MGT 462 Lecture Notes - Lecture 8: Merit Pay, Equal Employment Opportunity, Organizational Commitment

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13 Nov 2020
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Many names; variable pay programs, at risk pay, incentive plans, etc. People used to think of pay as primarily entitlement. Pay-for-performance plans move toward pay that varies with some measure of individual or organizational performance. Many surveys on pay-for-performance omit the starting point of all these plans, merit pay. Variable pay used to be primarily used for management, now prevalent for lower levels in an organization. Based on organization, team/business unit, and/or individual goals. 99% of organizations use some form of short-term incentive plan and the use of variable pay in general has increase. Greater interest invariable pay can be traced to two trends. Increasing competition from foreign producers forces u. s. firms to cut costs and/or increase productivity. Today"s fast-paced business environment means employee must be willing to adjust what they do and how they do it. Most common performance basis is a combination of corporate, unit, and individual objectives.

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