Compensation Management

...

But in this Case the lower end workers are not reaping any benefits. Incentive Scheme is not that beneficial to the employees and hence the objection for it. Some managers/supervisors consider workers as machines and expect that level of constant uninterrupted work and workers were of in view that this is not an Incentive Scheme but just another way of exploiting the labour.

It will affect the employee morale and finally it will create Job Dissatisfaction.[pic 8][pic 9][pic 10]

[pic 11][pic 12]

According to Victor Vroom’s Expectancy Theory if we do not give a proper Valence to his effort he will be demotivated.

- No proper system to identify the lower quality and rejection in the products

After this Incentive programme, the lower quality and rejects rate has increased by about 10 – 15%, and supervisors are branding the products as rejected or low quality, purposely. These shows that there is no proper system to identify the lower quality and rejected products.

- Departmental problems

Time between results & rewards is a one of the factor to be consider when designing Incentive Scheme and try to reward ASAP, once the agreed targets are met. But in this Case it’s not paid on time by the Accounts department. Slowness of other departments, the other department people (purchasing, Accounts, Sales, and HR) are enjoying more of this Incentive Scheme.

- Not attainable Standards (Targets)

Targets should be clear, precise & achievable (not easily achievable – stretchable). Management do not consider whether target should be achievable or not because their target is increase the production at least 40% but maximum increase in production is 32%.

- Do not have a Grievance Procedure.

An incentive wage plan gives rise to grievances of all sorts. Therefore, the management should have an effective grievance procedure to deal with complaint and dissatisfaction ventilated by employees. But in this Case they do not have any concern about grievances.

- Do not pay OT according to law.

Suggestions

- Implementation of Guaranteed piecework plan and deduct the number of lower quality and rejected products when considering the output.

- Recruit a Monitoring, Evaluation, and Internal auditor to closely control the departments.

- Implementation of Total Quality Management, and Quality Circles.

- Pay the Incentives at once in the month.

- Reduce the Targets to attainable level & do SWOT analysis before fix the targets.

- Use a Complaint box and Implementation of Grievance Handling Procedure to reduce the grievances.

- Pay the OT according to the law.

...