Compensation & Benefits: Person-Focused Pay System at Mitron Computers

This case study examines the implementation of a person-focused pay system at Mitron Computers, a company specializing in custom-built PCs. The company faces challenges related to inconsistent technician skills, shipment delays, and training incentives. The analysis explores the advantages and disadvantages of a person-focused pay system within Mitron's context, including potential improvements in job enrichment, worker flexibility, and potential drawbacks like increased labor costs and training disincentives. The study recommends that Holly Turner, tasked with redesigning the pay structure, should ensure the new system complements existing incentive schemes and maintain employee motivation while fostering skill development.

Running head: COMPENSATION AND BENEFIT
Compensation and Benefit
Name of Student
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Author Note

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Table of Contents
Case summary............................................................................................................................2
Case analysis..............................................................................................................................3
a. Advantages of person-focused pay system in Mitron.........................................................3
b. Disadvantages of person-focused pay system in Mitron....................................................4
Executive decisions....................................................................................................................5
c. Recommendation for Holly................................................................................................5
Bibliography...............................................................................................................................7

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Case summary
The success of Mitron Computers can be attributed to the technicians that exist in the
company. Mitron assists several offices by providing it with customer personal computers as
supply chains. The ability of the company to manufacture quality products keeping in mind
the required specifications provide Mitron with an advantage in the market. Despite this, the
company has experienced delays in shipments and this has been a cause of concern for the
branch manager.
In order to meet the demands of the customers seeking for computers, Mitron works
with the offices directly. The computers are designed specifically for the benefit of the
customers. The process of service provided by Mitron includes taking order from the
customers and tries to fulfill the sale within a specified period. Teams of technicians are
formulated so that the desired specifications of the computers are provided. The process is
considered a complex and the technicians need to be well skilled so that they can provide
assistance in providing the customers with quality computer products.
The issues faced in Mitron are that the technicians need to involve in 10-18 steps for
meeting computers specified by the customers. The skill and knowledge of the technicians
vary from people capable of completing the job in 2 days in contrast to people being unable
to understand the complexity. Therefore, people with the ability to complete the steps quickly
provide opportunity that is more flexible to the company. The steps involve delicate
procedures and it is important that the technicians take initiatives to learn and develop the
skills each day. However, in this regard another issue faced by the technicians is the less
amount of incentive received while training.

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Despite the fact the technicians work in teams, the mode of payment of salaries is
done using hourly pay method. Team bonus for each computer build without any defects are
provided. With a team being developed using specialist technicians, Mitron had issues
regarding completing steps that enable computers to work with one another. Such problems
are however limited as most technicians have a perfect solution to mitigate the issue. At the
same time, some people in fear of loosing time do not take training.
To determine the pay structure of the technicians, Mitron have appointed Holy Turner
to determine any requirement of changes in the pay structure. This is required so that the
efficiency of the technicians can improve. In the opinion of Holly, more steps can help in
increasing the efficiency of the employees. Hence, the aim of Holly is to create a person-
focused program so that the technicians can be paid based on the steps undertaken by them to
complete the manufacturing of computers. Holly believes in unity and the pay per step
method can drag employees to consider training so that they can get more salary. With the
increased number of training provided, the teams can be more organized and increase the
productivity.
Case analysis
a. Advantages of person-focused pay system in Mitron
According to Moore and Viscusi (2014), person-focused pay system can have certain
advantages that can help a company like Mitron to continue its prowess in the business
market. The advantages include:
It can provide the technicians of Mitron with job enrichment and job security. This
can help in enriching and motivating the employees to continue working in the company.

