Question

CASE STUDY

Financial incentives play a key role in improving employee performance, so the company manager must be committed to developing appropriate incentive plans that will encourage employees to be more targeted and improve their performance. Managers should also pay full attention to their employees and their work process. It must motivate its employees towards tasks. Financial incentives are highly effective in changing short-term behavior but are much less effective in changing longer-term behavior. In Australia Government is committed to assisting women and their families to make well informed choices about work. Women’s economic participation has a positive effect on economic growth which is good for all Australians.

Direction: Read the below questions and answers accordingly
a.    Managements compensation plan can motivate and retain their employees. Explain on the various compensation policies that has to be followed by the organization to motivate the employees. Give examples.
b.    As Women’s economic participation has a positive effect on economic growth , point out the justified factors on why the women employees get lower paid in organizations with examples.  
c.    Do you agree the financial incentives motivate the employees more than the non- financial incentive? Examine with reasons types of incentive that could motivate on the employees.
d.    If an organization in Bahrain recruit a candidate from Australia, what are the factors should the managment consider in fixing the compensation package for the employee.
e. If the employees from Australia is being relocated, list the current trends in having expatriate training for the candidate to fit with the organization work culture.

Answer 1

Answer a: An organisation always try to make an effective compensation plan to motivate their employees towards work. Various compensation policies to motivate employees are as follow:

• Pay salary and incentive: Companies pay a mix of salary and incentive to their employees. Salary given to employee for performing task that require to do job whereas incentive is given to motivate employee to meet their goal and give opportunity to increase their earning.
• Keep incentive part simple: A good compensation plan is that in which incentive part measures not more than two or four performance factors.
• Determine what competitors are paying: Another way to keep employee motivate and retained is by paying equal or more than competitor. Adjust compensation plan according to your competitor's compensation plan.
• Provide non-financial rewards to employee: Besides salary and incentives, employees are motivated by other form of recognition. For example, establishing an annual trip to reward employees.

Answer b: Causes of Gender pay gap i.e., women employees get lower paid in organisation are as follow:

• Segregation: It refers to inequality in pay that associated with occupational earning. For example, Labour market also reinforces the inequality pay.
• Work life balance: Women choose to take parental leave than man. This also known as Motherhood Penalty. And due to which women job choices are affect market. This is also a main reason in Gender pay gap. For example, Women take lower pay job for more flexibilty compared to higher paying jobs.
• Gender norms: It refers to adopt specific gender role. For example, Jobs that are primarily seen as women focused job such as Nursing.

Answer c: No, we donot agree that financial incentive motivate employee more than non financial incentive as it varies from employee to employee. Some employee want financial incentive whereas some get motivated by non financial incentive.

Incentive is a motivational factor that help to improve employee performance. Incentive can be financial i.e., measured in monetary terms and non financial i.e., non monetary value such as status, job security etc.

Types of incentive that help to motivate the employees are as follow:

• Bonus: It is the money that offered to employee over and above the salary. It is usually linked to good performance reward.
• Productivity linked wage incentive: Incentive that based on productivity at individual or group level. For example, if a employee get 100 rupees for producing 100 pieces in a day and if he produce more than 100 pieces , he is paid 10 rupees extra per piece.
• Employee Participation: Involving employees in decision making activity. It also helps in motivating employees.
• Career Advancement opportunity: It also helps in motivating employees as everyone have desire for career growth and gets promotion as an appreciation for work.

Answer d: Factors that manager should consider in fixing compensation plan for employee, who is recruited from Australia for Bahrain Organisation are as follow:

• Localization: it refer to salary that based on host country pay scale.
• Nationality of parent company.
• Competitor strategies.
• Understanding the assignment for which employee is selected
• Deciding compensation approach
• Understanding different Tax laws

Answer e: There are various trends in expatriate training. Providing not only pre-departure cross cultural training some companies also provide an overseas assignment training. Employers use returning employees to cultivate the global mind set of their home office.

• Training focuses on impact of cultural differences and awareness of their impact on business.
• Training also aims to make employees understand how attitude influence behaviour.
• It also provide factual knowledge about target country.
• It also provide skills like language and adaptation skills.