Competency-based compensation programs.

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The course objectives addressed by this assignment are as follows:

• Explain the various classifications of rewards.
• Describe competency-based compensation programs.
• Describe relative standards in the performance management system.
• Discuss ethical issues in HRM

Background: Pay for Performance in America’s public schools is an extremely controversial issue. Although the process has made inroads in business and is a means to help determine promotions, pay, and retention, pay for performance has not been consistently well received in the Public school systems. There are some successful examples where teacher pay has been linked to student test scores. In Minnesota for example, some districts have stopped giving automatic raises for seniority and base 60% of all pay increases on employee performance. In Denver, unions and school districts designed an incentive program where teachers receive bonuses for student achievement and for earning national teaching certificates. On the other hand, some plans have not worked. For example, Cincinnati teachers voted against a merit pay proposal and Philadelphia teachers gave their bonus checks to charity rather than cashing them. It appears that having teachers involved in planning the incentive system is one key factor to success. The same can be said for all incentive plans – if employees do not buy into them, they will not work.

Questions to Research:

• How could an organization measure the effectiveness of their pay-for-performance plans?
• From an employee’s perspective, what are the advantages and disadvantages of using a pay-for-performance plan?
• From an employer’s perspective, what are the advantages and disadvantages of using a pay-for-performance plan?