HRM 2600 Chapter Notes - Chapter 10: Merit Pay, Job Performance, Plans

• School: York University
• Department: Human Resources Management
• Course: HRM 2600
• Professor: Christa Wilkin

Document Summary

Variable pay tying pay to some measure of individual, group, or organizational performance. Incentive plans esta(cid:271)lish a pe(cid:396)fo(cid:396)(cid:373)a(cid:374)(cid:272)e (cid:862)th(cid:396)eshold(cid:863) to (cid:395)ualify fo(cid:396) i(cid:374)(cid:272)e(cid:374)ti(cid:448)e pay(cid:373)e(cid:374)ts. E(cid:374)a(cid:271)les e(cid:373)ployees to assu(cid:373)e (cid:862)o(cid:449)(cid:374)e(cid:396)ship(cid:863) of thei(cid:396) jo(cid:271)s, the(cid:396)e(cid:271)y i(cid:373)p(cid:396)o(cid:448)i(cid:374)g thei(cid:396) effo(cid:396)t a(cid:374)d overall job performance. Identify important organizational metrics that encourage employee behaviour. Establish a clear link between performance and payout. Emphasis (cid:373)ust (cid:271)e pla(cid:272)ed o(cid:374) the (cid:272)o(cid:373)pa(cid:374)y"s goal (cid:449)hi(cid:272)h a(cid:396)e (cid:272)o(cid:373)(cid:373)o(cid:374)ly (cid:395)uality, (cid:272)ost (cid:272)o(cid:374)t(cid:396)ol, or productivity. E(cid:373)ploye(cid:396)s (cid:373)ust gua(cid:396)d agai(cid:374)st (cid:862)(cid:396)at(cid:272)heti(cid:374)g up(cid:863) pe(cid:396)fo(cid:396)(cid:373)a(cid:374)(cid:272)e goals (cid:271)y (cid:272)o(cid:374)ti(cid:374)ually t(cid:396)yi(cid:374)g to exceed previous results as it leads to employee frustration. Annual incentive budgets are large enough to reward and reinforce exceptional performance. Employees have a desire for an incentive plan. Employees see a clear connection between the incentive payments they receive and their job performance. Employees are committed to meeting the standards. Payouts are a separate, distinct part of compensation. Straight piecework an incentive plan under which employees receive a certain rate for each unit produced.