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.Job security and salary should be based on employee performance, not on year of service.

Rewarding
employees primarily for years of service discourages people from maintaining consistently high levels
of productivity- Discuss. (10 marks)
There are several different views on compensation philosophy. In the basis of one of them lays the
concept that people job security and salary should depend primarily on years of services. Other is based
on the rewarding for performance regardless seniority. One may argue that rewarding employees
primarily for years of service discourages people from maintaining consistently high levels of
productivity. In general, I agree with this statement.
If employees are aware of guaranteed salary and job security, that can discourage them from trying to
achieve better results. More senior employees will more feel safe and sure about their job and salary.
And will not try to improve their skills or increase their productivity as in any case they will get their
reward for seniority.

Firstly, although loyalty is very important, at the end of the day overall performance and the results of
the company purely depend on the performance of the individual employees. So performance of the
worker and not his loyalty helps the company to reach its results, therefore his or her salary and job
security should be based performance. Moreover this approach helps to reward loyal employees as well
since typically employees who work longer in the company have more experience and therefore have
better performance.

Secondly, performance based salary and job security motivate all employees to work better. And the
company where I am currently working is a very good illustration for this point, Three two years ago
there were two groups of employees in the company, elder ones with eight to ten years of service and
younger ones with one to two years of service. Motivation policy was based primarily on the number of
year of service, so elder employees had no motivation to improve their performance, and at the same
time younger employees were completely demotivated because their high performance was not
rewarded. So atmosphere was pretty nervous and company's performance was very low. After changing
of the motivation policy everything changed dramatically, elder employees with low performance left
the company, elder employees with high performance now have even higher salary than before and
younger workers are motivate to work better. As a result the company is experiencing sustainable
growth.

In summary, while there are the arguments to be made for both sides, it is clear that there are greater
advantages for companies to reward their employees for their performance and not for years of
services. Otherwise workers will be focused on the keeping their jobs and not on the results, so
consequently overall company's performance and results will be impacted.

first , the job security should be provide to the employees only based on performance.the employees
once freshly entered would be eager to prove theirselves.when job security is assured,they will be more
motivated towards job.for example, if job security is not assured even after good performance and is
only with years of service, then performance will be normal for that period of time as they may be
eliminated any time.

second,salary is a boosting component for most of the employees.salary should be based on their
performance.for example, if employee is given a hike in salary just because of their performance, then
you may find more improvised involvement among all employees as a result of the above.

third,you cannot afford salary only by performance because experience plays avital role in any
company.for example,in the case of serious problems,experienced employees can handle it easily and
this will show a increased revenue for the company.

rewarding employees based on years of service would motivate them to stay within the company which
would help the company to guide the new employees and maintaining the standard and improving in
case of any problems.

finally,job security should be based on their performance,salary shoud be on performance and also
years of service.experience along with activeness will always yield good result.
Junior employees, on the contrary, may feel that in this environment their efforts won't be appreciated
and regardless the quality of job they provide, they will get less reward than more senior employees.
Even if the performance of the latest if lower. That may discourage them from showing higher levels of
productivity in favor of simply doing the job mediocre and waiting when number of years at service
will be enough to receive increase.
This argument talks about two important aspects related to the company, one is performance and the
other one is experience. Many people think that job salary and job security should be based on the
performance of the employee. On the contrary, there are some people who say that experience is
important rather than performance.
Many people believe that employee's job security and salaries should be driven mainly by their
performance and not by their loyalty. Other people think that employees should be rewarded based on
the years of service. The issue is a controversial one, but closer examination reveals that performance is
the most important criteria on which salary and job security should be based.

believe in productivity. The more productivity of the employee, the more efficient he/she is.
Productivity is the vital aspect of any organization. The employee should be rewarded for their work
and not for their experience.
Nevertheless, experience plays an important role, but if an employee has years of experience without
any efficiency in his work, then it is simply of no use. If an employee is rewarded for the work done by
him, then it encourages all the employees to work even harder. This results not only in effective work
force, but also takes the company to a higher step.
Secondly, there are many disadvantages if the employee is rewarded based on his experience. One
among them is that it discourages the other employees to work productively and forces them to get
focused in staying in the company, rather than maintaining consistency in the level of production. For
instance, if an employee has worked for ten long years, but has no skills in working effectively, is
praised in front of a fresh employee who is a hard-worker and efficient manager, then it is natural that
the fresh employee gets discouraged and waits for years to gain experience, rather than improving his
productive skills.
Some people think that employee performance should be the deciding factor for job security and salary.
Other people support the claim that job security and salary should be based on years of service. The
issue is a controversial one but a closer examination reveals that if employees are rewarded for years of
service and not for performance, then the good performers are discouraged.

