Sears Company’s Economic Improvement

Sears change the total reflection

In any organization that is customer-oriented and goal-oriented, changing is an inevitable strategy to be incorporated into the strategies of the organization in order to achieve the missions and the visions of the organization. It is therefore worth mentioning that the changes incorporate by Sears are a positive approach to the solution of an inherent organizational problem. The change in the reward scheme to a more flexible and effective approach through the creation of career bands was an imperative positive approach by the organization. The approach focused on the market value pricing which business-wise is important in ensuring the sustainability, efficiency and the total company’s performance in terms of acquiring a larger number of clientele based on the performance of the company (Rogers, 2006).

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Sears reward scheme of reward changing is undeniably one of the major and necessary steps for a company to take in order for it to remain competitive and relevant in the world of increasing concern of the market issues which in this case includes the need to have a prospective market which also includes the relationship between the rewards of the workers and the market pricing.

Link of performance-oriented compensation with market pricing

It is essential for any market and consumer-oriented company to frequently evaluate its market performance in relation to its working staff. If in any case there is a significant decrease in the market share, there is an urgent need to address the working staff and consequently implement working strategies that can easily boost the company’s performance in its market which is, in essence, the major task of the company.

The decision by Sears to link the compensation system with the performance of the company is thus entirely based on the fact that there is a need to rate the employee on the tempo of delivery to the company’s clientele which is the major concern of the company. Unlike the traditional approach which required employees to be rated by the number of years that they have worked for the company, this approach adopted by the company on rating the employees based on their performance has a more positive impact in the sense that the employees will feel appreciated by the effort that they put to improve the company’s performance in a short term. This discussion vividly reveals the relevance and the positive link between the compensation scheme and the market value.

Consequences of a job evaluation system that do not have market pricing

The effort to link the job performance of an individual worker to the market price data is a good step by a company to reveal the performance of the employee in the mandated task. It is however imperative to note that there are jobs that do not necessarily have a direct link with the market pricing. Such a task includes the company’s suppliers, cleaners or the subordinate staff among other important human resource of a company.

Rating every employee of the company on the basis of the market price will definitely result in unrealistic results since the entire human resource of the company is not directly related to the company’s performance (Schumpeter, 2004). Using a career band scheme on these jobs will consequently lead to poor results of the analysis because the results will be faulty since the measuring qualities are not related to the job; the job of jobs will be significantly affected basing on this simple analysis.

The relationship of a job that does have market pricing and those that do not have market pricing is not going to be affected significantly either because measuring of these jobs is done differently. Those that do not have market pricing have a job evaluation system that acts as a check and balance mechanism which aids in the process of ensuring that there is a balanced working environment to these jobs.

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Measures to take when the market pricing goes down

Based on the developed job evaluation system and career bands, Sears should be in a position to determine the performance of every employee of the company on the basis of the results that are evident from the outcome of the market price value if these jobs have the market pricing option. If the market price drops in a given year, it is the responsibility of the evaluating team to determine the cause of the decline in the job’s performance which contributed to the drop in the market price (Bass, 2009).

In some situation as clearly outlined in the provisions of the career bands, the compensation of the particular employee linked with the dropped market pricing should be affected as well. The genesis of the drop in the market pricing should, however, be investigated in order to make constructive decisions and not to blame pre-maturely. It is also imperative that the actions taken are in a professional manner in order to avoid affecting the employee’s mentality or rather making them de-motivated.

References

Bass, F. M. (2009). “A new product growth model for consumer durables“. Management Science. New York, NY: Mc-Graw Hill. 215-227. Web.

Schumpeter, J. (2004). The Theory of Economic Development. Cambridge, MA: Harvard University Press. Web.

Rogers, M. (2006). New Product Adoption and Diffusion. Journal of Consumer Research. (15),290–301. Web.

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