a) ENTITLEMENT PHILOSOPHY vs. PAY FOR PERFORMANCE PHILOSOPHY i. Entitlement Philosophy The entitlement philosophy can be defined as assumes that individuals who have worked another year are entitled to pay increases, with little regard for performance differences. The entitlement philosophy can be seen in many organizations that traditionally have given automatic increases to their employees every year. Further, most of those employees receive the same or nearly the same percentage increase each year. Employees and managers who subscribe to the entitlement philosophy believe that individuals who have worked another year are entitled to a raise in base pay, and that all incentives and benefit programs should continue and be increased, regardless …show more content…
A performance-oriented philosophy is followed; no one is guaranteed compensation just for adding another year to organisational service. Instead, pay and incentives are based on performance differences among employees. Employees who perform well get larger compensation increases; those who do not perform satisfactorily receive little or no increase in compensation. Thus, employees who perform satisfactorily should keep up or advance in relation to a broad view of the labour market for their jobs, whereas poor or marginal performers should fall …show more content…
Team-Based Reward Team compensation is typically used when teamwork is mission critical. In technical fields such as software development, there may be several interdependent teams creating a final deliverable. These teams are judged corporately as to speed and accuracy, assuming each member of the team is required to complete the task on time and at budget. The compensation of the group is typically scaled in percentages of the maximum pay scale depending on when or how well the team completes the task. If the organisation succeeds with setting a goal that all the employees in the group feel that they want to contribute to and that they together with the group are able to achieve, the organisation can with help of group rewards decrease unhealthy competition. We believe that group based reward system are a way to organisation to implement team spirit as a part of the workday. The most expressed advantage with using a team based reward system is that it promotes cooperation between the employees in an organisation. One common reason for an organisation to choose to reward on a group level can be because if the work is being done in group it is easier to reward the group as