Pay System to Motivate Employees
Thought experiment on pay inequality
Imagine that you can choose to work at any of three companies. The work you do will be the same in each company, and all other aspects of the job are similar among the companies, except for the pay system. In each company, you will be paid at the end of the year based on your performance. Each company has 100 employees.
Company A: The average pay is $50,000 per year. The top performer will make $55,000, the bottom performer will make $45,000, and everyone else will make somewhere between $45,000 and $55,000 depending on their performance.
Company B: The average pay is $50,000 per year. The top performer will make $75,000, the bottom performer will make $25,000, and everyone else will make somewhere between $75,000 and $25,000 depending on their performance.
Company C: The top performer will make $1 million, the second-best performer will make $500,000, the third-best makes $250,000, and everyone else will make $35,000.
Questions:
Which company (A, B, or C) would you prefer to work at, and why?
Which pay system would motivate you to work the hardest? Which one would motivate you the least?
Which pay system would motivate most employees to work the hardest? Which one would motivate them the least?
Where are co-worker cooperation and employee-management relations likely to be the best?
Week 3 Discussion: Forum #3
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Week 3 Discussion: Forum #3
Which company (A, B, or C) would you prefer to work at, and why?
Since companies A, B, and C embraced a performance-based pay system, I will embrace Company C. However, C would be efficient in cases where the objective is a short-term commitment because it invites the risks of stress and burnout that can affect productivity in the long run. However, from a long-term perspective, I would embrace Company A because it does not invite increased pressure to deliver, which can adversely affect my productivity as I strive to earn additional compensation.
Which pay system would motivate you to work the hardest? Which one would motivate you the least?
Company C’s pay system would motivate me to work the hardest, while company A would motivate me the least. Company A would motivate me the least because the base pay does not increase significantly regardless of the commitment or dedication to organizational objec...