Reference no: EM133973447

Assignment - Design a Performance Pay Framework

This assignment relates to the following Course Learning Requirements:

CLR1 - Assess and apply both the internal and external environments of an organization to an employee compensation system

CLR2 - Identify and communicate theoretical approaches and strategies to the design of an employee compensation system

CLR5 - Explain how to manage compensation systems

Objective of this Assignment: To demonstrate knowledge and understanding of the design and implementation of performance pay systems while ensuring that perceptions and realities about transparency, fairness and sustainability are considered.

For this assignment, read the following scenario:

For more than 10 years you have been a human resources manager at a recently-unionized tool manufacturing company. Your company is home to more than 50 employees, ranging from machinists to metal fabricators, to accounting and inventory clerks. Your firm has built a reputation of quality, and the relationships of your long-time employee team with customers are a key pillar of your client service strategy, as well as the willingness of most clients to pay above market norms for your products. Simply put, your products are high-quality, your team is solid, and so is your reputation. Everyone at the company has the same benefits package and it seems to be "ok" however no one has ever checked how their benefits compare to other firms or how employees feel about their benefits. Many employee have been with the company for a long time and are aging. Workforce demographics must be considered now and for the future and this may affect your compensation strategy. Given the recent unionization of your workforce, you are formalizing processes, and systems and you recently conducted an inventory of compensation system considerations, and have since successfully chosen a compensation system. You have also established an aligned pay system to market positions with your new collective agreement, which includes provision for performance pay for unionized workers.

Unfortunately, your management staff are now without a performance pay framework, and you must remedy this in order to retain team engagement and equity. Your team will propose a performance pay plan for the seven managers and bring it forward to your colleagues through the discussion forum.

For discussion:

On the discussion forum, propose a compensation system for managers that is transparent, open and metrics-based. Link the process to performance evaluation and explain how your firm will balance the administrative pay process with other demands to maintain relative equity and team engagement. Provide five reasons that you believe it will work, citing your learning so far.