HRM313-Ch. 5 Discussion Questions

Strategic Compensation: A Human Resource Management Approach (6th Edition)

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Fatima Iqbal 02/13/2012 HRM313 Ch.5: Discussion Questions Person-Focused Pay 1. I disagree with the statement that pay for knowledge pay plans are least preferable compared with individual pay programs. There are a couple of reasons why I disagree with this statement. The first is that because of technological advances and global competition, there is more of a need to stimulate the workforce by encouraging them to build upon their foundation of skills and talents in other functions (of the organization) as well as their current function, in order to for the company to ‘stay in the game;. I also disagree with this statement because individual incentive pay plans tend to reward employee on the completion of assigned task, which may encourage undesirable behavior. It also rewards only one functional dimension either quantity, quality of work life and customer and may hinder a company’s progress. Furthermore, pay for knowledge has the following advantages: it’s helpful in attaining organizational goals under a differentiation strategy and it attracts a creative and determined workforce. It also increases skill variety, through which an employee can increase his or her productivity and produce/provide better quality. The plan is also preferable because it encourages job enrichment and employee commitment because it rewards employees specifically for acquiring job related skills and competencies. It also increases job security as well as attracting and retaining qualified employees. Furthermore, it allows employees to have skills that can be used in multiple functions of the organization and they can perform a variety of tasks when sales are low and less is demanded of them in their main functional area i.e. job rotation. This can also decrease
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staffing costs in the long run. Through job rotation, via pay for knowledge plans, employees can feel more job satisfaction and experience an increased level of commitment. 2. I would think that project teams under group incentive plans, would be least likely to benefit from pay-for-knowledge programs. My reasoning for this statement, is because project teams consists of a group of people that are already highly specialized in their fields who come together for their knowledge, insight, skills, talents and capabilities specific to their fields in order to complete a onetime project. Because project teams need only be formed when there is a necessity to carry out a onetime project or plan, pay for knowledge doesn’t seem necessary because as soon as the project is completed the group would disassemble more likely than not, and therefore make pay-for-knowledge a futile effort in increasing productivity. A group incentive plan, as a result, would be more preferable. 3.
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HRM313-Ch 5 - Fatima Iqbal HRM313 Ch.5 Discussion Questions Person-Focused Pay 1 I disagree with the statement that pay for knowledge pay plans are

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