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salary adjustments and worker productivity
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salary adjustments and worker productivity
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Does performance based salary adjustments have a positive impact on worker productivity????
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Forums » Topic Forums » Training & Organizational Development » salary adjustments and worker productivity
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salary adjustments and worker productivity
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salary adjustments and worker productivity
posted at 10/2/2001 4:21 AM EDT
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Posts: 1
First: 10/2/2001 Last: 10/2/2001 |
The performance based salary has two sights. The worker motivate specialist have diferente perspective of this. There is a group that no recomend the performance based salary because it inhibits the intrinsic factor that can influence the good performance in jobs that requires of competencies like creativity,autonomy, analisys and personal growth. A worker who is motivated by intrinsic factors has the satisfaction for make the things because he likes his job and can't be stimulated for an external motive. The excessive empahsis in the external rewards can be nocive for the performance of these kind of workers. There is personal and company objectives that simply can not be achieved by means of an economic remuneration.
Likewise, the intrinsic motivation, by wonderfull tha can be seem is not present in all the employees neither is always the same type of performance hoped by the company. The remunaration can be a powerfull tool of management and an irresistible motive. The employees frecuently consider remuneration as a measure of goals achievement and social level. The remunaration value should not be overcoated and undervalued To be effective, the remuneration should be tied to the performance. The incentives (variable pay) are the greater nexus between the remunaration and the performance. If The objectives performance are linked with the business objectives, the productivity can increase and obtain better and effective business results. Although, the incentives are not for all the jobs. I hope that this can be useful for you |
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salary adjustments and worker productivity
posted at 10/4/2001 4:59 AM EDT
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Posts: 3
First: 4/4/2001 Last: 11/15/2005 |
Are you making reference to incentive pay beyond a base salary? If so, there are two schools of thought. Most research has shown that incentive pay can in fact have the reverse affect on worker productivity. Point being made is that workers who are going to do a good job would have done it anyway, with the incentive they could be tained over time to believe that if incentive pay goes away then so does productivity. You see their minds have been calibrated to associate productivity with incentive pay. On the other hand it has been found that if the incentive pay is something that the worker values (and this is very hard to determine)he will temporarily adjust his behavior only to receive the incentive. Additionally, you have to consider the risk of employees "gaming" the system. Exhibiting behavior that is not in the best interest of the company or even engaging in unethical practices so as to obtain the incentive. |
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salary adjustments and worker productivity
posted at 10/4/2001 10:48 AM EDT
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Posts: 2
First: 9/25/2001 Last: 10/4/2001 |
There are two aspects to consider with production-based financial incentives. First, what happens if you dangle a carrot in front of a donkey? The donkey walks in the direction of the carrot. What happens when you give the carrot to the donkey? The donkey stops moving. I am not stating that workers behave like animals, although sometimes I wonder, but the principle still applies. The most prevalent problem with financial incentives is that unless you are willing to maintain a system of constant reward, long-term performance gains will not be realized. The opposite has actually been found: once the financial reward is achieved, return to baseline is often over shot, leaving the worker at a lower level of productivity. The only alternative is one that is expensive and involves creating a disruption in the perceived equity of the employee. If the incentive is large enough as to eliminate possible rationalization by the employee, the only alternative is to justify the reward by increased productivity.
The second aspect of this dilemma is the structure of the reward. Is it proportional to base salary, or based on incremental target objectives? If it is target driven, there is a larger proportionate gain for those with lower salaries leaving higher paid workers less motivated. However, if it is proportionate, such as percent gain from the base salary, a perceived inequity results on the part of the lower paid staff. Either way, are you gaining anything, or should you be looking into an intrinsic reward structure? Good luck. |
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salary adjustments and worker productivity
posted at 10/15/2001 8:13 AM EDT
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Posts: 1
First: 10/15/2001 Last: 10/15/2001 |
Effective June 2001, we decided to take a more active approach to pay adjustments and are basing it on "performance". For those employees who haven't reached the target range, they are really excited about it because a high performer can earn as much as 9% vs. before it might have been about 4%. |
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salary adjustments and worker productivity
posted at 10/16/2001 8:20 AM EDT
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Posts: 7
First: 10/15/2001 Last: 10/16/2001 |
We have a plan that is completely different. Pay raises are based SOLELY on market value of a position--people may not receive a raise in a given year and know that upon hire. However, we have a comprehensive bonus program that is company wide (exempt and non-exempt) where an employee can earn up to 25% of their base salary. The bonus is based on performance only.
I wasn't with the organization when the plan was established, but it seems to work fairly well. People understand that asking for a raise isn't an option due to the need to perform market analysis each year on the positions. All raises occur at the same time--January. |
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