Please make sure that each response is answered in apa format and each 150 word count with at 2 scholarly sources. Please cite sources. ( Original question- Two employees perform the same job and each received outstanding performance ratings. Is it fair to give one employee a smaller percentage merit increase because his pay falls within the 3rd quartile but give a larger percentage merit increase to the other employee because his pay falls within the 1st quartile? Explain your answer.)
It is different arguments in reference to pay scale and quartiles. According to Martocchio (2013), If two employees are performing the same job at an equal level the compensation should be similarly. However, if one employee is out performing the other employee based on company guidelines and structure the employee that performs better should be compensated for his performance.
According to Kahya (2018), there is still a lack of research investigating of how employee characteristics and performance are integrated into a wage structure. It is intended to develop a salary model that creates a wage level from overall score consisting of job evaluation, employee characteristics and job performance in order to ensure wage fairness and also enhance employee’ satisfaction. In the first phase, a point factor job evaluation system including sixteen factors was adapted to determine the job scores of the white-collar jobs within a company. The score generates a basic payment. There will be extra pay for the staff who are well educated and experienced for the job. A method producing a score from employee characteristics in terms of “education” and “experience” factors was developed. Job performance should be measured with how an employee achieves the task activities for eleven job evaluation factors.
Employees want to know most of the benefits to include retirement plans before they accept a job offer. Of course, career minded employees seek out companies who offer the most lucrative wages and benefit plans making up the overall total package. Under defined contribution plans, employers and employees make annual contributions to separate accounts established for each participating employee, based on a formula contained in the plan document (Martocchio, 2013). Ultimately, defined contribution plans require employers to manage investments in the retirement fund accounts. Retirement plans provide income to individuals and beneficiaries throughout their retirement (Marticcho, 2013). Accordingly, people want to know their retirement is protected so they do not have to guess how they will survive financially upon retirement.
Organizations makes assessments to achieve improvements in employee activity or in those processes that do not bring the desired performance. If, through various methods used to determine the degree of fulfillment of performance by employees, these performances are met, then the employees should be rewarded financial or nonfinancial, and if they are not fulfilled, employees must be sent to various training programs, learning or development processes in order to improve their performance. Employers should use methods and models to assess performance and we are also present the advantages and disadvantages of their use in organizations. Quartiles should not be the basics of compensation.
According to Guerriero and Hopkins (2018), When establishing merit pay amounts, managers should ensure that increases are in line with job performance.
Countless employers construct salary ranges or grades used to allocate compensation to individual jobs within the company (McKinney, Mulvaney, & Grodsky, 2013). Hence, the salary range permits the ability to recruit potential employees of varying abilities and allows for salary increases for employees already holding positions. Furthermore, ranges are also utilized in budgeting and planning. Consequently, salary ranges are regularly dictated by the employment market and the region in which a company conducts business. Therefore, merit pay is a system of compensation that is founded on performance and results rather than experience. While this is one of the most widely accepted methods to encourage and recognize meritorious job performance, it can also lead to problems in others. Therefore, companies should consider the potential negative effects before implementing this type of compensation system in their business (McKinney, Mulvaney, & Grodsky, 2013). Unfortunately, there is substantial controversy about how effectively merit pay systems actually operate (Schwab & Olson, 1990). With that being said, unless improvements are made to existing merit pay plans they are likely to cease to exist due to a failure to add value to organizational effectiveness (Eskew & Heneman, 1996).
Since salaries are established on the merit increase bid it is vital to understand that quartiles separate each salary band into four parts. Furthermore, these divisions are not equal, considering that the first quartile has a broader width due to the restrictions set by law (Martocchio, 2013). However, when companies hold positions in pay range constant, pay raise amounts increase with the level of performance. Therefore, based on the example in our textbook, if a firm has two workers who perform the same job and who both received exemplary performance ratings, but the base pay puts them into separate quartiles of the pay grade. If these workers were to receive the same pay raise percentage, the base pay rate for the worker in the third quartile would likely surpass the maximum pay rate for the range more quickly than would the base pay rate for the worker in the first quartile. Furthermore, budgets can restrict the merit pay percentages in each cell. Moreover, merit pay increases awarded to employees vary according to performance level and position in the pay range (Martocchio, 2013). Therefore, in my opinion, it is fair since it keeps things equal.