1. How should employees be informed of the company’s new pay policy? Explain. JetaPack needs to inform its employees of the new pay policy changes by scheduling a mandatory company meeting. At the meeting, JetPack employees should be given a copy of the new policy. The new policy should be explained in detail and any questions from employees should be answered by company managers or the HR department. 2. What effect will a pay-per-performance salary policy have on employees? Explain. The Pay-per-performance salary policy will raise productivity among the employees at JetPack Electronics. It will also lower the labor costs at JetPack. Managers must tie at least some reward to employee effort and performance at JetPack. Without this policy, motivation to perform with greater effort has been extremely low, which has resulted in higher wage costs to the organization. Employees believe that their compensation should be directly linked to their relative performance.
The pay-per-performance policy refers to a wide range of compensation options, including “proven” merit-based pay, bonuses, salary commissions, job and pay banding, team/group incentives, and various gain sharing programs. Pay-per-performance will reward employees who are outstanding performers and will encourage other employees to perform above average to receive these benefits. 3. Does eliminating the across-the-board annual salary increase seem fair? Explain. I believe that eliminating the across-the-board annual salary increases is fair.
JetPack was giving raises based on the CPI (Consumer Price Index) each year based on the company’s metropolitan area. These pay increases averaged 3. 2% yearly. Furthermore, employees received annual merit salary increases as well, which as one manager stated, “were routinely given to almost all employees. ” JetPack wants to get” the much bang for their buck as possible” and eliminating the across-the-board annual salary increases will motivate employees at JetPack to perform way above average so that they will be eligible to receive these salary increases.
4. What effect will a strict pay-per-performance standard have on how managers evaluate their employees? Designing a strict pay-per-performance standard will affect managers on how they evaluate their employees in many ways. Consideration must be given to how employee performance will be measured. For example, measuring an employee’s output can be determined by how many parts he or she manufacturers during a specific time frame. It can also be measured by if an employee develops new and improved systems or designs new parts that can positively affect the jet aircraft manufacturing process.