Understanding Remuneration Systems
For any organization, the understanding of an established way of running enterprises not only focused on the strategy through which the entire functioning of the organization will take place but also the way through which employees are considered at work. At any workplace, the way employees are treated and the way employees are rewarded in e respectable manner play a very integral role in creating a sense of motivation among the employees. These factors in particular play a very peculiar role in assuring that the performance of the organization remains prominently positive. The following work looks into the case study of the O’Meara electronics company and how the operating system of the company that has run for more than 20 years transforms from being a company that was based on a position-based remuneration system and transform itself towards a person based system that will evaluate the remuneration and performance management policies and procedures to develop better systems. The following Essay will be conducted through the point of view of the consultant to critically analyze different remuneration systems and make an assessment as to which system or a hybrid of the system can become most appropriate for the organization.
The following organization that has run for more than 20 years focuses on developing a more international strategy and focus on starting with its Melbourne branch in implementing a new change that can be replicated in the organization other subsidiaries and changes that can be brought by the different country and their legislative practices and requirements into consideration. Before understanding the differences that can happen from one specific strategy to another it is integral to first recognize what the company followed as the system strategy in the past and what it is about to enter. The company which prior followed a position-based remuneration system focused on the idea of prioritizing a job-based compensation structure or a job-based pay where it is considered to have a compensation system where the payment of every employee is set based on the job position they are on. This kind of specific strategy is one of the most traditional types of compensation system where employees are remunerated based on the jobs which they are currently performing. Which in simple terms means that the employee will be paid depending upon the position they are working on.
However, with the higher level of resistance within the company, there can be seen various scopes of changes that lead to a development of an international strategy that created the need of the prospect that was offered by the director of HR management which is focused on a person based system. A person-based system or a person-based pay structure is simply focusing on a payment system where every employee is rewarded based on the person that they are at work and not the position they are on. This simply means that each employee will be paid based on the performance they are giving to the organization. The idea of utilizing proper remuneration and performance management policy along with procedures that can help in developing positive systems the organization that utilizes HR consultant to be appointed for creating a new recommendation ahead will not only bring forth positive ideas but also change itself.
The Case for a Person-Based System
To provide a proper recommendation as a consultant it is integral to first distinguish between a position-based employee system or a person-based system. Both these prospects are extremely different from one another yet most of the organizations around the world at present still follow up the position-based system where every employee is paid based on the position that they hold within the company. This means that even if a person does little to minimum effort within their jobs but is hired on a major job role chances are that they will get paid more than an employee who gives their total devotion to the organization at every front. On the other hand, a person-based system is considered a newer way or approach that is welcomed in the current startup environment globally where people are paid based on the performance and the amount of work they are working on. However, there is also an understanding that not all organizations are cut for being part of a person-based system while some require to perform a position-based system.
To better analyze if the following person-based system is good enough for the organization it is integral to understand the different considerations of the drivers and elements of the different remuneration systems that can be taken into consideration within the following organization. A proper remuneration system is often also considered as a compensation system within an organization. There are many different types of compensation systems that every organization can consider depending upon the different types of compensation that are more suited for their organization. However, in general, the 5 most common kinds of remuneration systems are price rate system, Commission system, bonus system, merit based system, and skill based system. In one place the piece rate system is focused on the idea of an unemployment system where employers pay the employees the per item of work completed by them instead of per hour or being at a fixed yearly salary. A Commission system on the other hand is focused by an elected Commission where employees are employed based on contracts on working for a specific period and on a specific job role.
A bonus system is one of the common kinds of remuneration where employees are given bonuses for their performances every quarter or based on a half-yearly or yearly basis. The other kind of remuneration is the skill-based system where the rewards of the employees are additional pay that is given in exchange for proper certification of the employee’s mastery of a specific skill or competence. The other prominent form of remuneration system can be the merit-based system which utilizes an increase in pay based on the criteria that have been set by the organization or can be stated as a pay for performance system where companies offer incentives to higher performing employees on regular basis.
By understanding all these factors specifically the remuneration system it can be said that for the organization to not only focus on its person based system but also come up with a more prominent element that also considers the different kinds of worries and issues that every employee faces at the organization that was prominent through the discussion. One of the biggest issues that most of the employees expressed through the introduction of a new performance management policy and creation of a performance system itself was the very fact that many employees believe that the organization has many such people who do work a lot more than can be considered. This in many ways can be taken into consideration as a common factor where many employees who do not work well enough gain the credit as many other employees who do work in different parts and avenues of the organization are often not recognized in an organization along with times where employees are to be recognized for their positive work. There is also hesitancy among employees who do not have a lot under their pocket and are working within the companies specifically in regards to some specific job that they are supposed to do. All these prospects can be taken into consideration when the organization focuses on coming up with a proper system where the remuneration is based on the skill-based system.
Identification of Appropriate Remuneration System
What will help in making this a transformation and change for the company will be the fact that every department will be compared based on the skill set that is required for their job role. This way the progression and the way every employee is remunerated will be primarily focused on the different job roles that they are supposed to do depending upon their department itself. Apart from focusing on the skill-based system of remuneration the organization should also come up with a systematic method of performance evaluation. The performance evaluation criteria for every department should be different from one another and should not only focus on criteria like performance or employee work that has been conducted towards the client. It should rather focus on concerns over the day-to-day job of the company. This will not only help the organization employee be recognized for their skill set rather than get ignored based on many work criteria that they generally perform but are not getting paid for.
Apart from the understanding of the organizational need that has to be recommended towards the remuneration system of the following organization the organization should also focus on creating a proper training system for all employees to understand how they can work in this new changed-up setup. Furthermore, the organization should also bring for the policy where employees who may have a lot under their wing but are not performing constantly for a longer period specifically senior employees the whole process should hold action plan itself. Apart from that, the organization should also focus on creating a direct relevance for itself through planning different ways of changes that will be accepted by employees by putting forth regular connection and connectivity with all employees from time to time through online communication and consulting.
The following recommendations work well with the organizations as the organization needs a systematic approach that helps reduce all the doubts and issues faced by the employees. Apart from that, the following recommendation not only assures the benefit of the employees but also the benefit of the organization on a larger scale. Not only will this specific strategy and this specific remuneration system help employees remain motivated in their workplace but will also help the company assure that people who are working hard at their jobs are getting properly paid for doing so.
Conclusion
It can further be concluded that as an organization the O’Meara is best suited to accept a skill-based system of remuneration for itself. The organization needs an integral change at a faster pace in the coming few months and a processed way of approach that is international in nature. This particular change within the company will not only assure that the organization can perform its best set of work but also assure that employees stay motivated and give their best at the workplace. It also focuses on the idea of providing opportunities to employees who are good enough for the following job and can lead to a change in a setup that has been seen regularly in older organizations. It is high time that this new way of working is accepted and recognized ahead of the traditional way of payment and recognition of employees.
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