Pay Systems Essay

Submitted By NMH04
Words: 1837
Pages: 8
Open Document
Running Head: PAY SYSTEMS IN U.S. ORGANIZATIONS

Pay Systems in U.S. Organizations
TUI University
Nicole M. Hawkins
MGT 511
Module 1
Session Long Project
Dr. Kyle Steadham

Introduction Pay systems within the United States vary from organization to organization, as there is a vast divide in compensation scales amongst the public and private sector. This paper will examine the difference of internal and external equity; and if employees are compensated fairly. This will also lay-out how or what the factor for determining employee pay-rates and basis for increase. It will also address Google as a private sector organization and how it motivates employees to increase output, and finally recommendations for pay system improvements.
Internal & External Equity Organizations should conduct an equity pay analysis that allows for evaluation of the compensation plan based on fairness and employee compensation. The impact from both internal and external factors is vital when building pay structures. Internal influences involve employees who perform the same type of work, but have different responsibilities within the scope of h/her position, or a specific department within the same company. A structured pay scale could reflect the highest pay to be at the top, and the lowest pay at the bottom; much of this based on responsibility. Employees are able to view benefits that may be achieved based on the rate of responsibility assigned. The rate of pay, and work conditions are important factors for employees; much of which will affect output and/or rate of work. (HubPages) External influences are just as important as those internal to the organization. Evaluations of external factors allow an organization to remain competitive in that particular market. It is important to understand that similar businesses are competing with other organizations for top talent. In comparison, organizations typically look at what others in the field are paying for the same position. Managers are responsible for keeping pay and compensation competitive between the markets; failure to do so might result in the raiding or poaching of internal talent. (HubPages) I do not believe that pay systems are adequately or equally fair. There are pay/employee factors that should be taken into consideration. The pay range from private to public sector positions is truly eye-opening, and should be considered and reevaluated on a continual basis. A real-time example: I currently work for a large military medical organization, and I have just elected to leave my current position for another area within the organization. I work with six individuals who are paid more than I am; all have less education, experience, and responsibility than I do. There is no equity in the current standard, or process of how personnel are compensated. To date there is nothing that stipulates if an individual works at this level or beyond h/she would be compensated at this rate.
So, how did this happen? Failures in management and the promotion process cost our department to lose the higher paying graded slots. Understanding that there are no promotion opportunities now, or in the future for me; other department chiefs took notice and began head-hunting me for better opportunities that will result in higher pay.

Pay Factors & Increases Several approaches are commonly used for determining salary increases. Performance/merit systems are the most common. Across-the-board or general increases are often tied to increases in the cost-of-living index. For unionized employees, the collective bargaining agreement will include a negotiated provision for wage increases that usually includes a fixed general annual increase that may be combined in some instances with merit provisions and cost-of-living escalators that add to the across-the-board increase when the cost-of-living index goes up more than a predetermined amount.
Many employers utilize a grid system with low,
Show More

Related Documents: Pay Systems Essay

What Are the Benefits and Problems of Performance-Related Pay Systems for Both Employees and Employers? Essay

Performance-related pay (PRP) grew during the 1980s and 1990s due to the decline in Payment by Results (PBR) schemes. PRP looked beyond traditional PBR incentives, they reward individual contributions based on performance rather than on effort. These incentive schemes can filter throughout an organisation to motivate manager’s right through to the manual workers. This essay will try to outline the benefits and drawbacks of the PRP method for employers and employees using case study examples…

Words 2021 - Pages 9

Essay on Employment and Job Evaluation

us would continue working were it not for the money we earn. Employees desire compensation systems that they perceive as being fair and commensurate with their skills and expecta­tions. Pay, therefore, is a major consideration in HRM because it provides employees with a tangible reward for their services, as well as a source of recognition and livelihood. Em­ployee compensation includes all forms of pay and rewards received by employees for the performance of their jobs. Direct compensation encompasses…

Words 8873 - Pages 36

Fair and Equitable Compensation Essay examples

an employee who has been at an organization for five years and performed well should not be compensated at the same level as a new hire. However, in principle, compensation must be designed around the job, not the person (Klein, 2006). Person-based pay frequently results in discriminatory practices, which violates Title VII of the Civil Rights Act, and job-based compensation is the employer's most powerful defense in court. As the market becomes more dynamic and competitive, organizations are trying…

Words 1785 - Pages 8

Salary and Merit Pay Essay

e- Compensation Viola Alston Dr. Jamie Brown HRM 520 Information Systems March 11, 2012 1. Assess the advantages and disadvantages of using a Web-based compensation tool verses a client-server based or stand-alone PC based system and then give your opinion on which system would provide the most value to an organization’s stakeholders. Include three (3) facts to support your opinion. After assessing the advantages and…

Words 1856 - Pages 8

Medical Care At The Crossroad

family doctor. Governments have huge deficits and hard-pressed for additional funds. Critics argue that urgent action is needed and that by encouraging people to pay will lessen wait times. However, in reality, Canadians would be worse off if they had to pay for some of their medical care themselves. First, if patients have to pay for medical care currently publicly funded, many families will avoid going to the doctor endangering their health. A study found that, patients charged user fees in…

Words 868 - Pages 4

Business: Employment Essay

business. Different types of remuneration are: Time rate system: A time rate system refers to an hourly rate or weekly wage or annual salary. The Employees are given a rate and it will be used for that group of work. Advantages of this system are that it is simple to use and administer. Also, it is economically viable for the company to use the time rate system. The disadvantages of using this system is that it is unfair to the Employees as the pay is irrespective of how much work has been done. It also…

Words 909 - Pages 4

Canadian Health Care System Essay

Introduction to the Flaws of the Canadian Healthcare System Many people, Canadian or not, believe that the Canadian healthcare system is the one of best health insurance systems in the world to ever exist, but they are very incorrect, Canadians need to face some bad truths about the healthcare system. No, Canada’s healthcare system isn’t the best in the world, which the title for being the best goes to Japan, where Canada stands in the tenth place on the world (Muzyka, Hodgson, Prada, 2012). But…

Words 924 - Pages 4

Gender Pay Gap Analysis

rates of poverty than men (Shah, 2011). The gender pay gap amounts to 23 percent in developed countries and 27 percent in developing economies (Oostendorp, 2009). The feminization of poverty is a phenomenon that expresses that women are increasingly the ones who suffer the most from poverty (Shah, 2010). In Canada, women have average hourly wages that are lower than their male counterparts (Statistics Canada, 2011). Canada has the 7th highest gender pay gap out of the 34 countries that are members of…

Words 1565 - Pages 7

info on hlth care sys wk 3 Essay

Managed Health Care is debated on a number of aspects; nature and origin of managed care, the notion of the death of managed care and the current state of managed care in the U.S. health care system. Anyone in America, who’s used healthcare insurance through their employer, experienced managed care at some point. What is managed care and how does it affect us? The Health Maintenance Organization (HMO) ACT of 1973 required employers with more than 25 employees to offer federally certified HMO options…

Words 3203 - Pages 13

A Collaborative Work Culture

What would better motivate you, a collaborative work culture or a lucrative pay for performance system? Why? What would be your ideal pay mix? A collaborative work culture is important as it encourages a team environment and considers employees opinions. In this culture, everyone is working together, from the top down. This boosts morale as all levels are working together; creating a connection and making the lowest level employee feel important. Communication and recognition will create a positive…

Words 226 - Pages 1