Installing An Incentive Scheme

Installing a scheme of payment by results must proceed on the following lines:

  1. Define the objectives of the payment system and, if necessary, challenge the assumptions held about the purpose of the system and how it should operate.
  1. Collect facts about the existing system-the pay structure, the types of payment schemes in use the number of people paid under each arrangement, the levels of earning in different occupation and the make up of earning, including overtime payment.
  1. Analyses the circumstances in which the payment system operates.
  1. Compare the existing or proposed arrangement against the criteria for evaluating systems listed above:
  • Comparing the results achieved with the objective of the system under such headings as ability to attract and retain staff, effect of productivity effect on management-employee relationships.
  • Identifying particular problem areas where the system is producing anomalies in pay or earning between occupations or units, where the requirements of the equal-pay legislation are not met or where rates of pay are not competitive with local going rates.
  1. Consider conducting an attitude survey to obtain the views of workers, rate fixers and supervisions about the present system and the changes need to be made.
  1. Conduct as required with unions and employees on the arrangements and what needs to be done about them.
  1. Conduct pay surveys as required to establish local market rates.
  1. Conduct job evaluation studies as required in consultation with unions to establish correct relatives and to provide the basic data for designing a logical pay structure.
  1. Develop pilot tests and install any revised or new individuals, group or measured day-work payment systems that may be required in consultation with unions.
  1. Ensure that information in available which will enable the effectiveness of a revised pay system or structure to be monitored.

HR-Professionals 12 Compensation 12


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