WDW101Y1 Study Guide - Final Guide: Employee Stock Ownership Plan, Disability Insurance, Profit Sharing
25 Mar 2016
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Document Summary
Cola- cost of living adjustment : in the union agreements where wages are automatically increased depending upon increases in the cpi the risk to individual pay for performance plans. Do only what you get paid for- the more pay is tied to particular performance indicators, the more employees will focus on those indicators and neglect others. Negative effect on cooperation- conflict and competition. Factors beyond employees" control eg. working conditions, support from management, poor sales territory. Difficulties measuring performance- accurate measures of performance are not easy to achieve and typing pay to inaccurate measures is likely to create problems. Psychological contract- set of expectations- very resistant to change- breaking contract can have negative results- hard to change the plan even when conditions change and require a change in contract. Credibility gap- 75% of employees question the integrity of pay for performance plans- especially merit system that require judgement from superior.
