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Remuneration System Assignment

   

Added on  2019-10-31

9 Pages2556 Words255 Views
Running head: REMUNERATION SYSTEMREMUNERATION SYSTEMName of the StudentName of the UniversityAuthor Note

1REMUNERATION SYSTEMIntroductionAccording to Armstrong & Murlis (2007)remuneration means a pay or bonus that isgiven to an employee and is exclusive of the basic salary of the individual. It is thecompensation or extra benefits that an employee receives due to good performance andcontribution to the organization. Every organization have their own remuneration systemwhich should always be in compliance with the federal and state laws (Smith, 2010). It is thejob of every organization that they treat each one of their employees in the same mannerirrespective of their colour, creed and race. Every employee is entitled to a certainremuneration because of the contribution that he or she gives to the organization and this alsoincreases the working performance in the employees (Gabčanová, 2011). In the case ofO’Meara Electronics Company, the system of remuneration that had been followed sincetheir inception was the position-based remuneration system which was not found to beeffective for their organization. This essay will highlight the different remuneration systemsand elucidate on the perfect remuneration system for the organization which will be chosenby a consultant that had been hired by them. The further paragraphs will analyse the position-based and person-based remuneration system and shed light on the recommendations of theconsultant about chosen remuneration system.Analysis of position-based and person-based remuneration systemsPosition-based remuneration system is focused on the responsibilities that comes withthe position of an employee and the tasks that needs to be performed to fulfil thoseresponsibilities (Shields et al., 2015). This kind of remuneration system is very common isevery organization since many years and this is used for all of those employees who are in thesame position. An extensive analysis of the job is performed and all the duties andresponsibilities of the employee is segregated into different categories and then various tasks

2REMUNERATION SYSTEMare assigned under those categories which needs to be fulfilled by the employee. In thissystem the remuneration is decided according to the responsibilities that the employee needsto perform and the working conditions of the employee as well (Main et al., 2008). Theadvantages of this kind of system is that is first of all based on hierarch, seniority andspecialization. The system depends on the knowledge base, experience and the expertise ofthe person in the position that he is working in. Position-based remuneration system alsomotivates the employees into putting more effort in their tasks so that they can climb theorganizational ladder faster. As the position changes, so does the remuneration. Hence, themore an employee can increase his job performance, the more he will be paid. This system iseasier to analyse and evaluate as it just concentrates on position of the person and decides thepay according to that. However, there are also many disadvantages to this system. Since thissystem is based on hierarchy, it can create issues when an organization formulates any teamstructure (Westacott, 2010). There can be conflict within the team if the members are ofdifferent position in the organization. It can also happen that an employee with a juniorposition than other is more deserving but receives less remuneration that his senior. Thiscould be cause for demotivation and unwillingness to work. This also stops people fromdeveloping themselves as they realise that their present competency would be enough to stayin the position. On the contrary, person-based remuneration system takes into account theperformance of each individual employee (Daley, 2012). He pay is decided on the skills andabilities of each employee separately irrespective of the position that he is appointed in. Thishelps the employees to get the pay that he deserves and the amount of productivity that hegives to the organization. The pay is not decided according to the duties and responsibilitiesof the position that he is working in but according to the skills that he uses for acquiring theobjectives that he has set. Having a good skill is very important for the employee in a person-based remuneration system, as the only way to climb up in the organization is to continually

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