What Are Some Advantages of offering a Piece Rate Pay Plan to the Furniture Builders at Metropolitan Furniture?

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Team-Building: When employees are faced with the task of working with one another, relying on each other’s contributions for their compensation, a spirit of teamwork can materialize. Employees feel stronger and more effective in a team unit than they do on an individual basis. This lead to greater staff unity in other aspects of the business, which has the potential to reinforce the workforce and promote company loyalty and longevity. At Metropolitan Furniture the workers help each other to complete the pieces of the furniture sets.

Reduce Employee Turnover: Attractive total rewards packages reduce employee turnover because employees who feel satisfied with their pay and conditions are less likely to be enticed by a competitor. Researchers found that companies with long-term, team-based incentive pay, experienced lower than average employee turnover, this is because members of the team are committed to the shared goal and reluctant to leave their colleagues. Lower employee turnover benefits Metropolitan Furniture Company by reducing costs of recruiting and training new employees.

Q3: What do you think Sally should do?

Sally should considered with his ideas to offering a team-based incentive pay plan because it is a better approach compared to piece rate pay plan. In offering a team-based incentive pay plan, the Metropolitan Company can provide a bonus payment when each set of furniture is completed in time for scheduled delivery. At the same time, great understanding and goal relationship between employees will be created when helping each other. Paying group performances provides more like bonuses. Example, when each set of furniture is completed in the time for scheduled delivery. This is because Metropolitan Furniture has a competitive advantage in on time delivery. Reputations for on-time delivery differentiate Metropolitan from its competitor. General companies that compete against Metropolitan have a reputation of late deliveries, it’s give Metropolitan a competitive edge. This is because their promise of on – time delivery is such a high priority, which is the company`s strategic objective.

Besides that, when Sally considered for a team-based incentive pay plan, the workers will help each other’s to achieve the goals and to complete certain pieces of the set furniture to ensure on-time delivery. Then, the Metropolitan will maintain their good reputation and performance for on-time delivery compared to their competitors. Piece rate pay plan would negatively affect the employees need to work together as a team. Team based plan pay encourage group or team members to cooperate so that they can achieve their goal. So, Sally should proceed with team based pay to have a sustainable competitive advantage over its competitors.