Another disadvantage is that it develops many differences between the fresh employees and
experienced workers. They do not work together and results in mismanagement of team work in many
assignments of the company. Ultimately, it gives rise to losses and failures in the organization.
Therefore, I totally agree with rewarding the employees based on performance.
When analyzing the extend to which employees should be compensated based on their performance,
there are many topics to consider. On the one side are the multiple benefits this measure would bring,
but in the other side, are the effects of this mechanism on veteran employees of a company.
Nevertheless, at the end, I agree with the given argument because it constitutes a fair measure to
improve employees commitment and corporative success.
the author views job security and salary on performance is acceptable but experience should also play
some part in improving the company's revenues.i partially agree with the view of the author.
The speakers considers that employee performance rather than years of service should be the basis of
job security and salary. In my opinion, it's true that rewarding employees primarily for years of service
will discourage people from maintaining consistently high level of productivity to some extent. Yet we
still should take years of service into consideration when we decide an employee's salary.
Candor simply implies that people should have the courage of expressing their views. They shouldn’t
hesitate once before criticizing anyone or anything if they truly believe that that should have been the
other way around. Thus, I believe that it would be in favor of employees and employers if everyone
speaks genuinely. If you think you manager is wrong tell him, however keep in mind there are ways of
telling people they are wrong. Things missed must be presented as things forgotten, as someone has
said. A leadership is in saying no, not yes. It is very easy to say yes.
In conclusion, I would urge the organization to reward the employees who are good in performance,
rather than those employees who have experience. Based on the above reasons and examples, I think
performance is much more important than experience.

Employee is deserve to have good from the management if he has better performance.Form the
Goverment now a days the juniour and best employee who are freshers have a facing the various
problems concerning the job gaurentee and better salary.Because there is strategy of older people that
the people who are senior has better expeirence then junior.The company and institution is based on
high scale and high productuvity.And it is rule that who are deserving the best should be given the
best.Though they Don't have expeirence but if they can perform better and can give good progress then
they should be eligible.

Not for the salary but job guarantee is given as per the progress given by the employee.Now the world
is full of competitors and progress is necessary and for maintaining good employee it is necessary to
promote good to them. There is no importance of junior and senior because who is giving the better
will get best.Discouraging the employee by partiality will affect the company and employee.The person
will move form you institution for better one.Necessary is expeirence but no to much extent.It will
decrease the misconception but not increase the progress.For instance if one employee is senior and one
is junior and the productivity is good of junior one from several years then also he is getting lower
wages then the senior one this will discouraging the productivity behaviour of the person and will
affect the progress of the company.

But now a days the world has change,Now give chance to the newer one ,Change the opinion and give
chance to fresher and see that they can do better then the best than the junior.And they are deserving
and should be rewarding for job security and good salary because of high levels of productivity whcih
they are giving to company or institution.And comapny is also based and progressing on high
productivity of profit.

Organizations often have the flexibility to decide whether the system should be implemented wholesale
or in stages. If in stages, coverage can start with a single occupation or a limited group of occupations
as a pilot test, and expand later to additional groups of employees once the system has proven itself.
Starting with a small group of employees and later expanding coverage may enable the organization to
demonstrate successes before rolling the system out to the entire organization. This also provides an
opportunity to fine-tune the system and remedy any problems before they undermine its long-term
success. In contrast, wholesale implementation may be preferable when the agency’s intent is to convey
a dramatic organizational change message and foster a sense of solidarity. Implementing the new pay
system wholesale also avoids the confusion and increased difficulty associated with administering
multiple systems within an agency.

An essential point to keep in mind is that pay for performance is a powerful tool, which must be used
wisely. The axiom that “what gets measured, gets done” has particular relevance when measures are
reinforced by monetary incentives. For A Report by the U.S. Merit Systems Protection Board 9 Pay for
Performance Decision Points that reason, organizations must be very careful when deciding what to
measure and reward, because they are quite likely to get what they measure—which may or may not be
what they really want. In other words, agencies must be sure they are reinforcing desired behaviors
associated with the most critical outcomes and not encouraging counter-productive responses. An
effective performance appraisal system requires clearly defining expectations in advance, while
recognizing that priorities may shift along the way. Enumerating specific goals gives employees a clear
“road map” that they can use to decide how to allocate their time and efforts. Some jobs lend
themselves more easily to this type of direction, while for others it is more difficult to specify in
advance the precise accomplishments expected since the nature of the work is more complex or fluid.
In these cases, flexibility regarding anticipated outcomes can be incorporated in the evaluation process.
In the meantime, supervisors and employees should engage in continuing discussions so that
expectations can be shared, despite necessary adjustments. Additionally, when circumstances outside
the employees’ control determine outcomes, comparisons across employees in similar positions may
assist the supervisor with evaluating employee performance. In such circumstances, supervisors’
subjective judgments necessarily play a role in evaluating performance. While subjective judgments
cause some employees discomfort, supervisory discretion to evaluate performance is generally not
something that can—or should be—orchestrated out of the process. Use of multiple measures. Given
the complexity of work, multiple measures are often necessary to adequately capture accomplishment.
To decide what to measure, agencies need to ensure that they focus on important outcomes without
excluding other critical aspects of individual or organizational performance. One common problem in
this area involves organizations that set quantitative goals only to find a negative impact on quality
because important qualitative aspects of performance were not included in the goals. In other cases,
organizations accurately identified top objectives, but overlooked subtle, yet important, priorities or
activities. For example, by focusing employees’ attention only on part of a work process, such as
timeliness, an agency can unintentionally instigate cutting corners and unsafe activities, which may
serve to speed up the work process production at an unacceptable cost. While granting flexibility to
employees who are pursuing difficult goals may encourage innovation, safeguards may need to be built
in to ensure that necessary steps have not been inappropriately sacrificed. Additionally, it is important
that the reward system does not undermine desirable aspects of performance, such as teamwork, that
may not be explicitly recognized yet are important to organizational success. In situations that warrant
looking at multiple facets of employee performance, a “balanced scorecard”5 perspective may prove to
be very useful. Although notable 5 A “balanced scorecard” typically provides managers with a “fast but
comprehensive view of the business” by featuring “financial measures” complemented by measures on
“customer satisfaction, internal processes, and the organization’s innovation and improvement
activities.” Robert S. Kaplan and David P. Norton, “The Balanced Scorecard—Measures That Drive
Performance,” Harvard Business Review, 70(1), 1992, p. 71. 10 Designing an Effective Pay for
Performance Compensation System Pay for Performance Decision Points differences between the
private and public sectors impact what measures would be appropriate, a balanced scorecard approach
for the Federal sector could include measures such as quantity and quality of output, teamwork, safety,
and customer satisfaction, while focusing attention on the organization’s overarching mission.6
Alignment of organizational goals and measures. Supervisors frequently derive employees’ goals, at
least in part, from high-level organizational goals. This “cascading” of goals is useful for aligning
employee efforts with organizational objectives. To achieve this, employees need to understand how
their individual performance supports organizational outcomes. However, supervisors should also
recognize the value of a “bottom-up” approach that gives employees a voice in how they will be
evaluated and some discretion in deciding how best to achieve the results desired. Excessive top-down
control of goals, work methods, and job behaviors may stifle risk-taking and innovation by employees.
In contrast, rewarding an open exchange of information may result in improved organizational
outcomes over time as trust between the levels grows. Further, by aligning individual success with
organizational success, there is a greater likelihood that agencies will be able to encourage employees
to exert effort to achieve organizational objectives in concert with their personal goals. Standardized
(organizational) vs. tailored (individual) criteria. Choosing between standardized organization-wide
evaluation criteria and evaluation criteria tailored to individuals largely reflects an organization’s
philosophy regarding the relative priority of what should be rewarded. Having a clear, overarching
mission facilitates the use of standard criteria. Evaluating everyone against a common set of standards,
linked to high level organizational goals, also serves to focus the attention of all employees on the
highest level priorities. Likewise, using an agencywide competency model reinforces agency values
and promotes consistency across occupations and organizations. The downside of standardized criteria
is that with their generality, the evaluation measures may not seem applicable to everyone. For
example, front-line employees typically have a clearer line of sight to accomplishing mission objectives
than administrative employees, who support the mission in a secondary manner. In other cases, the
functions within an organization may be so diverse that it becomes difficult to use universal criteria.
Providing leeway for tailoring criteria may be more appropriate in many organizations. This
individuation of evaluation criteria may be by organizational subcomponent, occupation, grade level, or
other categories. Individual vs. team vs. organizational performance. Similarly, the level at which
performance is assessed for award purposes should reinforce the desired breadth of collaboration,
although this must be balanced with the need to be able to identify individual contributions. It is
important to consider whether cooperation should be encouraged within a discrete work unit or across a
broader context, such 6 Robert S. Kaplan and David P. Norton, “Transforming the Balanced Scorecard
from Performance Measurement to Strategic Management: Part I,” Accounting Horizons, 15(1), 2001,
pp. 98–99. A Report by the U.S. Merit Systems Protection Board 11 Pay for Performance Decision
Points as organizational components. For example, when employees work independently, it may make
more sense to evaluate them individually. However, when high levels of interaction and communication
are necessary, it becomes much more difficult to accurately measure the accomplishments of individual
employees. Rewarding only individuals when mutual support helps advance the organizational goals
may discourage cooperation and teamwork, to the organization’s detriment. In other cases, the
connection between individual performance and organizational performance appears relatively clear
and individuals tend to provide relatively similar levels of contributions. In these cases tying individual
fortunes to the organizational outcomes rallies the entire workforce to work together. Discord may
result if some people do not pull their weight, although peer pressure can often remedy these
situations.7 Organizations may also wish to supplement group measures with individual measures, such
as “teamwork,” to recognize personal efforts. For example, the company Johnsonville Foods has team
leaders and employees rate each member on “contribution to team goals, communication effectiveness
with other team members, willingness to work with other team members, and attendance and timeliness
at team meetings.”8 Focusing on employees’ overall contributions can increase flexibility and
encourage employees to focus on outcomes rather than the process of how to get there. However, the
best approach may be to include both specific individual goals and a broader view of contributions.
Along these lines, the Government Accountability Office (GAO) (formerly the General Accounting
Office) recommends linking individual performance with organizational goals to identify how daily
activities eventually support high-level organizational goals.9 Maintaining the connection to the bigger
picture provides employees with a bit more context than if they are only aware of their individual roles.
The link to broader goals also enables consideration of additional behaviors that may not be explicitly
described in a performance agreement,10 yet are important to the organization’s overall functioning.
Ultimately, what works best in an organization will depend on the nature of the workers and the work,
as well as the corporate philosophy. Some work groups are relatively homogeneous in their level of
contributions, while the performance in others varies so much that individual differences should be
recognized. Some work is clearly independent, while other projects require extensive collaboration and
teamwork. Finally, some organizations want to promote active cooperation, while others may
encourage a healthy level of competition.
A performance agreement is a document that describes what the employee plans to accomplish during
a performance rating period or a given span of time. Generally, a performance agreement is confined to
accomplishments and results, with little or no discussion of underlying tasks or work behaviors. 12
Designing an Effective Pay for Performance Compensation System Pay for Performance Decision
Points Possession vs. demonstration of competencies. Pay for performance plans may also vary
depending on whether they reward possession of desired competencies or require the actual
demonstration of these competencies. Some agencies forgo an outcome-oriented evaluation and instead
focus on the development of competencies.11 For example, an organization may reward employees for
possessing or obtaining certain competencies that the organization values because it believes it is useful
to have staff on-board who possess certain capabilities. As a result, once the employee has been
certified as possessing certain competencies, the agency may increase the employee’s pay whether or
not the employee is called upon to demonstrate these competencies during the performance appraisal
cycle. Other agencies compensate individuals only for the time that they demonstrate the competencies.
Agencies may take this strategy a step further by focusing on demonstrated competencies in relation to
organizational goals and performance.12 Under this strategy, employees must demonstrate that their
increased competence enables them to perform more effectively to support achievement of
organizational outcomes. For this system to be effective, an organization must clearly identify the
competencies that are required for optimal organizational performance and measure employees’
possession of those competencies. If done properly, advantages of this approach may include the
opportunity for ambitious employees to be compensated for developing themselves, which in turn
benefits the organization by increasing the depth and breadth of its talent pool. Consequently, career
progression can be tied more closely to competencies that support organization goals rather than to
tenure.13 Short-term vs. long-term goals. Performance appraisal cycles in the Federal Government are
typically one year in duration. As a result, short-term goals may be more easily assessed than long-term
projects, which may cross multiple assessment cycles. For assessments to be fair, the life cycle of
projects should be taken into account and proper credit given for progress towards the end goal.
Further, complex projects can usually be broken into intermediary steps to evaluate progress against
these milestones. Taking both short and long perspectives into account helps ensure that employees on
the extended projects will be rewarded for their achievements to date and not forced to wait until
project completion years down the line. Without intermediate reinforcement, employees might gravitate
toward quick-return assignments and neglect the more challenging endeavors.

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