Performance and Management
Phase III: Performance and Management
A. Policy For Recognizing Employee Contributions
The purpose of this report is to use the compensation system we previously developed in Phases I and II to pay people, develop plans that reward performance, add benefits into the mix, and evaluate these results. First we will look at performance-based-pay as a policy for recognizing employee contributions. Performance-based-pay is a pay plan that varies with some measure of individual or organizational performance, such as merit pay, lump-sum bonus plans, skill-based pay, incentive plans, variable pay plans, risk sharing, and success sharing. It is basically a pay plan that moves away from the traditional base pay and across-the-board increases, and focuses more on factors of performance that can increase overall productivity for a company. Performance-based-pay plans can be very effective in creating a positive impact in performance of both employees and a company as a whole, but only is the plan is designed well. In order to be successful, it is crucial that the performance-pay plan be designed to support FastCat’s business strategy and compensation objectives. To design this pay-for-performance plan, we will recommend a specific policy plan that is tailored to FastCat’s goals towards success. We will compare different performance-based plans, which include individual vs. group incentives and merit vs. incentive pay, to see which combinations will help FastCat compete more effectively.
a. Emphasis on Individual vs. Group Incentives Two strategies to consider with performance-based-pay plans are providing individual incentives, group incentives, or both. Individual incentive plans involve incentive compensation that is tied directly to objective measures of individual production. On the other hand, group incentive plans are incentive plans that are based on some measure of group performance rather than individual performance. Taking data on a past year as a base, group
A. Policy For Recognizing Employee Contributions
The purpose of this report is to use the compensation system we previously developed in Phases I and II to pay people, develop plans that reward performance, add benefits into the mix, and evaluate these results. First we will look at performance-based-pay as a policy for recognizing employee contributions. Performance-based-pay is a pay plan that varies with some measure of individual or organizational performance, such as merit pay, lump-sum bonus plans, skill-based pay, incentive plans, variable pay plans, risk sharing, and success sharing. It is basically a pay plan that moves away from the traditional base pay and across-the-board increases, and focuses more on factors of performance that can increase overall productivity for a company. Performance-based-pay plans can be very effective in creating a positive impact in performance of both employees and a company as a whole, but only is the plan is designed well. In order to be successful, it is crucial that the performance-pay plan be designed to support FastCat’s business strategy and compensation objectives. To design this pay-for-performance plan, we will recommend a specific policy plan that is tailored to FastCat’s goals towards success. We will compare different performance-based plans, which include individual vs. group incentives and merit vs. incentive pay, to see which combinations will help FastCat compete more effectively.
a. Emphasis on Individual vs. Group Incentives Two strategies to consider with performance-based-pay plans are providing individual incentives, group incentives, or both. Individual incentive plans involve incentive compensation that is tied directly to objective measures of individual production. On the other hand, group incentive plans are incentive plans that are based on some measure of group performance rather than individual performance. Taking data on a past year as a base, group