Example Of Human Resource Management Essay

It is unfair to provide one employee lesser percentage increase in merit just because his compensation falls under the third quartile, and higher percentage increase to other employee just because his compensation falls under first quartile. Both kinds of employees should be provided similar increase irrespective of the fact that their pay belongs to different quartile. Both employees perform similar work hence their pay increase should be based on their performance and their outcomes.
The increase in pay generally get impacted by various factors such as education, experience, skills and job specific requirements possess by the employee. Employees with higher skills, experience and education, receive higher pay which also impacts their pay increase during performance appraisal process. As described in HRM, pay structure theory, a manager does not only depends on objective performance of the employees but also subjective performance in order to determine the merit increase and also increase in pay amount (Martocchio, 2012). Manager access employee’s performance on both objective and subjective performance indicators. Objective performance is evaluated at certain regular intervals against duties assigned to the employees.
Managers should establish performance goals for each employees according to their roles and responsibilities. It is important that goals are quantifiable and measurable. The performance evaluation of each employee should be based on the goals achieved by them. In case two employees are working on similar goals, their merit increase needs to be largely based their actual performance. Manager should also consider employee’s experience, education and values brought by them in the organization (Martocchio, 2012).
Different companies utilize different types of compensation plans for their sales staff, depending upon the nature of business, products they sell and target market. Each plan has its positive and negative aspects that sometimes leads sales professionals under ethical dilemmas. For example a commission only program may encourage sales professionals to adopt unethical practices in order to sale a product. A fixed salary plan may encourage sales professionals to show bad attitude and low level of interest in selling the products because poor performance will not impact their salary. Such behavior demotivates other staff, because some people get salary without deploying hard efforts, and others are working hard to get their salary (Martocchio, 2012).
In finance industry, companies often give unrealistic targets to their sales people which increases pressure on the sales teams to perform. In such situations, employees adopt unethical ways to increase the sales such as approving loans on false documents, or by taking commission. It is important that companies design their sales compensation plan keeping in mind the product they are selling in order to minimize ethical dilemmas. Companies should consider salary plus bonus or incentive plan to protect their sales staff from ethical dilemmas. In this plan employees receive their bonus based their performance which motivate employees to perform their best.
I believe that merit pay grids is an effective way to pay employees based on their performance and work that they do. It is important for the organizations to monitor employees’ performance and reward them according to their performance. Merit pay grids provide employees a reason to perform their best and to deploy their hard efforts. In absence of merit pay grids, employees will not bother to deliver their hundred percent because their pay is not going to get impacted by their performance. Employees will perform minimum work that is sufficient to prevent them from firing. Therefore merit pay grids motivate employees.

Reference

Martocchio, J. J. (2012). Strategic Compensation: A Human Resource Management Approach. USA: Pearson Education.