HRM533 assignment #4 Utley edited 1
HRM533 assignment #4 Utley edited 1
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Date Created: 11/09/15
1 Running head: ASSIGNMENT: 4 UTLEY FOOD MARKETS Utley Food Markets By Rhonda Stanley A Paper Presented in Fulfillment of the Requirements for HRM 533 Total Rewards Dr. Grace M. Endres May 23, 2011 2 ABSTRACT Pay for performance is a reward system that compensates employees of an organization based on measures of quality and efficiency in their work. The work environment at an organization should be analyzed to see if it would benefit from a new rewards system before implementing a pay for performance system. Implementing a new system would require an organization to look at how a new system would affect management and how would it affect the existing system? Therefore, organization decision makers should carefully consider their design options and be aware of potential advantages and disadvantages. To aid organization decision makers with these important decisions, all department heads, senior management, and the human resources department should meet and decide who should be covered, what should be rewarded, how to reward employees, and make sure integrity is maintained within the pay system. 3 1. The new Utley management would like to establish a pay for performance system. What does this mean to the Utley management ? Pay for performance at Utley Foods would mean that management has performed an analysis and determined a pay for performance reward system is more beneficial to the organization and the employees. The organization has to decide what types of performances to reward and how performances will be measured? Management will have to decide if pay for performance is to be monetary or nonmonetary such as benefits. In a pay for performance system the individual that generates the maximum output is rewarded. This is true in production industries but Utley is in the service industry. Todays businesses are recognizing that not only quality of work should be measured but safety, team work and ethical roles should have standards. Utley Foods management needs to carefully design a rewards system that is in alignment with the organizational goals and decide how the organization plans on motivating its current staff to meet the organizational goals of the company. Once the organizational goals are met, Utley has to develop a plan on how to measure performance and what incentives will be given. A pay for performance would be effective for Utley employees if the new plan entailed: a) Establishing a culture that would support pay for performance. b) Effective and fair supervisors. c) A rigorous performance evaluation system. d) A system of checks and balances to ensure fairness. 4 e) Communication and training for employees and supervisors. f) Sufficient funding The supervisors at Utley aren’t well trained and need to be taught how to design and develop a pay for performance system and measures. The new system should have the following: a) Employee feedback which Utley currently doesn’t have. b) Goals and measures should be distinctive, reasonable, and usable. c) Employees should participate in the performance evaluation process and all results should be confidential d) Performances should be evaluated fairly. e) The system should be evaluated and modified regularly. Utley’s pay for performance system can only be effective if the employees value the pay that the organization is offering in return for high performance, employees must understand what is required of them, they have to believe that they can achieve the desired level of performance, and believe that the organization will really recognize and reward that performance. A pay for performance system for Utley’s management means that management will have to spend money, time, and effort to make the new system successful. Management will have to spend time training supervisors in designing performance measures and how to provide performance feedback. The training will have to help supervisor know the difference in the levels of performance and give them guidelines to decide pay increases and bonuses. The system should also point out weaknesses for supervisors so they know 5 where improvement is needed. Management should choose supervisors based on skills, education, and potential. The supervisors should be able to use good judgment when performing an employee evaluation and a level of trust should exist between employees and supervisor. Supervisors should be able to perform their duties with integrity and . should be held accountable for how they perform and handle their responsibilities. According to the U.S. Merit System Protection Board these are the key decision points to consider when wanting to design a pay for performance system. 1. Is the agency ready for pay for performance? The organizational culture supports pay for performance Management is committed to changing the culture 2. What are the goals of pay for performance? Improved recruitment and/or retention Increased individual and/or organizational performance Greater fairness in pay 3. Who should be paid for performance? All employees Frontline employees Toplevel managers 4. What should be the timing for implementing pay for performance? Wholesale Stages 5. What should be rewarded? Individual, team, and/or organizational achievements Shortterm and/or longterm goals Efforts vs. outcomes when external constraints exist 6. How should employees be rewarded? Onetime cash bonus Increase to base pay Combination, such as control points 7. How much pay should be contingent upon performance? Less than 5 percent 6 Approximately 30 percent 8. How should performancebased pay be funded? Existing funding (e.g., general increases, withingrade increases) Additional funding 9. How can costs be managed? Forced distribution Reward only top performers (as a percentage of the workforce) 10. Who makes pay decisions? Firstlevel supervisor Secondlevel supervisor 