Design of Advanced Remuneration and Performance Management Portfolio

This portfolio delves into advanced remuneration and performance management, examining various wage systems and performance models. It covers piece wage and time wage systems, including Halsey's premium plan, and explores the components of a performance management model, such as goal setting, performance reviews, and performance improvement strategies. The document emphasizes the importance of aligning remuneration with performance to enhance employee motivation and organizational effectiveness. It also highlights the role of performance reviews in employee development and the continuous improvement of business processes. Desklib provides access to this document along with a wealth of study resources and solved assignments.

REMUNERATION SYSTEM

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Contents
Part- A....................................................................................................................................................2
Remuneration system-..........................................................................................................................2
Piece wage rate system......................................................................................................................2
Time wage system.............................................................................................................................3
Halsey`s premium Plan......................................................................................................................3
Part- B....................................................................................................................................................4
Performance Management Model-.......................................................................................................4
Goal setting.......................................................................................................................................4
Performance review...........................................................................................................................5
Performance improvement.................................................................................................................5

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Part- A
Remuneration system-
The term remuneration is pay or compensation an employee receives returns for contributing
to organisation. The businesses can determine the remuneration system on the basis of the
business they are operating. The manufacturing firm can determine the payment of wage
system according to either performance or fixed time scheduled by the organisation.
Remuneration system is an element that affects the success of the organisation. There can be
no efficient way that can be applicable to all types of business. Every business set their own
remuneration system. Wages refers to the payment of rate hourly. Salary refers to payment of
rate on time basis either monthly or annually. In every organisation, tasks can be performed
only with the help of resources- machinery, plant and fund and most importantly manpower.
Employees use the resources to generate output.
Piece wage rate system
In this wage system, wage are paid on the basis of output rather than on the basis of time.
There should not be given any consideration to time taken. It should be more based on time
taken for a task to be done. A fixed rate on per manufactured unit is paid, operation
performed and job completion. Employees should be guaranteed alteast minimum wages
under piece wage rate system. In piece wage rate system-
 Wages are linked to the quantity produced. Wages are linked to the output of a
worker, the higher the output manufactured, same is the wage payment.
 More production is encouraged when wages are paid as per the piece wage system.
 More efficient workers try to put maximum efforts in order to increase the
productivity and also the wages.

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 The machines are put to maximum utilisation. Workers may not like keep the
machines free.
Time wage system
This is the oldest method of wage system. Time is the basis for calculating wages. The wages
are paid according to the time spent by workers, the output is not much concerned. In this
wage system, efficiency of the workers is not measured. The method gives no more benefits
to the workers. Rates are fixed in this system.
 As wage is not related to output, it becomes difficult for employees to determine
labour cost per unit. Production rate may get low. The responsibility lies only on
leaders and supervisors.
 The output remains same. Because of lack of enthusiasm in workers low production
and overhead expenses leads to higher production cost.
 Production planning and control becomes difficult because there is no proper relation
between wages and output.
Halsey`s premium Plan
The standard time for completion of job is fixed and after the rate per hour is determined. If
the time taken by the worker is more than standard time i.e. rate per hour is multiplied by
time taken for the job. The time wage is guaranteed even if the output of worker is below the
standard output. If the worker completes the work in less than the standard time, then worker
will be paid according to the actual time, i.e. time-rate plus the bonus is calculated on
particular percentage of time saved. The usual bonus share paid to the worker is multiplied to
the rate per hour by 50% of the time saved.

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Part- B
Performance Management Model-
Performance management is an understanding derived from human resource management.
There is no special model accepted for performance management. Performance management
includes deciding the plans and goals, measurement of the work done executed, feedback of
work completed results and Reward system is based on complete performance outcomes.
Performance is a process of continuous planning, identifying and judging the performance of
individuals and also managing the work done accordingly. Employee performance
management is the core concept which facilitates communication. Selecting the definition of
the goal to achieve includes mission, vision and key success related factors in relation to
earnings and performance appraisal system. Sometimes performance is misunderstood as
performance management system.
Goal setting
Goal setting theory refers setting of goals on specific performance. The quality and type of
goal set determines how well they will work. Individuals who set specific and difficult goals
performs better than who set low, easy and general goals. A clear and measurable task is
more achievable rather the task that is messed up. The most effective goals have proper time
deadline for completion. The challenging level of difficult task is in order to motivate the
employee and to perform effectively and efficiently. Committing and putting proper efforts to
meet the goal. Sharing the goal with a superior in order to make them aware. Goal theory is

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the label used in learning phase. Goals of learning is a key factor influencing the level of an
employee`s intrinsic motivation.
Performance review
Annual performance reviews are a key element of employee development. A performance
appraisal is also known as performance review. A performance evaluation is a development
discussion by which job performance of an employee is measured and evaluated. The
personnel method is the method of performance reviews helps in recording of accidents and
absenteeism. Most organisation consider unnecessary absenteeism as indicators of poor job
performance. Evaluation brings to collection of methods. Performance reviews can be an
effective tool for communication encouraging employee performance improvement.
Performance appraisal is an enforcing tool for communication with employees pertaining to
how employees satisfy their appraisal results.
Performance improvement
Performance improvement is a measurement of the output produced of a specified business
process and then modifying the process according to the requirement of improvement. To
increase the output, increase the effectiveness of the procedure and increase efficiency.
Performance improvement is organisational change in which manager takes actions to
improve the ability of the employees. The manager measures the current level of performance
and looks after the standards to be achieved during a period of time. The deviation between
the current performance and the standard performance need to be improved. Performance
improvement on individual level usually involves various methods like statistical quality
control. The primary objective of the organisational improvement involves the measurement
of customer satisfaction. Performance improvement is to grab the opportunity to see and
improve improvement zone. The main two ways of improving are- improving the measuring

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tool by using the performance platform more efficiently and by modifying the attribute
performance platform, which can give a level of desired output.