Assignment 4:
Utley Food Markets

Celene D. Wright

Total Rewards (HRM 5533)
Professor Jeff Surprenant
November 27, 2010

1. The new Utley management would like to establish a pay-for-performance system. What does this mean to the Utley management?
Changing to a pay-for-performance plan would mean disadvantages and advantages for Utley management. One advantage of implementing this program is that it could fix the suspicion and mistrust in the organization, because the employees have more control over their salary increases. Employees have power over their increases, because the better they perform, the higher their increases will be. The previous plan made employees feel as if they had no power, because they were not included in the performance appraisals, which means they were not given feedback on they would improve. With a new plan in place, the suspicions of employees are reduced, because they are included in performance appraisals. Changing to the pay-for-performance plan means recognizing individual performance, unlimited compensation and better retention, increasing productivity and lowering production costs, motivating performance at the individual, group, and organizational levels, and drive employees to work hard and more efficiently.
Of course, there are also disadvantages in the pay-for-performance plan, such as employees may complain if problems with equipments or items out of their control get in the way of employee productivity resulting in lower performance levels. You also may attract employees who are interested in compensation, rather than increasing productivity and performance the business. Another advantage would be it rewards individual performance, rather than group performance or encourages employees to only pay attention to the work they are being judged on, resulting in the neglect of other important job components. This