Question 33 differentiate between gain sharing and

Info icon This preview shows pages 17–19. Sign up to view the full content.

View Full Document Right Arrow Icon
QUESTION 3.3 Differentiate between gain sharing and profit sharing as incentive systems. Explain what Denis Spry should do to ensure that the results sharing programme will continue to motivate both managers and non-management employees. (18) Use study unit 8 as the point of departure for answering this question. To focus your mind, give a brief description of the results sharing programme – remember that it consists of a profit sharing and a gain sharing component. Discuss the differences between these two incentive schemes. Discuss the key elements in the design of a gain sharing programme. TOTAL [ 50]
Image of page 17

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
18 ASSIGNMENT 04 4.1 A compensation system must not only contain labour costs, but should also aim at achieving other goals. Identify and briefly discuss these goals. (10) Use study unit 1 as your starting point for answering this question. According to the compensation model, a company’s compensation system should aim at achieving the following goals: Effectiveness by: Improving performance Improving quality Delighting customers and shareholders Controlling labour costs Fairness (justice) Fair treatment of all employees by acknowledging both employee contributions and employee needs Procedural fairness (justice) – a fair process for making compensation decisions Legal compliance Complying with legal requirements and rules 4.2 Which of these goals are not addressed by the negotiated compensation strategy? Substantiate your answer. (5) Here you must think carefully. Look at the goals that are achieved – controlling labour costs. What about fairness (justice), quality, satisfaction of customers and legal compliance? We cannot discuss legal compliance because we do not have sufficient information. Nor can we discuss improving quality and customer satisfaction because, again, we do not have sufficient information. We can, however, assume that shareholders will be satisfied, because the new compensation structure will lead to an increase in profits. Also, it is clear from the case study that employees are dissatisfied with the new structure and we can therefore say that the goal of fairness has not been achieved. Fairness consists of two components – fair treatment and the perceived fairness of the process that is used to make compensation decisions. 4.3 Explain how the policies and techniques in the pay model can assist the company in the case study to achieve all the goals of a compensation system. (35) Use study unit 1 as your starting point when answering this question. The compensation model discusses four policies and four techniques to achieve the goals of the system. You must identify and discuss the policies and the techniques. The policies: Alignment Competitiveness Contributions Management Briefly discuss each of these goals.
Image of page 18
MNH306-K/101 19 The techniques Internal structure External structure Incentive plans Evaluation Discuss each briefly. Total [50]
Image of page 19
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern