Pay-for-Performance Programs

Research Assignment 2: Week 6

Background:

Pay for Performance in America’s public schools is an extremely controversial issue. Although the process has made inroads in business and is a means to help determine promotions, pay, and retention, pay for performance has not been consistently well received in the Public school systems. There are some successful examples where teacher pay has been linked to student test scores. In Minnesota for example, some districts have stopped giving automatic raises for seniority and base 60% of all pay increases on employee performance. In Denver, unions and school districts designed an incentive program where teachers receive bonuses for student achievement and for earning national teaching certificates. On the other hand, some plans have not worked. For example, Cincinnati teachers voted against a merit pay proposal and Philadelphia teachers gave their bonus checks to charity rather than cashing them. It appears that having teachers involved in planning the incentive system is one key factor to success. The same can be said for all incentive plans – if employees do not buy into them, they will not work.

Assignment:

You have been asked by the organization’s senior leadership to explore the practicality of implementing such a program for your organization.

Questions to Research:

1. How could an organization measure the effectiveness of their pay-for-performance plans?
2. From an employee’s perspective, what are the advantages and disadvantages of using a pay-for-performance plan?
3. From an employer’s perspective, what are the advantages and disadvantages of using a pay-for-performance plan?

Instructions:

• The assignment is due Sunday, 11:59 PM EST
• Submitted as an MS Word attachment in either a .doc, .docx, or .rtf format.
• Your paper should be a minimum of five (5) full pages of double spaced content in 12-point font. This excludes your title page, abstract (0.5 pages), and reference pages.
• Include a properly formatted APA cover page, an abstract, a properly formatted Introduction and Conclusion, and a minimum of 5 references to support your work, and 3 of those 5 need to be peer-reviewed.
• Please refer the assignment tips for your Week 3 – Assignment 1 for additional guidance in researching and preparing your paper.

The course objectives addressed by this assignment are as follows:

• Explain the various classifications of rewards.
• Describe competency-based compensation programs.
• Describe relative standards in the performance management system.
• Discuss ethical issues in HRM

Answer preview

As much as implementing the pay-for-performance plan is strategic, an organization should evaluate its effectiveness constantly. Worth noting, there have been controversies regarding the effectiveness of this incentive plan in America’s public schools. In institutions where this incentive plan has worked, teachers have increased students’ performance. However, in schools that have failed in implementing the rewards system, low performance and motivation levels have been recorded. Hence, there is a need for measuring the effectiveness of pay-for-performance plans to ensure that they enable the institution to achieve the projected goals (Darling-Hammond, 2010). One measuring strategy that the management in a public institution could implement is using surveys to determine the response rate of employees and managers regarding the pay-for-performance plan.

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