What A Pay For Performance Compensation Policy - 1347 Words

Introduction All organizations must remunerate their employees for their time, effort, and contributions to that organization. How an organization chooses to structure their compensation system is a complex process, which requires a significantly more methodical decision-making process than simply picking an arbitrary hourly wage. There are a number of pay models that organizations can utilize to accomplish this objective, ranging from a simple salary and benefits package based on the job content of the position (Milkovich, Newman, Gerhart, 2016, p. 142) to a more complex structure that bases wages on the knowledge and skills an employee brings to a particular position (Milkovich, et al., p. 174). One of the more complex compensation plans is that of pay-for-performance. This paper sets out to define what a pay-for-performance compensation policy is and then will identify how the unique business strategies of an organization will affect how that policy is implemented. What is a Contribution or Pay-For-Performance Compensation Policy Pay-for -Performance is a form of compensation that relates to the contributions of individual employees (Milkovich, et al., p. 22). It is variable pay model that gives financial awards based on merit: an additional payment, within total compensation, an employee receives that is relative to their behavior and/or performance in certain areas (Milkovich, et al., p. 13). Pay-for-performance can take a number of forms, to include a percentageShow MoreRelatedAn Effective Compensation Structure Of Employees Essay1468 Words   |  6 Pagestime and resources in developing an effective compensation structure-one that is lawful, aligns with the strategy and objectives of the business itself, is externally competitive and can recruit and retain talented employees. However, not all positions will fall into this meticulously composed pay structure. There are groups of employees who will fall outside of the scale used for everyone else, with compensation packages seemingly at odds with what eve ryone else receives (Milkovich, Newman, GerhartRead MoreBusiness Rio Tinto Group Uk And Human Resource Practices1115 Words   |  5 Pagescountry cultures impact the business Rio Tinto Group UK and human resource practice of the MNE for RIO Tinto Group UK? Cultural Considerations Some of the most important objectives of HRM policy is to attract and keep the best talent and to provide strategies to motivate and improve staff performance. HR Managers are faced with many different cultures and not all cultures have the same intrinsic motivations. RIO Tinto has responded by seeking to embrace workplace diversity in order to achieveRead Moreassignment--1 Essay1644 Words   |  7 Pagesthe views of compensation? Answer: There are basically four perspectives in views of compensation. 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First we will look at performance-based-pay as a policy for recognizing employee contributions. Performance-based-pay is a pay plan that varies with some measure of individual or organizational performanceRead MoreReflective Summary Of Strategic HRM MHancock Essay965 Words   |  4 Pagesto assess the overall performance of The Cellular Store. This performance review is based on the performance management, retention, diversity management, and hiring. This evaluation pays a vital role in employee raises, promotions, and company growth. The objectives established for this year will push the company to higher levels, but still have that hometown feel. 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