The concept of the essays are problems with contingent pay plans and challenges of team performance management. (full descriptions attached)See (essay) attachment and provide a separate response to al

The concept of the essays are problems with contingent pay plans and challenges of team performance management. (full descriptions attached)See (essay) attachment and provide a separate response to al
POSSIBLE PROBLEMS ASSOCIATED WITH CONTINGENT PAY PLANS In spite of the potential positive impact of CP plans, we should be aware that not all CP plans work as intended. For example, in the 1990s, Hewlett Packard implemented CP plans in 13 separate sites; however, the plans were eventually abandoned in all but one. Hewlett Packard decided to abandon CP because the benefits did not outweigh the costs.15 Why is it that CP plans may not succeed? Consider the following reasons:16 • A poor performance management system is in place. What happens when a CP plan is paired with a poorly designed, poorly implemented performance management system, one that includes biased ratings and the measurement of unrelated performance dimensions? This situation may lead some employees to challenge the CP plan legally. Also, rewarding behaviors and results that are not job related is likely to cause good performers to leave the organization. Finally, those who stay are not likely to be motivated to perform well. • There is the folly of rewarding A while hoping for B.17 What happens when the system rewards results and behaviors that are not those that will help the organization succeed? Employees are likely to engage in these often counterproductive behaviors when this behavior is what will earn them the desired rewards. One such example is the hope that executives will focus on long-term growth and environmental responsibility when, in fact, they are rewarded based on quarterly earnings. Given this situation, what are these executives likely to do? Will they think in the long term or quarter by quarter? A second example is an organization that would like its employees to be more entrepreneurial and innovative, but it does not reward employees who think creatively. What are employees likely to do? Will they be innovative and risk not getting rewards, or will they continue to do things the old way? A third example is an organization that would like employees to focus on teamwork and a one-for-all spirit, but it rewards employees based on individual results. This happens in many professional sports teams. What are professional athletes likely to do? Will they pass the ball, or will they try to score themselves to improve their own individual statistics? • Rewards are not considered significant. What happens when a CP plan includes pay increases and other rewards that are so small that they don’t differentiate between outstanding and poor performers? For example, what happens when the top performers receive a 5% pay increase and an average performer receives a 3% or 4% pay increase? In this context, rewards are not viewed as performancebased rewards, and they do not make an impact. The message sent to employees is that performance is not something worth being rewarded. For rewards to be meaningful, they need to be significant in the eyes of the employees. Usually, an increase of approximately 12%–15% of one’s salary is regarded as a meaningful reward and would motivate people to do things they would not do otherwise. • Managers are not accountable. What happens when managers are not accountable regarding how they handle the performance and the performance evaluation of their employees? They are likely to inflate ratings so that employees receive what the manager thinks are appropriate rewards. Similarly, employees 268 Part IV • Reward Systems, Legal Issues, and Team Performance Management Chapter 10 • Reward Systems and Legal Issues 269 may set goals that are easily attainable so that performance ratings will lead to the highest possible level of reward. In other words, when managers are not held accountable, rewards may become the driver for the performance evaluation instead of the performance evaluation being the driver for the rewards. • There exists extrinsic motivation at the expense of intrinsic motivation. What happens when there is so much, almost exclusive, emphasis on rewards? Employees may start to lose interest in their jobs, which, in turn, can decrease motivation. In some cases, the extrinsic value of doing one’s job (i.e., rewards) can supersede the intrinsic value (i.e., doing the work because it is interesting and challenging). Sole emphasis on rewards can lead to ignoring the fact that employee motivation can be achieved not only by providing rewards but also by creating a more challenging, more interesting work environment in which employees have control over what they do and how they do it. • Rewards for executives are disproportionately large compared to rewards for everyone else. In many organizations, executive rewards are disproportionately large compared to the rewards received by everyone else in the organization. A study conducted by Pearl Meyer & Partners in 2004 revealed that the average compensation received by CEOs in major U.S. corporations was US $9.84 million, compared to an average compensation for employees in nonsupervisory roles of $27,485. The compensation for these CEOs was more than 360 times that of their employees! Such a large difference, particularly when the performance of the organization is not stellar, can lead to serious morale problems. CEOs should be compensated according to their performance, and an important indicator of CEO performance is overall firm performance (e.g., stock price in the case of publicly traded