Introduction
My proposal to introduce a merit pay system as an HR consultant would rely on the degree of variance in job performance and employee pay disparity. I suggest creating a merit pay system for the post of computer technician after analyzing the hypothetical scenario of the California Utility Company (CUC). While there are discrepancies in performance between excellent and poor performers in the position of a computer technician, the role of meter reader has high levels of work satisfaction, little absenteeism, and slight tardiness. This performance disparity suggests that to recognize and reward workers who go above and beyond, a merit pay system would be better suited for this role.
Discussion
A compensation scheme known as merit pay rewards employees based on their performance. This approach encourages workers to give their best efforts by giving them cash rewards. Performance assessment systems, used to evaluate an employee’s performance, are frequently linked to the outcomes of merit pay programs (Putra & Mannayong, 2022). A merit pay system is a method of remuneration that pays employees according to each person’s performance. Using such a system, CUC could reward high-performing computer technicians for their work and keep them by offering a competitive compensation package.
According to the job description for a computer technician, they install, maintain, and repair all business PCs and networks while working alone and being allocated to particular organizational departments. This suggests that a computer technician’s job demands a higher degree of technical knowledge and proficiency and that the quality of their work may significantly impact the effectiveness and productivity of the business as a whole. As a result, the performance of computer technicians is challenging to quantify, and the absence of pay distinction might demotivate high-performing technicians since their efforts need to be sufficiently acknowledged.
In the instance of CUC, the supervisors of the computer technicians claim that good and bad workers receive the same salary despite having different performance levels. Therefore, both good and bad performers at CUC receive recognition or rewards for their efforts or face the consequences for their lack of output. This suggests that it is essential to acknowledge the contributions of top-performing technicians and inspire them to keep going above and beyond their usual responsibilities (Lee, 2019). Several departmental managers have also expressed dissatisfaction with the length of time it takes to install and repair computers. These concerns show that a merit pay system can increase productivity and performance and that pay should be differentiated depending on individual performance.
On the other hand, the job of a meter reader is based on objective measurements and has less fluctuation in performance levels. Because the meter reader duty does not demand a high degree of technical experience or abilities and the work activities are relatively simple, there is less variety in job performance. Meter readers are evaluated based on the number of meters they read and the precision with which they capture data from meters. As a result, the merit appraisal system is optional in assessing reader performance due to the existence of objective measures.
A merit pay system may not be essential for meter readers because their success is based on objective measurements; performance bonuses, team incentives, or promotions may be better ways to recognize their accomplishments. These alternative approaches can encourage workers to acknowledge their contributions to the company and boost job satisfaction without the requirement for performance-based pay differentials (Golding et al., 2019). Moreover, the activities associated with this job function are relatively easy and do not call for significant technical knowledge.
Additionally, 84% of the meter readers believe management treats staff somewhat and speaks openly, and 89% are highly pleased with their salary. Consequently, a merit pay scheme may not be required for the post of meter reader. Notably, meticulous planning and implementation are required to adopt a merit pay system (Golding et al., 2019). First and foremost, creating a method for objectively evaluating an individual computer technician’s work is crucial. This review process should be transparent and shared with CUC’s computer specialists to guarantee fairness and transparency.
The expectancy theory is one theory of motivation that backs implementing a merit pay system. According to Lee (2019), the Expectancy Theory states that by connecting performance and incentives, merit pay may effectively motivate workers. According to the expectancy theory, workers are driven by the hope that their hard work will pay off in excellent performance and valuable rewards. Merit pay establishes a clear connection between achievement and compensation and supports this notion. Higher compensation is given to workers who do well, encouraging them to keep up their strong performance. CUC may motivate computer technicians to put in extra effort, take the initiative, and go above and beyond the call of duty by linking performance with rewards.
Conclusion
To conclude, a merit pay system would be the most suitable for CUC’s computer technician role since it will encourage workers to perform at a higher level and solve performance gaps between good and bad performers. The Expectancy Theory supports this strategy by combining performance with rewards to inspire workers. The company may increase output and performance while maintaining its reputation for paying employees fairly and offering top-notch customer service by introducing a merit pay system.
References
Golding, L. P., Nicola, G. N., Duszak Jr, R., & Rosenkrantz, A. B. (2019). Facility-based measurement in the Merit-based incentive payment system: a potential safety net for which most radiologists will be eligible. American Journal of Roentgenology, 213(5), 998-1002. Web.
Lee, H. W. (2019). Moderators of the motivational effects of performance management: A comprehensive exploration based on expectancy theory. Public Personnel Management, 48(1), 27–55. Web.
Putra, A. D., & Mannayong, J. (2022). Do Civil Servants’ Perceptions of Implementing a Merit System Influence the Personal Growth Initiative?KnE Social Sciences, 1424-1442. Web.