Performance standards for today’s knowledge-directed workers
Peer Responses:
Discussion 1 Instructions: Describe the relevance of performance standards for today’s knowledge-directed workers, and how their use will result in a more competitive compensation and benefit strategy.
Response Instruction: Respond to two of your peers’ posts using the reading material and 1 scholarly source to support your claims.
Student 1:
Performance standards explain the specifics of the expectations for the job description. “Performance standards for each position are the guides that express the particulars of expected job performance to both the manager and the employee” (Boe, 2018). It also explains when, in what way, and how the employee should do the job. Performance standards will help managers in determining if the employee is right for the job or if the employee needs to move up in the company. Performance appraisal will come into place with performance standards. This will determine if the employee is fit for the job and how the employee needs to improve. Performance standards will help the organization in determining if an employee is fit for the job and what the employee’s strength and weaknesses are. This is not only beneficial for managers but employees as well because the employee can determine if they are fit for the job as well. This will help with a more competitive strategy because managers need to keep up to date with different changes and performance standards needs to be reviewed to make sure the job description has not changed and if employees need to move around the organization so that the organization can meet their goals.
Student 2:
An effective organization should set performance standards for employees to work and perform according to the expectations of management. Performance standards provide the employee with specific performance expectations for each major duty (Indiana University Human Resources, 2018). Those performing the work are the knowledge-directed workers. In today’s workforce, knowledge-directed workers are those who acquire, manipulate, interpret, and apply information in order to perform multidisciplinary, complex and unpredictable work (Reference for Business, 2019). Knowledge-directed workers are the educated workforce performing the day to day operations in an organization based on the performance standards set by the leaders of the organization.
The use of knowledge-directed workers results in a more competitive compensation and benefit strategy. An organization needs to take into consideration the changing nature of the workforce. The workforce continues to change with demographics across age, gender, and race (Weathington & Weathington, 2016). At a fundamental level, people in organizations receive pay according to their “value” (May, 2019) Compensation and benefits for a woman in her 30’s might be different for a man entering the workforce in his early 20s. While equally educated and qualified for a position, the man in his 20’s might be looking for compensation and a benefits package that includes paying off his student loans. The woman in her 30’s might be seeking more paid time off and a flexible work schedule to care for a family. Organizations need to be mindful of individual desires when it comes to compensation and benefit strategy in talent recruitment.
Discussion 2 Instructions: Compare and contrast when it would be preferable to motivate employee performance through short-term incentives versus long-term incentives, and vice-versa.
Response Instruction: Respond to two of your peers’ posts using the reading material and 1 scholarly source to support your claims.
Student 1:
Job incentives are not only important to the employers, but the employees may feel more empowered when you give them certain incentives. People that hold a high value for rewards would enjoy incentives, especially when it comes to pay. A key aspect of incentive pay is that it does not permanently increase an employee’s salary: The pay is extra. It is earned for specifically completing an objective, such as meeting a sales goal (Weathington & Weathington, 2016, Section. 6.5, para. 3).
Group and Individual incentive plans are the two categories that the pay can be broken down into according to Weathington (Weathington & Weathington, 2016, Section 6.5, para 6). Groups incentive plans are great for an organization that wants to reward a group of people for working hard and completing a task, for example, beating a deadline well before the due date that would save the company thousands of dollars and manpower. A monetary reward would suffice and would also benefit the employers as well because instead of raising everyone’s pay for working hard, they could give out a lump sum of money which is just a one time payment rather than paying more in the long-term. Daniel Hansen did a case study on within a large financial company and he figured out the same outcome as stated earlier. An alternative is to offer incentives based on group productivity in the form of either profit sharing or gain sharing plans. A profit sharing plan simply shares a fraction of the profits the company earns with the workers, usually on an annual basis (Hansen, 1997). An individual incentive plan would obviously be more beneficial if you want to reward someone for his or her individual effort. A good example of this would be someone who gets paid based off commission sales like those who sale insurance policies.
When I hear short-term incentives versus long-term incentives I automatically think about those short and long term goals that we often hear about growing up. I think both have their pros and cons. Short term incentives are going to give you that quick turn-around but the issue is, if whatever has been delivered in the short term does not have any substance to last awhile, then after a while you could assume money may have been wasted. Long-term incentives may be more costly but usually when things have a long-term structure, it was carefully strategized to last awhile and have some substance. Overall, performance-based long-term incentive plans have considerable new accounting advantages under FAS123(R), but that is not the main reason to consider using them. They provide an excellent way to improve the efficacy of incentive pay (Ericson, 2005).
Student 2:
“Short-term incentives are used to create a focus on short-term or immediate goals, and align rewards with individual and business performance. Long-term incentives are typically designed for executives who make strategic decisions for the company.” (Wagewatch, 2014, para 3). Short-term incentives are compensation for achieving a short-term goal for a company or an individual. These plans usually have a set period of about one year. These incentives can be yearly spot rewards, extra personal time, or profit-sharing plan. Long-term incentive goals are usually in a set period of about three years, and the incentives include; stock options, extra vacation time with pay, cash bonuses. These strategies are an important issue for employers and employees as well. Employers want to meet goals, deadlines and increase revenue. Employees can help achieve these goals by working hard and being acknowledged by their employer when offered incentives. “In the workplace, an understanding of motivation is critically important because not only do we want to initiate behavior, we want to instigate and sustain the right behavior (Kerr, 1975).” (Weathington & Weathington, 2016, Ch 3.1, para 2).
“While the use of cash-based short-term incentives (STIs) is well-documented at large, publicly traded corporations, it is also becoming a common way to motivate and reward employees at private companies, especially at small and midsize firms as well as at nonprofit employers, new research shows.” (Miller, 2018, para 2).
For an employee to receive a short-term incentive, they should reach the goal that has been previously set by themselves and their manager. An example; reaching their sales quota for the last quarter, having perfect attendance for an entire quarter, or receiving and obtaining a high GPA through an employer-paid educational program. For an employee to receive long-term incentives they could show an ROI from a program the owners invested in, show an increased revenue for the company they work with, or assist the company through a bank audit and prove a profit margin.
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