Employee Compensation in a High Performance Work System
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Employee Compensation in a High-Performance Work System
An important part of a high-performance Work system is the compensation package. Because, in todays fast-paced, rapidly growing business environment, survival truly does depend on being the fittest. For companies, this means performing at the highest level possible to be more flexible, more competitive, and ultimately, more successful than the rest of the field. Since high-performance work systems ask many different things from employees, it is hard to come up with one single approach to pay that works for everyone. Special attention should be made to the design of the organizations compensation plan, making sure it supports organizational goals and does not bankrupt the company.
For the past several years, companies have strived to change the way work is performed and business is conducted. So, many companies have been experimenting with alternative compensation plans that link pay and performance to employee incentives. For example, for Saturn employees an average of 10 percent of their pay is linked to goals for quality and training (Bolander, Sherman & Snell, 2001).
Meeting today's competitive demands is a lot easier when firms adopt high-performance workplace practices that are linked to employee compensation plans. These are practices that let front line workers make wise decisions...