Advanced Remuneration and Performance Analysis for O'Meara Electronics

This report critically analyzes the remuneration structures of the O’Meara Electronics Company, focusing on the shift from a position-based to a performance-based system. The analysis explores the impact of different remuneration strategies on employee motivation, productivity, and overall company performance. The report examines the advantages and disadvantages of both position-based and performance-based remuneration models, considering factors such as employee satisfaction, competition, and the alignment of incentives with company goals. The case study highlights the challenges faced by O'Meara Electronics in implementing a new remuneration system and provides recommendations for improving employee engagement and driving business growth. The report emphasizes the importance of clear communication, training, and a balanced approach to remuneration to ensure the success of any compensation strategy. The analysis draws upon relevant literature and provides practical insights for organizations seeking to optimize their remuneration practices.

Running head: ADAVNCED REMUNERATION AND PERFORMANCE
Advanced Remuneration and Performance
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1ADAVNCED REMUNERATION AND PERFORMANCE
Introduction
Remunerations are a part of salary where an individual gets bonus, benefits, extra
allowances added in their salary account as an incentive for their performance in the industry.
This is not considered as a donation or giving away. These are compensations or rewards for
motivating and attracting the employees for their efficiency and to be loyal to the organisation
they are working for. A good remuneration structure is essential to drive more output and profits
for the sale of products (Braendle 2015). As more employees are attracted towards the
remuneration structure, they work hard to deliver the fruitful results in order to acquire the
benefits. Understanding the remuneration structure of businesses are required to analyse their
growth pattern.
The O’Meara Electronics Company is an Australian Company that has great market
power. However, in the past few years, the revenues went down as a result of improper
management techniques. As a result, new remuneration system is adopted to raise the sale and
the profits significantly. The aim of this paper is to critically analyse about the remuneration
structures of the O’Meara Electronics Company that has prospered the profit margins of the
company (Stachova, Stacho and Bartáková 2015).
O’Meara Electronics Company
The O’Meara Electronics Company has been established 20 years ago for providing the
electronic products and services in the general electronic industry. It supplies telephones,
televisions, audio players, digital cameras and other electronic goods. It has a large market share
in Australia with subsidies in more than four countries (Perez et al. 2016). The firm operates
with electronic engineers, technicians and semi-automated factory workers and has over 1000

2ADAVNCED REMUNERATION AND PERFORMANCE
employees working in the system and comprises of 10 teams. The profits are seen to decline and
the obvious reasons are the weak management and operational systems. In order to solve the
problem, the President of the company has planned to organize a new remuneration system that
would enhance the performance level of the employees as well of the company. The aim was to
change the pattern in which workers work and regain a quality work culture that would expand
the business in European countries.
The role of a good remunerations system
Every organisation has a different way of paying their employees. The structure of salary
and bonuses are not same in all companies. Remuneration must not be confused with salaries,
although it is a part of the payment structure. These factors have a strong impact on the
efficiency and outputs delivered at a given time (Shin and Konrad 2017). It is the employees who
make up the organisation. It is important to keep them motivated so that they feel inspired to
work, improve themselves and raise the productivity per person. These remunerations fall under
two categories- person based and performance based remuneration.
A company often adheres to performance based remuneration system for long-term
successes. Few companies opt for both types of remunerations. Some incentives are performance
based while the rest are dependent on the position, irrespective of their work and production.
Employees need to have a positive mind-set towards risky tasks (Terera et al. 2015). There are
certain rules and responsibilities for getting the incentives. They are not provided to everyone,
which improves the competition among the employees as each try to bring out their best effort.
Previously, O’Meara Electronics was operating with position-based remuneration system
and according to the president this structure has cut down their profits. The director Sarah Jones,

3ADAVNCED REMUNERATION AND PERFORMANCE
then appealed for shifting their scheme into performance based scale to meet up with the high
sales target. However in certain meetings, it was told that the performance based remuneration
has been inefficient to deliver fruitful results and has lowered employee satisfaction and
productivity. Thus, O’Meara Electronics Company has to understand and talk about the issues
with the labours (Shooshtarian, Ameli and Amini Lari 2013).
Position based remuneration
These type of remunerations are provided to the people in accordance with the position
and experience measured in years. It is the most common traditional structure of payment.
Employees who have worked in a specific field for few years have already acquired a special
skill in that particular area and so that person is paid more. Position based schemes gives the
benefits to senior employees and are paid according to their lent of service (Zogaj, Bretschneider
and Leimeister 2014). The structure is creative with the motive that an employee becomes more
valuable with time.
After every year, the employee gets a promoted to some higher level for specialization in
their designation which leads to an increment in their salary. They get quarterly bonuses and
awards even when their teams comprising of junior employees performs well. Employees are
encouraged to work hard and be loyal to the organization for reaching the organizational ranks.
Although in few instances, the senior workers are unable to do a particular task and is solved by
the junior employees. However, the seniors get the high pay scale, while junior workers get
demotivated for such offences (Türk 2016).
Person based remuneration

