Article Review

Pay Systems

Review the article, “Management Without Consequences: 24% of Companies Pay Bonuses to Failing Performers.” Compensation and benefits is a very important part of the strategic plan of an organization.  Compensation and benefits are designed to attract, motivate, and retain employees and to achieve an advantage over competitors.  Financial forms of compensation include direct pay (including base salary) and variable pay (also known as incentives or pay-for-performance). Indirect pay is more frequently known as benefits, such as paid and unpaid time off, insurance protection, and retirement programs. Lifestyle benefits or quality of work-life (QWL) issues are very important for achieving a competitive edge in efforts to attract and retain top talent.

  • Describe the relationship between an organization’s business strategy and its pay systems. Demonstrate an understanding of a pay model.
  • Discuss a goal or objective of your current organization. What aspect of the company’s compensation system aligns with this goal/objective?
  • Discuss specific outcomes in the pay model an organization could impact through the use of quality of work-life (QWL) programs.  What do you think is the most important outcome resulting from these programs?  How can an organization formally evaluate whether a QWL program has been effective?

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