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Importance of Performance Management in Organizations


A small plumbing supply company in Olean, New York, is concerned about doing right to the employees in terms of the benefits offered. However, it does not know what this statement means. This paper explores the concept of benefit management at the organization.

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Finding out Employee Needs and Wants

The needs and wants for different employees may be based on differences in their performance levels. This claim underlines the significance of performance appraisal systems. The appraisal enables payments to be done according to the expected performance and competence level of employees (Crede, Chernyshenko, Bagraim, & Sully, 2011). Inflation statistics can also help in knowing what the employees need.

The overall effect of inflation is to increase the general costs of goods and services. It results in the reduction of an employee’s purchasing ability. This situation may lead to reduced motivation. Consequently, adjustment of employee benefits to restore their purchasing abilities is important. The only reliable sources of inflation levels are national statistics from a countrywide financial management organization such as the Central Bank. The salary and benefits package may also be statutory enhanced.

Employees in the US are classified as either exempt or non-exempt. The provisions of the Fair Labor Standards Act, which is administered by the US Wages and Hour Division of the Department Of Labor, provides that all employees are non-exempt except when a proof is provided to prompt the treatment of an employee (Lambert & Vicki, 2012). All employees in the United States must be paid a salary that is at least the minimum of what is provided for as the minimal federal wage for every hour worked. They are also eligible for overtime pay that is equal to one and half times the wages for the normal working hours.

Effects of the Size of the Company

Paying according to the performance level requires the development of a strategy for comparing performance among different employees. Consequently, work measurement and study are important. Such systems are only appropriate where many people work for similar vocation units. The size of the plumbing company limits the collection of performance appraisal information. In some situations, only one employee may be working for a given work unit. Hence, comparing performance levels to help in establishing a standard time so that employees who perform above it receive higher benefits is problematic.

Flexible Benefit Program, Satisfaction, and Cost Reduction

Flexible benefits offer employees an opportunity to select packages, which meet their unique needs better. Employees are more satisfied in working for organizations that meet their needs as prescribed in Maslow’s hierarchy of needs. Therefore, a flexible benefits package has the impact of increasing workforce motivation, work commitment, and engagement. Flexible benefits encompass setting dollar at a maximum, say $3000 per year, and then requesting employees to select benefits within this range based on their needs. Hence, an organization can manage its costs more effectively while ensuring accurate budgeting for costs that are associated with the benefits in the future. Flexible benefits are tax exempt. This plan provides an opportunity for making substantive savings on taxes.

Reflection and Commentaries

My future goal is to build a profitable and highly performing organization. Consistent with the lectures, I enjoyed the mechanisms and practices that I can deploy to realize this goals through performance management approaches. However, I least enjoyed the fact that this plan involves various challenges, including working with people who are motivated in different thresholds by different approaches to work impetus and satisfaction. I recommend incorporating practical cases on the applicability of the concepts learned in theory in class settings.

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Reference List

Crede, M., Chernyshenko, O., Bagraim, N., & Sully, M. (2011). Contextual performance and the job satisfaction–dissatisfaction distinction: Examining artifacts and utility. Human Performance, 2(2), 246–272.

Lambert, C., & Vicki M. (2012). The Top Three FLSA Violations and How to Avoid Them. Journal of Human Resource Management, 12(3), 306-313.

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