many more. This type of remuneration
system would be effective for O’Meara for marketing department.

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iv) Employee Stock Option: This type of remuneration system eventually refers to the
compensation contracts within an employee and an employer, which carries few features of
the financial options (Melis, Gaia and Carta 2015). This specific remuneration system can be
suitable for O’Meara Electronics Company, since the contract between the employee and
organizational management is required to be changed before changing the remuneration
strategies.
v) Employee Benefits: The employee benefits eventually involve several types of non
wage compensations that are being provided to the employees after adding salaries and
normal wages. The instances, in which any employee is exchanging wages for few other form
of benefit and it is referred to as the salary exchange arrangement. The most significant
examples of employee benefits include insurance, retirement benefits, reimbursement,
conveyancing, sick leave, profit sharing and specialized benefits.
vi) Wage: The wage can be referred to as the monetary compensation that is being
paid by the employer to the employee within the exchange to get work done (Ramskold and
Posner 2013). The payment could be calculated as the fixed amount for all the tasks
completed and this is based on the easily measured work done quantity. O’Meara Electronics
Company can include as the part of expense, which is being involved for running their
business.
vii) Salary: The salary is the basic form of payments from any employer to a specific
staff that might be specified within the contract of employment. This is being contrasted with
the piece wage and is being paid separately and not on a periodical basis. While running any
business, this salary could even be expressed as the expenses of retaining and acquiring
human resources to run the operation and is hence termed as salary expense or personnel
expenses.

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Assessment of Type of Remuneration System for O’Meara Electronics Company
The above mentioned remuneration systems could be extremely suitable for O’Meara
Company. As per Boeri, Lucifora and Murphy 2013, however, since they have to implement
any one remuneration system, the most appropriate remuneration system would be executive
compensation. This type of system is comprised of financial compensations and the non
financial rewards that are being received by any executive in the firm. As more than 1000
staff are working in this organization and in August 2016, the President decided to change
their existing remuneration management as well as performance management strategies,
executive compensation for the employees would be one of the most significant types of
remuneration for the business (Bertone, Lagarde and Witter 2016).
This particular remuneration system is the proper mixture of salaries and bonuses of
the overall organizational benefits and thus it is directly proportional to the organizational
profits. This refers to the fact when the organization is in profit, the employees would be
getting extra payment and when the organization will be in losses, and the employees will not
be enjoying incentives or remuneration under any circumstance (Bertone and Witter 2015).
Although, O’Meara Electronics Company always focuses on employee motivation, it is
required to maintain a proper balance between employee satisfaction and organizational
profit. If the organization will not be benefitted, it is evident that even the employees will be
in significant losses.
Jenkins and Pérez-Arriaga 2017 state that, the executive pay is the most significant
part of corporate governances and is hence determined by the organizational board of
directors. Since, David O’Meara is the President of this organization, it is evident that he will
be undertaking the major decisions related to remuneration strategies and performance
management strategies. Sarah Jones, the Director of HR on the other hand, has planned as
well as announced to the Melbourne staff that will an Executive Staff Forum regarding the

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new remuneration system. She has appointed Kurt as the consultant for organizing the all
staff forum for discussing the remuneration systems and also a separate forum for their
performance management.
Executive compensation can be extremely significant for this specific organization of
O’Meara Electronics Company since it can easily and promptly reduce the complexities of
staff remuneration and how to maintain a better balance of remuneration strategies and
organizational benefits. David O’Meara being the President of this organization, has put extra
emphasis on the remuneration system since it is responsible for bringing extra motivation to
the employees and they would get extra mental strength and satisfaction for putting their best
for the better advancement of O’Meara Electronics Company (Nankervis et al. 2016). Thus,
executive compensation would be the most suitable type of remuneration system for this
organization.
Conclusion
Therefore, it could be concluded that the remuneration system is extremely important
and significant for all organizations. It acts as major motivational factor for each and every
employee and ensures that that particular employee is getting paid as per his work. The
businesses could set up their own remuneration systems when they are complied with state
and federal laws. It generally goes without mentioning that the business should treat the
employees in an equal manner, irrespective of gender, race and any other issue. The above
provided report has properly described about the detailed research on remuneration system
for the organization of O’Meara Electronics Company.
Recommendation
The recommended type of remuneration system for O’Meara is executive
compensation or deferred compensation. This type of commission is recommended to this

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particular organization since they are suffering from major financial crisis and their market
position is declining majorly. Kurt, the consultant can easily involve executive compensation
within their business as it is composed of financial compensation and any other non financial
awards that could be received by any executive. It ensures that the employee providing
maximum input to the organization would be getting maximum benefit from his or her
company.

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References
Bertone, M.P. and Witter, S., 2015. The complex remuneration of human resources for health
in low-income settings: policy implications and a research agenda for designing effective
financial incentives. Human resources for health, 13(1), p.62.
Bertone, M.P., Lagarde, M. and Witter, S., 2016. Performance-based financing in the context
of the complex remuneration of health workers: findings from a mixed-method study in rural
Sierra Leone. BMC health services research, 16(1), p.286.
Boeri, T., Lucifora, C. and Murphy, K.J. eds., 2013. Executive remuneration and employee
performance-related pay: a transatlantic perspective. Oxford University Press.
Bryson, A., Frick, B. and Simmons, R., 2013. The returns to scarce talent: Footedness and
player remuneration in European soccer. Journal of Sports Economics, 14(6), pp.606-628.
Cybinski, P. and Windsor, C., 2013. Remuneration committee independence and CEO
remuneration for firm financial performance. Accounting Research Journal, 26(3), pp.197-
221.
Freund, T., Everett, C., Griffiths, P., Hudon, C., Naccarella, L. and Laurant, M., 2015. Skill
mix, roles and remuneration in the primary care workforce: who are the healthcare
professionals in the primary care teams across the world?. International journal of nursing
studies, 52(3), pp.727-743.
Goh, L. and Gupta, A., 2016. Remuneration of non-executive directors: Evidence from the
UK. The British Accounting Review, 48(3), pp.379-399.
Hary, N., Rious, V. and Saguan, M., 2016. The electricity generation adequacy problem:
Assessing dynamic effects of capacity remuneration mechanisms. Energy policy, 91, pp.113-
127.

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Jenkins, J.D. and Pérez-Arriaga, I.J., 2017. Improved regulatory approaches for the
remuneration of electricity distribution utilities with high penetrations of distributed energy
resources. The Energy Journal, 38(3), pp.63-91.
Melis, A., Gaia, S. and Carta, S., 2015. Directors' remuneration: A comparison of Italian and
UK non-financial listed firms' disclosure. The British Accounting Review, 47(1), pp.66-84.
Nankervis, A.R., Baird, M., Coffey, J. and Shields, J., 2016. Human resource management:
strategy and practice. Cengage AU.
Ramskold, L.A.H. and Posner, M.P., 2013. Commercial surrogacy: how provisions of
monetary remuneration and powers of international law can prevent exploitation of
gestational surrogates. Journal of medical ethics, 39(6), pp.397-402.