Managing Human Capital

Table of Contents Page no.

  1. Executive Summary 1

  2. Introduction 2

  3. Reward structure 3
  4. Performance appraisal 4
  5. Compensation and Benefits 4
  6. The Law and Compensation 5
  7. Merit pay plan 6
  8. Merit pay plans in practice 7

  9. Discussion and debate 7

  10. Examples of Merit Pay 7

  11. Successes and Failures of Merit Pay Plans 9

  12. Personal Point of View 10

  13. Guidelines for Merit Pay Plans 10

  14. Conclusion 11

  15. References 12

  16. Bibliography 13

Executive Summary

Human capital is the only living breathing capital in an organization that has a thought of its own. Managing these human capitals or employee or staff as commonly referred is a great challenge. Recruiting, motivating, compensating all the activities of Human Resource Management (HRM) has significant impact on how the employee responds to the policies introduced by the organization.

The purpose of this report was to discuss and debate with supplementary study of the factors influencing and contradicting on the part of any management to award employees with merit issues. Due to lack of data regarding the merit pay plan and its success all recommendations were made based on assumptions found from critics who argued in support and against the merit pay plan. Further assessments derived from various studies on success and failure rate and example of organizations applying merit pay plan in practice.

Studies suggest that it is hard to say whether awarding employees on merit issue will positively reinforce and motivate towards optimum output as there are certain factors to be considered and clarified before initiating such concept in to practice. First of all, there is no standard way to evaluate merit. Moreover the evaluations made by management may differ with the employee’s perception. Individualistic... [continues]

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