Compensation & Performance Management

The purpose of this chapter is to cover the basic concepts of compensation and benefits. The chapter starts by examining how compensation strategies are developed and then turns to the administration of compensation programs and how organizations evaluate their compensation programs. The reasons for benefit plans are discussed along with the different types of benefit plans typically found in organizations. Executive compensation is also discussed, and the chapter concludes with a discussion of legal issues associated with compensation and benefit programs.

Deliverable: Write responses to questions in a single paragraph format and include references for each answer.

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Several questions for students to consider regarding the information in the Unique Compensation at Wegmans case.

Why does Wegmans’ approach to compensation seem to work so well?

In your opinion, why don’t other grocery chains use the same compensation model as Wegmans?

Nucor is a steel company that has not laid off employees. Policies were established in the 1960s under the theory that workers would be more productive if an employer went out of its way to share authority with them, respect what they accomplished, and compensate them as handsomely as possible. If a shirt can turn out a defect-free batch of steel, every worker is entitled to a bonus, and can potentially triple their take-home pay. If a batch has defects and it reaches the customer, workers may lose up to three times what they would have received as a bonus. Everyone has incentive pay. This system works because employees share financial risks and benefits and are therefore a lot like owners.

Would you want to work under a compensation system like Nucor’s? Why or why not?

Why don’t more firms use approaches to compensation along the lines of Nucor’s model?

Chapter 10: Performance Appraisal and Career Management

The purpose of this chapter is to describe performance appraisal systems and their implications for how individuals manage their careers. The chapter also covers careers from other perspectives. The focus of this chapter is on performance appraisal, while performance management is considered in much more detail in a later chapter. Finally, the chapter will also look to summarize research that has been completed in this area.

Meijer is a family-owned discounting chain in the Midwest. Meijer instituted a system to track the time that checkout operations take with each customer and creates a baseline based on the number and type of items being purchased; the operator is scored for each transaction and needs to maintain performance of at least 95 percent of the baseline. Operators agree that they work faster with this system, but feel stressed; customers have mixed reactions as well

Deliverable: Write responses to questions in a single paragraph format and include references for each answer.

How would you feel about working under the Meijer system?

What other kinds of jobs might be amendable to this sort of performance measurement technology?

Darden Restaurants see employees as vital resources that give them a real competitive advantage. Darden has been named one of the best companies to work for in America by Fortune magazine. Employee turnover is about 20 percent lower than the industry average. The company offers extensive career planning to all employees

What factors have led Darden to take its current approach to employee development and advancement?

Darden owns both family-oriented casual restaurants such as Olive Garden and more sophisticated upscale places such as Capital Grill. What effects might this structure have on employee development?

• Why does Wegmans’ approach to compensation seem to work so well?,

• In your opinion, why don’t other grocery chains use the same compensation model as Wegmans?,

• Would you want to work under a compensation system like Nucor’s? Why or why not?,

• Why don’t more firms use approaches to compensation along the lines of Nucor’s model?,

• How would you feel about working under the Meijer system?,

• What other kinds of jobs might be amendable to this sort of performance measurement technology?,

• What factors have led Darden to take its current approach to employee development and advancement?,

• Darden owns both family-oriented casual restaurants such as Olive Garden and more sophisticated upscale places such as Capital Grill. What effects might this structure have on employee development?