V the importance of process communication and

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V. The Importance of Process: Communication and Participation A. Since pay decisions might be viewed in different ways by different groups in the organization and technology rarely provides a "right" answer, how decisions are made and communicated is critical. 1. Participation should involve both those who will manage the process and those who will be affected by it (HR staff and line managers). Usually, participation comes in recommending, designing, and communicating a pay program. Typically, paylevel decisions are only made by top management. 2. Communication a. The consequences of not communicating effectively are described in a study in which a group that received pay cuts, but to which was communicated adequate information and remorse, engaged in significantly less theft after the pay cut than a group to whom communication was inadequate. b. The effect of communication is likely to be an impact on employees' perceptions of equity. Managers must be prepared to explain to employees why the pay structure is designed the way it is and to judge whether employee concerns about the structure VI. Current Challenges A. Although most commonly used, jobbased pay structures can create the following problems: 1. They encourage bureaucracy. 2. They reinforce topdown decision making as well as status differentials. 3. The bureaucracy, time, and cost required to generate and update job descriptions and job evaluations can become a barrier to change. 4. The jobbased structure may not reward desired behaviors, where the knowledge, skills, and abilities needed yesterday may not be helpful today and tomorrow.
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5. The system encourages promotionseeking behavior, but discourages lateral movement.
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