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Mitron can design tasks by combining tasks so that the employees can produce entire product
and services.
A second advantage that can be obtained by the implementation of the person-focused
pay system is that Mitron can increase the flexibility of the workers. This can help Mitron to
retain the services of the employees and provide them with the job security required for
remaining in the organisation. As stated by Hood, Hardy Jr and Simpson (2016) security of
the workers is an important aspect for being loyal to the companies.
Workers can perform a variety of jobs even during the time of lay-offs. Even during
the period of slow sales, the pay system can indulge the workers of Mitron to create and
innovate new systems so that the computers can be made as per the specifications provided
by the customers. At the same time, the technicians of involved in Mitron can indulge in
multi-tasking skills and help in increasing the production level of the company. Any sudden
increase in the staffing of the company can lead to increase in the normal inventory approach
of Mitron.
b. Disadvantages of person-focused pay system in Mitron
At the same time, person-focused pay system may have certain disadvantages as well.
These include:
Person-focused pay system may provide a drawback for the employees working in an
hourly pay. Therefore, any labour cost or training cost along with overhead costs can increase
and employees are not even compensated by it. According to Gupta and Shaw (2014),
training is an integral part of employees for the development. Therefore, employees spending
hours in the organisation may be dissatisfied with the fact that the hours spend in training are
not being compensated. Therefore, the employees of Mitron tend to shrug off any training
period that is provided to them.

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Other disadvantage that may arise from person-focused pay system is that it does not
complement the existing incentive pay system in a company. It has been seen that in Mitron,
the employees are provided with incentives and bonus based on the number of computers
sold accurately. Therefore, the implementation of the person-focused pay system can provide
confusion about the type of incentive that the technicians may receive. Hence, it may be
confusing for the people and at the same time provide a disadvantage for the employees
seeking to get proper compensation for the work done.
According to Dau-Schmidt, Finkin and Covington (2016), another disadvantage is the
fact that an effective training programme is required for the successful implementation of the
person-focused pay system. In the case of Mitron, due to the unequal distribution of salary,
the people shun the training system. Therefore, the application of the pay system cannot be
obtained without effective training mode.
Executive decisions
c. Recommendation for Holly
Hameed, Ramzan and Zubair (2014) are of the opinion that the application of
innovative methods of providing payment to employees can help gaining their loyalty and
improve the success rate of an organisation. In the case of Mitron, Holly needs to ensure that
the application of the person-focused pay system can help in the increase of skill based pay
program and maintain the skill levels of the people. The fact that person-focused pay system
is fitting for companies that indulge in manufacturing items provides Mitron with an
advantage of maintaining the loyalty of the employees.
Therefore, Holly needs to ensure that the person-focused pay system does not
interfere with the incentive scheme that Mitron has for the employees. The bonus provided

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can be kept as constant with different parameters such as increase of 2% sales rate every
month. This can motivate the employees to work hard and at the same time ensure that the
application of the person-focused pay system is welcomed properly in the organisation. Holly
can communicate this idea with the senior members of the company and hope to gain
approval for the same.

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Bibliography
Anitha, J. (2014). Determinants of employee engagement and their impact on employee
performance. International journal of productivity and performance
management, 63(3), 308.
Dau-Schmidt, K. G., Finkin, M., & Covington, R. (2016). Legal protection for the individual
employee. West Academic.
Gupta, N., & Shaw, J. D. (2014). Employee compensation: The neglected area of HRM
research. Human Resource Management Review, 24(1), 1-4.
Hameed, A., Ramzan, M., & Zubair, H. M. K. (2014). Impact of compensation on employee
performance. International Journal of Business and Social Science, 5(2).
Hood, J., Hardy Jr, B., & Simpson, L. (2016). Workers' compensation and employee
protection laws in a nutshell. West Academic.
Kristal, T. (2017). Who Gets and Who Gives Employer-Provided Benefits? Evidence from
Matched Employer-Employee Data. Social Forces, 96(1), 31-64.
Moore, M. J., & Viscusi, W. K. (2014). Compensation mechanisms for job risks: wages,
Workers' Compensation, and product liability (Vol. 1060). Princeton University
Press.
Strategic Compensation: A Human resource management approach,8th edition by Joseph J.
Martocchio