organizations). PURPOSES AND CHALLENGES OF TEAM PERFORMANCE MANAGEMENT Regardless of the extent to which a performance management system is concerned with individual performance, team performance, or both, the goals of the system are the same as those discussed in Chapter 1: strategic, administrative, informational, developmental, organizational maintenance, and documentational. In the specific case of a system concerned with team performance, one additional goal is to make all team members accountable so that they are motivated to have a stake in team performance. Many organizations have become more team based, but they have not changed their performance management systems to accommodate this new organizational reality, which presents a unique challenge. If the organization is based on teams but performance is still measured and rewarded at the individual level, team performance will suffer. In fact, some of the individual rewards may motivate people not to contribute to team performance and, instead, to focus on individual performance. In general, organizations that choose to include a team component in their performance management system must ask the following questions: • How do we assess relative individual contribution? How do we know the extent to which particular individuals have contributed to team results? How much has one member contributed in relation to the other members? Are there any slackers or free riders on the team? Is everyone contributing to the same extent, or are some members covering up for the lack of contribution of others? • How do we balance individual and team performance? How can we motivate team members so that they support a collective mission and collective goals? In addition, how do we motivate team members to be accountable and responsible individually? In other words, how do we achieve a good balance between measuring and rewarding individual performance in relation to team performance? • How do we identify individual and team measures of performance? How can we identify measures of performance that indicate individual performance versus measures of performance that indicate team performance? Where does individual performance end and team performance begin? Finally, based on these measures, how do we allocate rewards to individuals versus teams?
The concept of the essays are problems with contingent pay plans and challenges of team performance management. (full descriptions attached)See (essay) attachment and provide a separate response to al
Essay 1 My company deals in private equity, we are a global company with investments in all sectors. While I am in support role, there are others whose job is to bring in potential companies for us to invest in and make money.  Employees in support roles are paid on a traditional pay plan as indicated by job description (Assistants, HR, IT, Compliance, Legal and Accounting).  The remainder of the staff, the money makers, (Business Units (BU’s), Deal Teams, Top Management, CEO’s) are on a contingent pay plan, specifically profit sharing. This difference in pay plans has caused some issues. Looking at this situation first from the perspective of problems with contingent pay plans leads to creating questions with these concept elements. 1.  Are managers at TPG being held accountable regarding how they handel the performance evaluation of their employees? The is answer is no, employees are setting goals in our performance management system, Reflektive, that are easy to achieve, and most managers don’t care to even review these goals. Mind you we all have access to view each other’s goals at all levels, of those who have even bothered to put in goals, most are easy to achieve or super vague. I am embarrassed to say that I myself have set some pretty easy goals in order to receive a good performance review. 2. Are rewards for executives proportionate compared to rewards for everyone else?  Excuse my language, but f&*k no they are not! I am not even on a contingent pay plan and the disproportion upsets me. Members of the deal team and BU’s work incredibly hard to find companies, do their research in the field, bring in the companies, and work with them to get value and performance up. Their bonus is tied directly to the success or failure of those companies. Once a company does well and gets sold off, BU’s get between a 2%-3% cut, the CEO’s and top Management get the rest. Morale is a serious issue within the BU’s and Deal Teams.  My recommendation on the accountability issue would be 1. train the managers on effective goal writing, since would help them identify poorly written goals and could give managers the tools to help the staff with this deficiency. 2.  Using the completion of goals as a measurement of performance is not necessarily a bad idea, but the goals must be well written, actionable and in line with the organization. To be honest, when it comes to the disproportional rewards between the BU’s and top management, I would think the fix is simple: give them a bigger cut. I know how hard those teams work: stress filled days with basically no work-life balance. The burn out is very real in those positions, and as the Avon CEO was famously quoted, “People don’t do what you ask them to do; they do what you pay them to do.” Based our text a meaningful bump from 2%-3% to 12%-15% would make all the difference.              The second concept of challenges of team performance management is something that my organization really struggles with. There has been a big push towards the “team arraignment/mindset” in hopes of promoting the team culture further they are even renovating floor by floor, getting rid of offices and cubicles for one giant open concept.  