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Running head: Utley Food Markets
Utley Food Markets
Total Rewards-HRM 533
Professor: Dr. Thomas
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Changing to a pay-for-performance plan would mean disadvantages and advantages for Utley management. One advantage of implementing this program is that it could fix the suspicion and mistrust in the organization, because the employees have more control over their salary increases. Employees have power over their increases, because the better they perform, the higher their increases will be. The previous plan made employees feel as if they had no power, because they were not included in the performance appraisals, which means they were not given feedback on they would improve. With a new plan in place, the suspicions of employees are reduced, because they are included in performance appraisals. Changing to the pay-for-performance plan means recognizing individual performance, unlimited compensation and better retention, increasing productivity and lowering production costs, motivating performance at the individual, group, and organizational levels, and drive employees to work hard and more efficiently.
Of course, there are also disadvantages in the pay-for-performance plan, such as employees may complain if problems with equipments or items out of their control get in the way of employee productivity resulting in lower performance levels. You also may attract employees who are interested in compensation, rather than increasing productivity and performance the business. Another advantage would be it rewards individual performance, rather than group performance or encourages employees to only pay attention to the work they are being judged on, resulting in the neglect of other important job components. This system may reward the excellent performance by giving them
Today, trends in management, the economy, and the workforce are changing. Traditional compensation plans such as pension plan are no longer attractive for employees. A movement toward “non-retirement” plans- that is, contribution plans that provide saving and incentive benefits to employees without a specific funding by the employer, such as PROFIT-SHARING PLANS, STOCK BONUS PLANS and EMPLOYEE ...
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opportunity to earn a higher salary, but it could discourage below average performers. This type of incentive plan may improve productivity, but it may lower job satisfaction. A pay-for-performance may not work for Utley Food Markets, because they already have a poor history of labor relations, so even the best conceived pay-for-performance program can fail in this case.
The changes made in the way the system operates now, is managements needs to improve labor relations. Employee should be included in the performance appraisals; they must have a voice in management decisions, have a clear understanding of the company’s goals and priorities, and be educated in what areas they will be judged on in their performance appraisals. The employees of Utley Food Markets should no longer be kept in the dark, and they should know the results of their appraisals, and what areas they need to improve in. Employees should be made to feel like part of the team, rather than a work horse that is being judged but not at all motivated to improve performance. The company should also promote the belief that performance makes a difference, or they will end up with low achievement.
In order to implement the changes, you must analyze the situation and determine what incentives will work to motivate employees. You must determine if the pay for performance plan is motivating to the employees, or the incentives in place only work to motivate the supervisor. Next, you should link pay with performance and instill the belief that improved performance means better pay. Though you may see higher production, you must also pay attention to quality and ensure employee are not sacrificing quality for
Before executives undertake to design a performance pay plan (PPP), they should carefully think about the objectives that they want employees to pursue. In Safelite case, they want to increase installers’ productivity, create loyalty among its largely transient workforce and combat the industry’s traditionally high turnover rate. A good PPP should address all those problems. PPP should have a good ...
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quantity, then forfeiting the needs of the customer, just to improve their pay. Quality control inspections should be completed to make sure production and quality of work are still up to par. You must anticipate any loopholes that could become a result of the new pay-for performance system. You must establish standards and determine pay, so that employees know what is expected of them, they receive a fair appraisal, and all employees are judged under the same standard, keeping in mind their level of responsibility and disciplines.
It will also be important to protect workers from their own fears, maintaining fair standards and pay, encouraging breaks to ensure they are not focused solely on increasing production, provide a safe environment, and provide feedback on performance. Utley Foods must communicate with their workforce, and provide a safe, trustworthy environment where the employee is just as valued as the employer. Most importantly, since this was challenge for Utley in the past, they must improve communications, by building positive interpersonal relationships between management and employees, explain the new program to employees, and remain open to employee suggestions and feedback on the program, so employees feel like they have a hand the system that is governing their pay and performance appraisals. Utley should also review the program from time to time, to confirm they are getting the results they want and the advantages of the program are stronger realized than the disadvantages. For this pay-for-performance plan to be effective, it must be perceived as fair by employees at all levels and to achieve this objective, it must be clearly understood by everyone involved.
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The non-monetary change that will motivate better performance would be improved communication. The explanation of the pay for performance program, the clear goals set up for employees, along with the employees having a say in the plan that governs their appraisals and increases is a great motivator. The employees will no longer be left in the dark, and the fact that management communicates with them, asks for their thoughts and input, and allows them to have a voice will make them feel like an important member of the team. Feeling like you matter is important to all employees, no matter what level of responsibility you have. Communication is a key factor in non-monetary motivation, and will be a great way to improve and build interpersonal relationships between the employees and management, which should result in better relationships and improving employee trust within the organization. Many pay-for-performance plans fail because there is a failure by employers to communicate clearly and a lack of transparency on how the review process is conducted and its impact on workers. That is the perfect example of why communication is so important between management and staff, and would a great non-monetary motivator.
Pay for Performance in Hospitality Management Introduction It has been a long talk, as for the effectiveness of the Pay-for-Performance (PFP) programs for the hospitality service entities. It may be assumed, that PFP is one of the most effective presently used systems of reward in any sphere of business, not only hospitality, but this work will look at both pros and cons of using PFP, as it ...
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Incentive Pay (pay for performance).
By Gregorio Billikopf. Retrieved from http://www.cnr.berkeley.edu/ucce50/ag-labor/7labor/08.htm on November 28, 2010.
Pay for Performance. By Karen Zinbelman. Cooperative Grocer. #070 May – June 1997. Retreived from http://www.cooperativegrocer.coop/articles/2004-01-09/pay-performance on November 28, 2010.
The Advantages of Pay for Performance Plans. By Chris Joseph. eHow.com. Retrieved on http://www.ehow.com/list_5921014_advantages-pay-performance-plans.html on November 28, 2010.
The WorldatWork handbook of compensation, benefits, & total rewards. Hoboken, NJ: John Wiley & Sons.