Jva Corporation Simulation Case Study

Submitted By nscott80
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Pages: 3

JVA Corporation Simulation
Performance management needs to be based not only on an actual review of the performance of each individual, but also on areas such as work expectations, constant monitoring of performance, periodically rating performance, and rewarding good performance. (Performance Management, www.opm.gov). It is my recommendation that JVA Corp should redesign its performance appraisal system in a way that allows for a 6 month appraisal. At the conclusion of each 6 month period, individual performance and corporate revenue will be reviewed. JVA Corp would then have the option of offering pay increases or decreases based on the progress or decline of its bottom line. This will help in creating further employee satisfaction through more options of pay increases, (two times annually as opposed to one), and will help keep the salary budget in line with expectations by having the potential to lower salaries based on poor productivity and revenue.
When lowering an employees’ salary, surprises do not create good employee morale. By following performance management guidelines, the employees would be aware of the potential raise or decline of their salary via a periodical rating of their performance, as well as the performance of the company. Employees would be educated on how their productivity directly affects their salary potential. When employees are constantly monitored in regard to their performance, along with consistent feedback, they will be better prepared to make the changes needed to help improve company revenue. Any raise (or decrease) in salary upon each 6 month review will be based with a maximum benefit/decline of the revenue change. (If the revenue drops 5% during the 6 month period, the most an employees’ salary would decrease is 5%. Their individual performance review would dictate the exact percentage from 0% - 5%. Likewise, a 10% increase in revenue caps any raise potential at 10%). To maintain consistency, this change will affect all employees, regardless of whether they are based within the U.S. or in an international location. Pending further review upon the structure of the corporation, international locations may have their salary reviews based off the revenue increase/decrease within their home country. This will help to maintain a level of fairness within an international market operating within a vast selection of economies.
In regard to the additional (non-monetary) perks that are offered to the management within JVA Corp, some changes can help recoup additional funds and lower the expenditures from 8% to 5% of revenue. (Following all applicable credit card laws), by raising the interest rate 1% on the JVA Corp card, additional revenue can be created to offset the cost of the additional compensation and perks offered. The credit card is a voluntary product offered to employees, a slight interest raise does not necessarily reflect a compensation change. This card can also be