Columbia College Mgmt 365 Discussion 3-1

Discussion 3-1

Companies use base pay either hourly or salary to pay their employees for performing their jobs. Over the recent years companies have grown, changed, and evolved; from its global marketplace, competition, and performance expectations for their employees. With so many changes, expectations, and types of business companies are now looking at different incentive programs to better suit their needs. No doubt that every program has its advantages but companies really need to look at the disadvantages and challenges that comes along with each.

Seniority pay rewards their employees based on their length of service in performing their jobs. According to Martocchio, "seniority pay does not fit well with the imperatives of competitive strategies" (2013, pg. 51). This a huge disadvantage for both the employee and the employer because no matter the quality of performance an employee gives ( exceptional or average) everyone will receive the same pay raise. The bad news for employers is that employees will most likely be unmotivated to improve their skills and performance unless they are looking to be promoted.

Merit pay rewards employees for excellent job performance. Merit pay its a really good program and its the most used method in the United States (Martocchio, 2013, pg. 57). There is a lot more factors to be considered especially over its disadvantages such as:

Employees must know and understand what will lead them to a pay raise.

* Employers must be committed and have the funds to do so.

* Adjustments to base pay must be changed to meet the cost of living or inflation before awarding merit pay (Martocchio, 2013, pg. 58).

Incentive pay rewards employees for attaining a predetermined work objective (Martocchio, 2013, pg. 6). There are three categories that employers can put into their compensation program which are individual, group, and company wide incentive plans with the considerations of their disadvantages.

A. Individual Incentive...