The Fit Stop

Please find enclosed Case Study One – Designing a Reward System for “The Fit Stop”, for your review.

Compensation could also be based in part on seniority with the company. This will show new employees that the company values workers who choose to remain with the company long-term. It also encourages new employees to make a commitment to build a career with the company and deters established employees from seeking other employment. Experienced workers will think twice about pursuing another opportunity if the new job also comes with a pay cut.

Changing to a pay-for-performance pay system always has several implications. The most important of these are discussed in the succeeding paragraphs.

Thus, employers must know how the compensation they offer for critical positions differs with compensation for similar positions at other organizations in the market. Therefore, if an organization is recognized to be a great place to work in terms of factors such as training, resources, technology, work environment, staffing, and scheduling, the organization may be able to pay less than its competitors do within an acceptable range. However, if competitors are viewed more favorably as an employer, on the other hand, the organization will need to use compensation as its strength. Although, any strategy based solely on compensation will not succeed in the long run because a successful strategy combines market-rate compensation and a work environment that is competitively distinguishing and unique (Gering & Conner,

Individual incentive pay plans reward employees for meeting one or a combination of performance standards (e.g. productivity, safety, or attendance) set by the employer (Martocchio. 2013). Piece- rate pay is one of four individual incentive plans offered in the employment industry. Employers have two options to select from when choosing this incentive plan. The first option is compensating the employee hourly for each piece over the given production number. The second option is compensating employees based on established subjective (quality) and objective (quantity) performance standards. In both options the employee is, essentially, being compensated for the work he or she does and not what could have been completed (Gibbons. 1987).  Motivation,

For the most part, a company’s compensation policy aims to ensure that employees are compensated in a fair and competitive manner. However, the compensation objectives employed by different companies can vary widely. This is especially true when taking into account wages vs. skills, competitor salaries, pay-for-performance, and other elements of compensation, like overtime, incentives, etc. (Snell, Morris, & Bohlander, 2015).

Which type of pay plan rewards employees for the range, depth, and types of abilities they are capable of applying productively to their job?

Base pay will be determined according to the value of the skills and competencies an employee has acquired on the production floor, there will be the incentive for skill development as employees base pay will increase as their skill proficiencies enlarge. This will also create mobility between jobs in the organization as many members will be proficient in numerous jobs.

Each of the three managerial strategies has different implications for how the reward and compensations should be designed. In the case of the Fit Stop, it is a close choice between human relations and high-involvement. However, I believe that a High-involvement managerial strategy would be the best choice to implement. This strategy makes a major effort to create jobs that are both interesting and challenging and

Each compensation and benefit component will need to be revised. Such a drastic change may increase our expenses short term, the loss of valuable employees and expenses needed to train new employees will have greater financial strain on the company long term. By emphasizing our vision and mission as well as coming up to speed on competitive pay and benefits, we will be able to retain many employees as well as garner new ones. Establishing a point system will give us a better look at who we employ currently as well as who we are interested in bringing onto our company. Overall, we need to ensure our valuable employees are being taken care of top to

Pay for performance is a quite rational theory. According to the U.S. Merit System Protection Board (2006), “Pay for Performance refers to a pay strategy where evaluations of individual and/or organizational performance have significant influence on the amount of pay increases or bonuses given to each employee” (p.1). This theory hope to use different salary to motivate and punish the employees according to the evaluation of their working performance. However, in the real world, it is very hard to implement in every organization, particularly in government and nonprofit organizations.

When employees complete additional training to develop skills and knowledge that will translate into increased productivity and efficiency on the job (Martocchio, 2013). When an organization rewards its employees with higher pay or a bonus for attending training or acquiring a new skill set this is called person-focused pay. One advantage for person focused pay systems is oftentimes employees like having a versatility in their job tasks. Employees are more motivated when they can use the skills they have mastered to gain more autonomy within their positions. Most employers use person focused pay programs to increase the level of employee commitment and overall job satisfaction within an organization. Another advantage to person focused pay

* It provides a more objective way of giving compensations and incentives to the employees.

Hence, person focused pay systems typically have higher average hourly wages than traditional pay systems. Since skill-based pay systems give everyone the opportunity to learn multiple skills, a large investment is made in training and, of course, training is costly in terms of paying trainers and losing production time. Furthermore, the more serious problem is that when individuals are constantly learning new jobs, production losses and problems result because inexperienced people are performing the work. Because employees are always trying to leam new skills under this kind of pay system,

To foster competitiveness and deliver better results, there is a program called STACK where employees are ranked based on the work done and their incentive is decided based on it. Better the rank, better the incentives.