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Nov 24, 2024

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Research Assignment Name April 14, 2023

Introduction Pay-for-performance systems have been promoted by many human resource professionals today. These systems pay employees based on their value and contribution to organizations. Under pay- for-performance systems, employees are not entitled to compensation. They are awarded based on merit. Organizations using pay-for-performance systems often conduct performance evaluations and use them to compensate employees. The implementation of pay-for-performance systems can take various forms such as discretionary bonuses, variable pay, non-discretionary bonuses, and merit pay. The practicality of implementing a pay-for-performance system for an organization has been explored. Background of the organization The organization is United States Marines. This organization is a branch of the armed forces. It conducts amphibious and expeditionary operations. US Marines is responsible for the defense of naval bases. The organization develops techniques and tactics to be used by various landing forces. US Marines implements special, infantry, and artillery operations ( Wood 2019 ). It is responsible for protecting the nation and fighting various battles. Employees in United States Marines are compensated based on their ranks. Senior employees are paid higher salaries while junior employees are paid lower salaries. The experience of workers is important in determining their pay in US Marines. Those who have extensive experience are likely to be paid large amounts of money while those who are inexperienced receive lower wages. Payment and incentives are directly tied to position in the organization ( Wood 2019 ). High-ranking employees receive high salaries regardless of the work they do in the organization.

The United States Marines requires workers to have various skills such as math, computer, and linguistics. In the past, education and soft skills were not considered a requirement. Technical skills are now a requirement due to the technological advancements in the world. Individuals with the required technical skills receive high salaries ( Wood 2019 ). However, there are leaders who lack technical skills, but receive high salaries because of their experience. PFP Plans The PFP Plan to be considered is merit pay. Merit pay involves rewarding employees who display high performance with additional pay. Employers have to conduct performance reviews to measure the employees’ level of performance. The payment made to employees are added to their basic salaries. The forms of merit pay include pay rises and additional cost-of-living adjustments ( Bartol 2023 ). An organization using merit pay has to review the performance of employees regularly to determine whether or not they deserve pay rises. The United States Marines could use merit pay to ensure that workers are paid based on their performance. How the organization measures the effectiveness of the plan The effectiveness of merit pay plans could be measured by determining the turnover rate, staff satisfaction, job offer refusal rates, staff commitment, and productivity per employee. If merit pay is effective, it will help increase the productivity of employees. Staff members could increase their performance level if they know they will be paid according to their performance ( Bartol 2023 ). If the productivity of employees does not increase, one could conclude that the merit pay system is not effective for US Marines. The level of staff commitment could either increase or decrease when the merit pay system is implemented. Job candidates could also accept or refuse job offers after hearing the compensation system used by the organization.

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The compensation system used by organization could affect employee satisfaction. One could measure job satisfaction among the employees immediately after implementing the merit pay system. They could compare the current and previous job satisfaction levels to determine the impact of the merit pay system ( Bartol 2023 ). Turnover rate refers to the number of employees who quit their jobs. If employees quit their jobs after the implementation of merit pay system, it could mean that the system is ineffective. Employees’ perspective Advantages The merit pay system has many advantages from an employees’ perspective. The system encourages commitment and loyalty from employees. Employees increase their performance level when they are promised better compensation. The merit-pay plans foster healthy competition at the workplace ( Bartol 2023 ). They help create positive work environments. Employees are likely to be motivated by the merit pay system because they are rewarded for exceptional performance. Disadvantages Merit pay could cause perceived favoritism. Some employees might feel that managers are favoring other employees. They might also feel that the managers are not being fair when conducting performance reviews. Merit pay systems could decrease the morale of some employees. Employees could feel that they are being paid less money for the same amount of work done by other employees ( Miller et al. 2022) . Others could also feel they are being paid the same money as workers who perform less work.

Employees might have unfounded expectations when the merit pay system is used. They might continue expecting increased salaries and more compensations whenever they increase their performance level. Some employees could act selfishly because their individual performance will determine their compensation. They might forget the importance of teamwork in the organization. Employees might fail to consider the best interests of the company ( Banfield et al.2018) . They might focus on improving their productivity levels instead of helping struggling team members. Employer’s perspective Advantages Employers in the United States Marines could use the merit pay plan to identify employee rankings. They could perform merit evaluations and have a list of workers by their strengths and performance. Employers could ensure that top performers in the organization are rewarded. They could make the objectives of the organization clear to the employees ( Miller et al. 2022) . Merit pays plans enable managers to understand the differences between the performance of employees. They ensure that managers consider the contribution of employees and encourage them to make more significant contributions for better salaries. Employers could attract highly skilled workers and top talent when they use the merit pay system. Confident workers who believe in making contributions to an organization are attracted to organizations using merit pay systems. Employers could also retain competitive performers. Employees who perform well in organizations are likely to appreciate the merit pay system ( Ruffini et al. 2020) . They are unlikely to quit their jobs because of the pay system.

The use of a merit pay system can help employers to provide clarity on pay rises. Employers might find it easy to explain to the employees how they can get pay rises. When compensation is tied to performance reviews, tangible reasons for pay rises are provided. Employers do not need to supervise their employees closely when they use a merit pay system. Employees already understand what they should do ( Ruffini et al. 2020) . Managers are not required to closely monitor employees since the employees understand they have to work hard to earn higher salaries. Disadvantages The merit pay plan causes a managerial burden to the employers. Employers have to do a lot of work to complete the merit pay plan. They have to measure the performance of employees continually. The merit pay system could lead to unfairness due to subjectivity of the managers. It could have adverse impacts on the performance of employees. Performance assessment in the merit pay system should always be guided by precise data ( Ruffini et al. 2020) . During the implementation of a merit pay system, employers might have to spend a lot of money. Merit pay system requires a lot of financial resources and time to become an accurate program. Conclusion Pay-for-performance systems can help companies to attract top talent. Employers can use such systems to boost morale and motivation and increase productivity. Financial rewards are effective motivators of employees in various organizations. Organizations can use various forms of Pay-for-performance systems such as variable pay and merit pay ( Miller et al. 2022) . The United States Marines pays its workers based on their ranks and seniority. The organization could use a merit-pay plan to help increase the performance level of employees.

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Employers should conduct performance reviews regularly. They could use the performance reviews to determine whether employees deserve pay rises. Pay-for-performance systems could encourage healthy competition as every employee works hard to increase their performance level ( Banfield et al.2018) . However, such systems could cause various issues such as managerial burden, perceived favoritism, and poor teamwork. To implement the merit-pay system at United States Marines, there should be clear communication between various departments. The organization should have clear policies about calculation methods, reward structures, and company goals. The effectiveness of the merit pay system should be measured by staff satisfaction, turnover rate, staff commitment, and employee productivity.

REFERENCES Banfield, P., Kay, R., & Royles, D. (2018). Introduction to human resource management . Oxford University Press. Bartol, K. M. (2023). Pay for Performance. Handbook of Principles of Organizational Behavior: Indispensable Knowledge for Evidence-Based Management , 137. Miller, L. E., Kondamuri, N. S., Xiao, R., & Rathi, V. K. (2022). Otolaryngologist Performance in the Merit‐Based Incentive Payment System in 2018. Otolaryngology–Head and Neck Surgery , 166 (5), 858-861. Ruffini, R., Modarelli, G., Sferrazzo, R., & Turri, M. (2020). Is merit pay changing ethos in public administration? Cogent Business & Management , 7 (1), 1724703. Wood, D. (2019). Rebuilding America’s Military: The United States Marine Corps. The Heritage Foundation .

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