Human Resource Management Lesson 3 Exercise
From my point of view, pay is a hygiene factor (according to Herzberg's typology). So the employee can not be motivated with the pay only, but if the employee is not satisfied with his/her monetary compensation he/she can not be motivated at all. The other and more complex issue that I see is the level of pay that will keep the employee satisfied. This can not be achieved by some absolute figures as the employee will always compare himself with his colleagues. And if he personally feels that his pay is lower than his colleagues' doing the same or comparable job, the employee will be dissatisfied.
So the manager should be smart enough to keep the employee's salary at the level of satisfaction and motivate him with additional monetary or non-monetary tools.
During my career path I had different compensation plans:
1. Fixed Salary + Fixed % from Revenue from every signed contract + Fixed % from Profit from every signed contract.
This was so called individual PRP (M. Marchington, A. Wilkinson, 2008). I think that this pay mixture reflected well my performance targets. As I was a sales rep, my hygiene needs were covered by the Fixed salary and I was motivated to sell more by my participation in revenue and profit sharing with the company.
2. Fixed Salary + Bonus (Size depended from the team target achievement).
This was a team incentive plan. As I was a team leader and my team had to achieve one common for all team members goal this was another pay system the also reflected the targets of my job role.
3. Fixed Salary + Annual Bonus (Size depends on the fulfilment of my personal business commitments that I discuss and set together with my manager at the beginning of each year).
As my job role is no more connected with sales my pay type was changed. Now I have some targets in front of me and according to their achievement I get the fixed bonus and base salary increase.
From my point of view all pay types that I experienced during my life were good for the concrete position.
11 Aug 2009 13:09
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Tags: Hrm Human Resources
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Kim White
Alexander,
You have made some sound points here. You have anchored this back to some of the material that you covered in Organisational Behaviour. Many students overlook that link, which is a missed opportunity, as it is very relevant in this particular instance. You could utilise both Content Theories (Herzberg, which you have) and Process Theories (Vroom, which you have not) as there is a difference between the intent (the content theory assumptions of PRP as designed), on the one hand, and the execution (the process theory application of the actual leader behaviours) on the other. In other words, its effectiveness can be constrained by a lack of true will and commitment by the manager. I think you could bring that out a bit more.
However, what can be done about it? How can a company, which in reality means more senior managers, ensure that their managerial subordinates are not just paying lip service? PRP procedures must be rigorously applied, but how do you do it?
Also, if you rework this for your final submission, don’t forget your references.
Kim
23 Aug 2009, 20:27
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