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Recognizing Employee Contributions

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Employees deserve recognition for their hard work, creative ideas and commitment to the company. “Employee recognition is the timely, informal or formal acknowledgement of a person’s or teams behavior, effort or business result that supports the organization’s goals and values, and which has clearly been beyond normal expectations” (Wiley & Kowske, 2012). It is important to show employees your appreciation for their work so they can understand how they are valued by the company. The effect of this action helps to increase employee satisfaction and productivity. Rewarding employees for their dedication and work, shows that you care about them and not just what they can do for you. Propose two methods an HR professional could use to determine incentive pay. Specify the principal manner in which the proposed methods take into consideration individual, group, and company performance. Justify your response.

The main goal of employee incentives is to motivate employees to achieve their highest performance possible. Human Resources must first determine the needs of the employees. Once those needs have been assess, then they must decide on an incentive plan that focuses on those particular needs. “Incentive plans must showcase what the potential may be if the purpose is fulfilled” (Kishore & Rao, 2013). For this particular company one method that could be used to determine incentive pay is by basing it on individual’s performance. First you would identify who your top performers may be. Human Resources should communicate with them and inform them of the incentive plan for performance bonuses based on sales for the quarter. Even though this is an individual based performance plan it can also be applied to groups within the organization. For example, the internet sales team of the company would participate in a different form of performance bonuses based on the teams internet sales achieved. For individuals, it motivates them to self-satisfying goals set by the company and shows them that they assets. For groups, it can help to encourage and motivate teamwork. In regards to the company’s performance, this plan enforces an increase in the profits of the business.

Another option available is to pay individuals based on group performances. Due to the fact that efficiency is an important aspect of this position I believe that the company should promote gainsharing. “Group incentive program that measures improvements in productivity and effectiveness and distributes a portion of each gain to employees” (Kelly, 2010). This method takes into consideration the individual because helps them to look at themselves and how to improve not only their performance but the group’s performance as well. This will also encourage employees to align their activities to match the organizations goals. Examine the core legal requirements affecting employee benefits in today’s competitive environment. Determine the legally mandated benefits that the company must currently offer its employees.

“Human Resources management must comply with all employment, health and safety and other relevant legislation applicable to the jurisdiction where the organization operates” (Matkin, 2010). Companies must administer these required benefits to employees that are mandated by law. When business decide to structure the organization in regards to benefits, it is important to be aware of current laws that may limit some of these choices. A few of the legal requirements that have an effect on benefits includes tax treatment of benefits, antidiscrimination laws, and account requirements of benefits. The tax treatment of benefits involves determining what benefits are taxable and which ones aren’t. Certain benefits like health insurance or retirement plans receive a tax deduction but must still be reported on the income tax form. The antidiscrimination laws in regards to benefits ensure that all employees, male and female, be offered the same benefits at the same price.

None of these benefits should discriminate against any of the employees based on their age, race, sex, or disability. Lastly the accounting requirements for benefits entails, ensuring that the proper amount of funds are set aside to finance benefits for the organization. For reporting standards these funds must be represented as future cost. There is also a mandatory set of requirements for benefits that must be offered to a company’s employees. Some of the benefits have a stipulation that employees receiving this benefits work at least full time. Also certain benefits will not be offered to employees if the staff is under 50 people These particular benefits include social security benefits, unemployment insurance, workers compensation, unpaid family and medical leave, and over time.“ Recommend at least three additional benefits that the organization should consider providing to its employees. Suggest at least two important concepts that a company must consider when designing benefit plans. Provide a rationale for your response.

“In today’s modern world, a respectable salary isn’t enough to retain valuable employees over the long term” (Yanadori & Cui, 2013). It is important for companies to have benefits in place that meets the needs of current employees as well as attract new ones. Since we are a retail company it would be beneficial to offer current employees the benefit of discounts on company’s merchandise. Also it is important that the company encourages employees to develop new knowledge and skills, so training classes and tuition reimbursement is another option that should be offered. Lastly, health wellness is a trend right now, so employers should offer employees discounted prices to gyms within the establishment. It is important that companies consider certain concepts when designing a benefits plan.

The first concept that must be looked at is ensuring that the company has the necessary funds needs to implement these plans. In order to make these decisions there must be a comparison done to evaluate the current prices within the market. If the funds are not available or are low, then there needs to be a limit on the plans you choose or not choose at all. Next, these options should be compared to the employee’s current values and expectations. Employees tend to value benefits more if they can use them. It is also important to know that with employees their values and expectations differ with each person. Assess the efficiency of common techniques for effectively communicating compensation and benefit plans to employees. Support your answer.

“Effectively communicating with employees about their benefits must be a year round effort and should not be confined to blurbs of information only during open enrollment periods” (Kupritz & Cowell, 2011). The purpose is to provide employees with enough information so that they are able to make the best decision regarding benefit options. Human Resources should create a summary of benefits, which provides employees with a short description to each benefit at all times. Also human resources can communicate on different aspects of the benefits by sending email updates, providing employee surveys, or even having benefit fairs to provide information.

Ensuring that more than one communication methods is being used provide the opportunity to remind employees of their compensation packages. “A competitive benefits package creates an employer of choice environment which will translate into a competitive advantage in attracting and retaining the most qualified employees in your industry” (Kupritz et al, 2011). Suggest two ethical risks of making incentive pay a large portion of employees’ total compensation. Propose two recommendations for ways the company might mitigate or reduce these risks.

Incentive programs are meant to improve on the employee’s creativity, engagement and productivity. When employees meet these expectations of the company, they in turn are rewarded as such. These rewards could also lead to unethical behavior within the company. If incentive pay is based on the sales revenue of the company an issue may occur where employees tend to over exaggerate their performance in order to achieve this for the goal. This would negatively affect compensation because in turn reported sales would be based on a lie. Another issue that may occur if incentive pay is largely apart of compensation, is executives communicating to employees the company’s performance that involves their compensation. There are ways to try and reduce the risk associated with incentive pay. One way is to empower your employees so that have a sense of well-being. This can be established by including them in the decision process related to incentive pay. Along with empowerment, companies should also encourage their employee’s to be creative thinkers.


Kelly, K. (2010). The Effects of Incentives on Information Exchange and Decision Quality in Groups. Behavioral Research In Accounting, 22(1), 43-65. doi:10.2308/bria.2010.22.1.43 Kishore, S., Rao, R. S., Narasimhan, O., & John, G. (2013). Bonuses Versus Commissions: A Field Study. Journal Of Marketing Research (JMR), 50(3), 317-333. doi:10.1509/jmr.11.0485 Kupritz, V. W., & Cowell, E. (2011). Productive Management Communication. Journal Of Business Communication, 48(1), 54-82. doi:10.1177/0021943610385656 Matkin, D. T. (2010). Designing Accountable and Effective Economic Development Tax Incentives. Public Performance & Management Review, 34(2), 166-188. doi:10.2753/PMR1530-9576340202 Wiley, J., & Kowske, B. (2012). Book highlight-The power of recognition. Global Business & Organizational Excellence, 32(1), 75-84. doi:10.1002/joe.21465 Yanadori, Y., & Cui, V. (2013). Creating incentives for innovation? The relationship between pay dispersion in R&D groups and firm innovation performance. Strategic Management Journal, 34(12), 1502-1511. doi:10.1002/smj.2071

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