11. Who provides input on the performance ratings? Firstlevel supervisor Second or higherlevel managers 12. How can agencies facilitate pay system integrity? Improved performance evaluation process Supervisor and employee training 2. What changes will have to be made in the way the system operates now? Utley Foods would have to make major changes in the way things are managed. First they need to clear the air of distrust and apprehension. Utley needs to establish a relationship of loyalty, faith, and trust with its employees. This improved relationship can start by agreeing to meet with the union members explaining to them how the changed environment is going to work in the favor of both management and employees. Also, Utley can develop its organizational culture of mutual trust by establishing open two way communication between the union and management. Utley can develop a clear technique for recruitment, selection, and of performance appraisal. The union needs to be involved and taken into confidence by explaining how benefits would be an advantage to all the members of union in working together for the benefits of the organization as a 7 whole and not just for the management. Utley needs an objective method to appraise every individual performance, replacing the present method of just one form filled up by supervisor. The method of evaluation should include an objective measure such as customer handling for sales employees. There should be a common agreement between all the employees union and nonunion and the management as to what would constitute as value additions. The measures of performance should be clear to every employee. There should be regular meetings between employees and supervisor to assess where individuals are in performance, what they should be heading towards, where they should be going in the future, and what corrective measures needs to be taken by the employee if any. Training for both the supervisor and the union and nonunion employees is a must and Utley’s should contract with an outside agency specializing in HR training. Lastly employees should be able to respond to unsatisfactory or poor ratings and they should be made aware when a poor rating is received. No employee will receive a raise because of his/her dissatisfaction. 3. How might these changes be implemented? Utley needs to make sure the organization is ready for a pay for performance system by conducting an analysis of the company first and getting the input of employees, supervisors, management, HR, and the union. Utley should implement this new system in stages. The stage could start with a particular department such as customer service and this department can be used as a pilot test and then spread to other departments once the system is proven effective. By using one department as a test, the organization can fine 8 tune the system and work through any problems that could lead to its down fall. Also, by testing the system first this builds confidence between the employees and Utley’s since there is a level of distrust that exists. Testing the new system shows employees that Utley’s is serious about the new payment and incentive plan. According to the U.S. Merit System Protection Board these are the key elements when assessing organizational readiness for pay for performance system: Dimension Indicator Organizational Culture Open communication is valued and pursued. Existing trust among supervisors and employees. HR department has clear objectives and supports pay for performance system. Supervisors Discretion and accountability Employees support organizational goals. Work evaluation, assignment, and distribution of awards are fair. Performance evaluation Assessment of employees is fair. Employees receive timely, meaningful feedback. Funding Appropriate pay increases and bonuses are given. Leadership is willing to make difficult choices when allocating funds and awards. Fairness Check and balances are in place. Transparency is valued and ensured. Training Training covers both pay system philosophy and mechanics. 9 Training is provided to both supervisors and employees. System Evaluation Employee attitudes are tracked. The organization evaluates how the pay for performance system is being administered and whether the pay for performance system is accomplishing its goals. Once it has been proven that there is a need for a new pay system implementation can begin. Departments should be broken down into groups such as customer service, sales clerks, distributors, manufactures, etc. These teams should be headed by a team leader who has been trained thoroughly in the new system and management should meet with team members and get their in put as to who team leaders should be. Team leaders should take the position knowing that they will be replaced if they don’t meet performance standards that have been set for them as well as their groups. Performances and promotions should be discussed by the team leaders and management on a daily basis. Teams that are performing well can be compared to teams that aren’t and this can be used as a motivational tool for the team that is performing poorly. These teams will see the incentives being afforded their coworkers for quality work and performance. Utley could make monthly, daily, or weekly announcements of who the top leaders and team players are. Utley could reward these employees specially for meeting or exceeding the performance goals. This will show employees that Utley is committed to rewarding top quality, safety, and integrity in the work place. Team members will know that if they don’t perform or meet the criteria set for in the guidelines they will not be rewarded. The sense of competition in the work place would force out the air of distrust 10 and would gradually move the employees to a sense of higher performance levels. 4. Which of the nonmonetary changes will help motivate better performance? Defend your position.
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