AB203: Human Resources Management – Section Number
Month Date, Year
Introduction
Incentive pay is crucial to the success of any company. In a firm where the staffs are satisfied with the amount of payments they receive, their performance is advanced, which results in increased returns for a company. For a company that have a remuneration procedure that is imbalanced, with senior people earning way more than the others, it may result in the lack of motivation among the juniors that may yield poor results.
Review/Analysis of the Case
Question One;
In the Company, the CEO has a very high incentive pay amounting to $18.1 million while the average workers earn minimal pay as low as $25,800 per year. There is a very significant gap between the payments, and this does not make sense in the business. Paying the CEO very high compensation and leaving junior workers with small remuneration brings an imbalance and may make the staff demotivated to work (Gerhart, Hollenbeck, Noe, & Wright, 2009). Payments between the CEO and junior staff cannot be same, but the scale should be balanced so that everyone can enjoy the equal success of the company.
Question Two:
For Wal-Mart, compensation between Mike and the store workers should have equity for satisfaction to be achieved. The CEO is ranked 82nd highest paid in the US while the staffs are lowly paid yet the company is getting good returns. Equity discourages giving some people more compensation to others while they put the same effort (Gerhart et al., 2009). For the company to achieve equity, compensations should be done using percentages of the returns for the firm. The CEO is expected to earn more than junior staffs, but the percentage increase when the company makes profits should be similar since they have all put the effort.
Question Three:
Summary and Conclusions
For the success of Wal-Mart Company to remain in future, there is a need to ensure the pay-scale between the CEO and junior staff is harmonized such that they all share in the success of the firm. When there is equality and equity in the payments all the staff get as per their ranks in the company, there will be the motivation that will increase the performance.
References
Gerhart, B., Hollenbeck, J., Noe, R., & Wright, P. (2009). Fundamentals of human resource management. (3rd ed.). New York, NY: McGraw-Hill.
