This report provides an analysis and evaluation of three different compensation strategies for potential implementation into our firm. Performance based, skill based, and piece rate pay plans are defined and analyzed. The focus of the topics included in the analysis includes employee retention, recruitment, morale, and productivity
The performance based compensation considered is individual and team based bonus programs. This seems to be the most common form of incentive based compensation and has shown to be effective in many cases. This is also a relatively easy strategy to implement.
Skill based pay is a strategy that puts emphasis on developing employees into skilled workers, as well as recruiting skilled workers. Employees are paid based on their skills rather than on the job that they fill. Its goal is to garner a quality producing team. This strategy is a bit more difficult to enact as the technical skills required in our industry are ever changing.
Piece rate pay is a pay structure that offers a set amount of compensation per item produced. It has been shown to dramatically increase production while simultaneously decreasing absenteeism. It is also one of the more difficult pay structure transitions to make, as we would most like encounter resistance from our current employees, and possible morale dips as time goes by.
In doing this research I have found that my recommendation would be to offer compensation strategy based on the wants and needs of our diverse work force. This could be