What my company hasn’t renovated is the performance management system to accommodate this new ‘team concept’. My organization is clearly vested in making the team structure work, as they should since we have investments in companies worldwide, which require teams with members from different parts of the world. The question then is: how can my organization best shift from an individual to a mixed or team-based performance management system? While my organization has good grasp on what the mission is. They have not done their due diligence when it comes to job knowledge. (Which is evident now in existing system). My recommendation would be to first conduct a thorough job analysis of existing positions and corresponding KSAs. The next step would be to figure out exactly what they want each team to do to fill the team with the correct people. Essay 2 Contingent pay plans have both strengths and weaknesses.  There is a great deal of security in knowing exactly when you will get a raise and what that raise may be.  I have had a contingent pay plan in place at nearly every place I have worked.  At a place that has a strong union in place it is common for your pay to be directly tied to the amount of time you have been working at the organization.  The military also has a variant of this in place.  While all members of the same rank and time in service will be paid the same amount the progression of the member is determined by the member’s performance and their ability to prove their proficiency through various forms of testing. Our technician workforce is clearly operating under a contingent pay plan. Within the text there are 6 proposed problems associated with contingent pay plans: A poor performance management system is in place There is folly rewarding A while hoping for B Rewards are not considered significant Managers are not held accountable There exists extrinsic motivation at the expense of intrinsic motivation Rewards for senior executives are disproportionately large compared to rewards for everyone else In my organization we have had ongoing issues with managers not being held accountable for overly inflating the evaluations which has led to a devaluation of the intent of the reward itself.  One section might give across the board time-off awards or on the spot cash awards while other supervisors are much more judicious in their approach.  This has led to animosity across the organization that may only be quelled by holding the supervisor’s feet to the fire in hope they begin to appropriatelyreward members of their team.  We also experience times when the goals by which members are rated and rewarded are not lined up with the stated goals of leadership.  It is the supervisor/managers job to ensure organizational goals are synched with individual goals and that the rewards are there to affirm performance in accordance with those stated goals.  Most of my organization is broken up into flights and sections.  Within these smaller group’s individual rewards are not tied to team performance but still rely on individual performance.  In many cases these goals have not been re-vectored when team goals and the goals of the organization shift.  This creates a system in which many employees are driven solely to achieve their reward and not for the overall good of the organization.  It is critical that the method that members of the team are rated include a team-based measure such as communication, decision making, team leadership, and self-control.  Once these are present and in line with the stated goals of the organization, I believe we would see an increase in the overall functioning of the teams within my organization Essay 3 Performance management involves understanding the resources that are to be managed and what motivates each of them. Organizations use different motivational tools like offering rewards and creating challenging tasks. Currently, my employer is carrying out performance management by creating specialized tasks to teams. Performance management is about building the knowledge, skills, and abilities of people (Hearn, 2017). However, the management is worried about t the performance of the teams that will not make it because workers are likely to be demotivated and the production declines. To keep the entire teams motivated, the organization is devising means of rewarding all teams but with different pay. The problems of the contingent pay plans and the challenges of team performance management are interrelated in the sense that if the plan is designed within a form, whether it leads to the success or not the employees will adopt the activities and behavior and all it takes to earn rewards. With team performance, it becomes challenging if the work is done in the team and rewards are given to individuals (Heathfield, 2018). It is difficult to determine who contributed much to the accomplishment of the tasks. Bias becomes inevitable in the organization and workers are demotivated in the process. The two concepts are interrelated as they all result in demotivation of workers and failure to achieve success. Therefore, for the company to manage the performance, the generally accepted standards for measuring performance are to be put in place. Performance management is not annual review meetings (Heathfiield,2018). With such a measure, workers are weighed using the same criteria and bias will be reduced. It creates competition among the workers, and the organizational goals are achieved. With the company’s situation, it must adopt the benchmarking of all the employees on the same standards. If this company is to manage the performance potential, the employees must be evaluated on the same standards and rewards given when it is due.