4ADAVNCED REMUNERATION AND PERFORMANCE
Person-based remuneration strategies are related to the skilfulness, knowledge and
productivity of the employee (Noe 2017). These are given as rewards for doing something new
and innovative in the system. The workers set new targets, gained trust of the customers with the
service, eager to learn new things. The management teams continuously change their scheme of
benefits so that workers does not get bored with the same benefits and incentive structures.
Employees get satisfied with these remunerations because it gives them a chance to showcase
their talent and get a good image in the organisation whether the person is in a senior or junior
position. It justifies the hard work of the efficient labours without any partiality towards the old
employees (Plancke 2015).
Case study of O’Meara Electronics Company
The performance of the company is related to the customers and the number of contracts.
Individual performance is not measured effectively which has led to fall in marginal revenues.
Also, performance of an individual is not estimated while giving the final report and employees
are unable to understand their roles in the company, whether they have improved or not. First of
all, the company needs to build proper management tools which will automatically identify the
areas that require assistance. The human resource department has to analyse the performance of
the workers every week (Lišková and Tomšík 2013).
From the very beginning, the company did not adopt any methods or policies in the
human resource management to enhance the quality of the staff members. The workers are
accustomed to a monotonous cycle and are resistant to changes that interrupts with their routine.
They stay in their current comfort zone and have no idea about performance based policies. So,
when such a policy as opted, the workers responded negatively as the managers discussed about
shifting the remuneration structure (Shields et al. 2015).

5ADAVNCED REMUNERATION AND PERFORMANCE
The company has retrieved its profits by working in a position related remuneration for a
long time and did not get any exposure from the challenges faced in performance related
remunerations. The previous system has not been useful enough to raise the revenues to a huge
extent and has remained static. The business environment is continuously changing and firms are
adapting new strategies every day to raise the efficiency level. Under such circumstances, a
position related approach leads to rise in discrepancies when employees get good opportunities
in other companies. Such less development opportunities demotivates the workers and needs
time for adapting themselves to the change in order to stay in a good position in the market.
These schemes continuously enhance the working culture in respective business.
The company is recommended to discuss and talk about the new scheme with the staff
members so that they do not have any doubts. The company must see to it that the workers are
satisfied and agrees to the new opportunities. Such issues had huge effects on the human
resource management teams and brought down the productivity level of the overall organisation.
The manager has already announced about the declining profits. The management team itself
was not properly organised to showcase the problems in the system and sustain the long-run
profits.They changed the human resource consultant who set new rules and strategies to bring
out the growth in business.
Most of the performance is related to the customers and the way they are contracted.
O’Meara Company further responded by creating a new structure where the management teams
tracked the performance of the employees after in terms of the way they managed their
customers and handled the situations by an ad hoc measure. The firm has always worked for the
people and responded to the demands of the customers (Stachova, Stacho and Bartáková 2015).
The outcomes are to be ranked accordingly. This policy was at first opposed by the old

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employees because they were getting most of the benefits. A performance or person based
scheme increases the probability of benefits for the new employees as they are freshly hired and
are eager to acquire knowledge (Gupta and Shaw 2014). This lowered the benefits and rewards
for the senior employees. Complaints emerged both from the senior and junior workers that they
do not work together. There are no sessions or programs arranged for the employees or
supervisions for walking towards the steps of success. One of the disadvantages is that there is
no goal by the supervisors and the employees work in a monotonous way on a daily basis.
Conclusion
Remunerations are important to determine the level of productivity inside any
organisation. A good remuneration structure motivates the employees to be skilful and loyal to
the work they are doing. It is related to the salary; though not directly. The person based policy
of remuneration is effective than the position based system because it increases the efficiency
and productivity of the workers without any promotion. This might lead to over competition
among the employees and few of them would be demotivated to work further.
The O’Meara Electronics Company changed its position based system to the performance
based system. However, the company was unable to show any rise in the profitability. This was
because the new policy was negatively seen by the overall staff and executives. The employees
chose the comfort zone and refrained from any change. The policy and the benefit structure was
not clear to most of the workers. This reflected in a series of complaints. The management team
was not efficient enough to coordinate the senior, junior employees and understand what is
leading to such low performance. The company is recommended to keep both the remuneration
structures.

7ADAVNCED REMUNERATION AND PERFORMANCE
The performance based system must be effective enough to drive more sales. Training
and development has to be given on how to keep the contract of customers. Policies must be
opted in such a way there is a good relationship among the junior and senior staffs. Management
team must cordially look after the problems of the employees and arrange frequent meetings with
the workers. Thus, performance-based remuneration is effective when the rules are clear to the
employees and they are encouraged to collect the incentives and benefits.

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