Xcel Energy Pays for Employees Who Excel

Topics: Human resource management, Motivation, Energy Pages: 3 (854 words) Published: December 3, 2012

Xcel Energy Pays for Employees Who Excel
Tobie Deslo
Kaplan University
AB203: Human Resources Management
Prof. Jennifer Bryant

Name of Case
In an effort to generate high performance, Xcel Energy implemented a reward program that paid employees who submitted useful suggestions. Unfortunately, no one thought to evaluate and measure the benefits these useful ideas had to the overall mission and vision of the company. Xcel decided that merit pay can support the company’s strategy better than paying for suggestions. Have they arrived at the best conclusion? What can Xcel do to incite favorable submissions that are parallel with the company’s strategy and have a positive response from employees? It may be in Xcel’s best interest to hire a consultant to make suggestions that would ensure merit pay is an effective incentive program. Review/Analysis of the Case

A merit pay system would be a better option for Xcel as oppose to paying employees for ideas. The merit pay system gives the highest pay to the best performer which is still in line with the company’s goal to link rewards to performance. Additionally, it doesn’t limit employees to developing favorable concepts for the company. Employees that excel above their job description are rewarded and their excellent performance serves an example to other employees that the company rewards their top performers. Paying for suggestions was not a bad idea it’s the lack of evaluating the idea and how compatible it is to the company’s strategy is where is went wrong (Colter, C., 2003). In order for employees to develop ideas that complement the company’s strategies the company must clearly communicate the strategies they feel their employees can aid the company in achieving. Xcel realized that to meet the increasing needs of their customers it would have financial implications that would directly...
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