Policies are crucial in the workplace because they help clarify the expected employees’ standards and help the employer manage the staff effectively. The hourly policy requires employees to be paid every sixty minutes, while pay-for-performance is whereby workers receive their pay based on their productivity (Petersen, 2019). It is essential to understand the factors to consider when choosing the best strategy and their pros and cons.
Employers should consider payment approaches to avoid losses or demotivating employees. Organizations should know their payment budget and ensure that equity is maintained for workers (Erkmen, 2018). The company should also find out the payment policies used by its competitors. Overtime benefits and compensation are essential, and employers should evaluate their readiness to provide them.
Human resource policies ensure that the workers of a company are comfortable. Therefore, organizations should understand them and consult professionals before making payment policy decisions (Barrena-Martinez et al., 2019). For example, a financial manager helps an organization plan its finances. Barrena-Martinez et al. (2019) explain that a marketer enlightens an employer to understand the outside business world, while an attorney assists the company to minimize the possibility of lawsuits from workers.
Both payment policies have their advantages and disadvantages for employers and workers. The pay-for-performance pros include retaining top talent and employees’ motivation (Petersen, 2019). This strategy’s cons include a subjective performance measurement where the productivity of some workers who perform crucial duties is not defined. Moreover, workers might feel that their colleagues are favored by the company (Saether, 2019). In hourly payment, the employers do not need to employ the workers full-time, therefore, minimizing costs. There is flexibility because employees can report to work only when needed. However, this strategy can be expensive because of overtime wages for some tasks. It is challenging for employees to supervise the workers hourly (Saether, 2019). The best payment policy for a salesperson is pay-for-performance because the company rewards excellent results and does not have to compensate for bad work.
References
Barrena-Martinez, J., López-Fernández, M., & Romero-Fernández, P. M. (2019). Towards a configuration of socially responsible human resource management policies and practices: Findings from an academic consensus. The International Journal of Human Resource Management, 30(17), 2544-2580. Web.
Erkmen, E. (2018). Managing your brand for employees: Understanding the role of organizational processes in cultivating employee brand equity. Administrative Sciences, 8(3), 52. Web.
Petersen, L. (2019). Advantages and disadvantages of pay-for-performance policies. Web.
Saether, E. A. (2019). Motivational antecedents to high-tech R&D employees’ innovative work behavior: Self-determined motivation, person-organization fit, organization support of creativity, and pay justice. The Journal of High Technology Management Research, 30(2), 100350. Web.