Diagnosis And Design Of Pay For Performance Policy Of Company X

While a good pay for performance scheme can boost employees' potential and motivation,a poorly designed one will do the opposite.For instance,employees may become less motivated and get slack in their work.Therefore,a well designed pay for performance scheme is of vital importance to most companies,which is also true of Company X.Company X,a former state-owned company which started business 30 years ago in 1989,was integrated into Group X in 2007.From then on,Company X has become a privately owned company.By the year 2018,the company still retained the management method of a state-owned company.Its compensation included base pay,allowance,TQM reward,monthly bonus,annual bonus and other parts,the distribution of which,except one-time rewards like marketing promotion reward and TQM reward,was still based on egalitarianism.Because its monthly performance bonus and annual performance bonus were still rewarded according to positions instead of performances.In the long run,it will severely undermine employees' motivation in their work.Due to the increasingly fierce competition in the market,the company has hit a business bottleneck and is in urgent need of an internal management optimization and a human resources reform.To make profit and maximize the values of its human resources,a fair and well designed pay for performance scheme is needed.It will not only boost employees' potential and realize optimized allocation of human resources,but also create more values for the company.Through interviews and questionnaires,this dissertation conducts an analysis on the company's existing pay for performance scheme and finds that there is a low satisfaction with the compensation as it does not reflect the differences in employees' performance and fails to motivate employees to work,which is especially true of grass-roots employees,most of whom are aspiring for a pay for performance reform as soon as possible.This dissertation makes an in-depth analysis to probe into reasons behind those problems and concludes that to ensure the results of performance appraisal are implemented and compensation is made based on performance,work needs to be done in three aspects: 1.appraisal based pay for performance;2.the link between performance appraisal rating and position and pay grade;3.optimization of marketing promotion reward.A performance appraisal team should be formed for procedure management of pay for performance.And performance appraisal procedure should also include performance coaching,feedback interview as well as performance appraisal appeal session.Forced distribution method should be employed for the normal distribution of performance appraisal results so as to let employees with different performances fall into difference performance ratings.Each rating has a corresponding performance coefficient and a position score.Performance coefficient determines the amount of employees' pay for performance.And when a employee's position score reaches a certain amount,he is entitled to a promotion in position and a raise in pay grade.As to marketing promotion rewards,rational allocation should be strengthened,within shorter period of time and the principles of performance determining reward and fairness in meting out rewards and punishments should be followed.Such a pay for performance reform is expected to motivate employees to take initiatives in their work and ultimately improve the overall work efficiency of the company.