PeoplePower is a company whose role is to provide labor services to its clients operating in the tourism and hospitality industry. The company offers its services to clients who need cleaning and maintenance services and this range from individual clients to business premises such as hotels. The company employees have the role of cleaning the clients’ premises, and the number of employees expected to carry out these duties vary depending on the clients who have asked for the services. The company has a total number of 12 management and administrative persons, 70 full time workers, 20 part time workers, and 160 casual workers. The clients pay the company 120 per cent of what they would pay if they got the services from their staff and the extra 20 per cent is for convenience and reliability to the company. This paper will describe the performance based compensation system that PeoplePower would use on all the employees, including the management and administration staff.
Theoretical Description and Justification
It is important for any company’s management to be concerned with the performance of its employees. The employees past performance also determines future performance thus the need for continuous enhancement of the employees performance. This means that, employers have the role of ensuring that they improve the performance of their employees, and this is greatly impacted on the compensation system that the company uses on all its employees. According to Sturman (2006), money is the overall incentive value that most of the employers give to their employees, but it is also important to note that the employees can improve in their performance if the management motivates them by linking pay to performance. This means that companies should consider providing incentives and rewards to employees from the top level to the lower level. This is a step towards creation of a successful organization whose goals are met. Mohamad (2009) asserts that, the organizations that provide incentives to their employees record a higher performance than those organizations that do not consider providing incentives to their workers. This is because incentives motivate employees and make them want to work even harder in anticipation for future promotions.
In a study carried out by Katou (2008), the organization performance refers to the Human Resource Management policies such as compensation and incentives, support, and resourcing, as well as to the management outcome in terms of the behavior, skills, and attitude. In addition to this, Bushardt (2011) states that practices that organizations may use to accommodate a new strategy within the business should be able to identify with the culture and organization rewards. This is a good strategy that will lead to the employee’s acceptance of the strategies, and thus may lead to changes in their behavior, which may also have an impact on the organization. The importance of having rewards as a strategy to...