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the job market; they can make demands and be more choosey about their employment situations since there are more choices for them. To combat this, Motors and More needs to appeal to employees by offering at least a similar, if not better compensation plan. Second, since every employee is paid in the same fashion, there is no reward for being a more productive employee.Competition drives organizational success, both within and outside of the organization (Argenti, 2014). Competition that yields rewards for successful employees, then, would also benefit the organization. Designing a compensation plan that both incentives employees to stay, as well as incentivizes employees to do well are key. To do so, we must compare and balance thedifferent types of compensations. Before designing the compensation plan, Motors and More must set a plan. To attract and retain the best and the brightest, Motors and More will have to lead the local market. Just
Running Head: MORE & MORE INC.-COMPREHENSIVE HR PROJECT 39meeting the relative standards of compensation of other organizations in the area will not be enough. The culture at Motors and More needs a dramatic shift. With a large turnover rate, it can be expected that there was some dissatisfaction within the organization; combatting that dissatisfaction will have to be proactive instead of just reactive. Rather than meeting the minimums, the organization needs to show its employees that they are actively trying to fix the problem.Types of CompensationThere are several different ways to compensate employees: merit pay, incentives and bonuses, commissions, on-the-spot awards, gainsharing, and profit sharing (McCain, 2007). Merit pay is based on evaluated performance over a defined period of time (Ivanovich, 2014). Merit pay adds to organizational costs, because it adds to base pay of each individual; it is also further removed from the action/reward metric since a significant amount of time will have passed before the employee reaps rewards of their hard work (McCain, 2007).Incentives and bonuses do not necessarily add to base pay, therefore does not add a reoccurring organizational cost. Incentives pay out by fulfilling or meeting a quota of some sort. For example, in the manufacturing department, if one employee is able to complete more work inless time, then perhaps they are creating more product than average, and they could be eligible for a bonus to reward their efforts. Or in the sales department, if the average sale per employee is 10 units, and one employee is able to double that, they may be eligible for bonuses. These incentives encourage employees to be more productive since they will be rewarded. Due to the nature of competition, however, it may cause employees to become to competitive (Ivanovich,
Running Head: MORE & MORE INC.-COMPREHENSIVE HR PROJECT 402014). For example, instead of working as a team to accomplish a goal, employees may begin toonly worry about their own numbers, rather than the productivity of the entire organization.