Compensation and Incentives, communications homework help

Assignment, Human Resources (HR)
Compensation and Incentives

Compensation and Incentives
Use information from lecture, your textbook, or any web searches necessary to
complete this assignment. Remember to use your critical thinking skills (you
may not find the exact answer in a text or lectureyou may have to think and
reason on your own). Also, remember to cite your sources appropriately (any
format is fineso long as its consistent and professional).
Scenario:
American Credit Union is a regional financial institution that has been growing
through acquisition in recent years. To lead this more complex business and
guide the credit union to greater profitability, American has hired a new CEO.
From day one, the new CEO believes that by incentivizing employees, she can
drive greater alignment between branches and improve the performance of each
individual branch.
Despite warnings from you, her VP of HR and Compensation, the CEO quickly rolls
out an incentive-based pay plan during her first month on the job. Currently
morale is low in the branches and employees are not sure they are being treated
fairly. The CEO has recently come from a manufacturing setting where piece-rate
incentives were highly motivational for line workers.
She develops the following plan:
Tellers will be paid by the number of people they assist each day using a
straight piece-rate method. Using company metrics, its determined that on
average a teller assists 20 customers an hour. The CEO knows that customers
hate lines and that happy customers create more traffic and referrals for the
credit union. By incentivizing tellers to work more quickly at all locations,
profit will increase. Thus tellers will now be paid according to a scale of how
many customers they support, with top performing tellers assisting >40
customers an hour.
You are the VP of HR and Compensation. Write a memo addressing the following 5
questions:
1. What are the major potential problems with this incentive plan? Feel free to
refer to potential problems with individual incentive plans in general and/or
straight piece-rate plans specifically.
2. Since employees are not sure they are being treated fairly, the CEO thinks
the compensation system should be kept secret from now on discouraging
employees from telling each other how much they get paid. Do you think that pay
secrecy is a good idea? Why or why not?
3. Design a new variable pay plan for tellers to address the issues you
identified in question 1. This plan could involve any type of incentive or
combination of incentives that could be used instead of a straight piece-rate
plan.
4. In a meeting, your CEO had also mentioned another option which she chose not
to pursue. In the alternative, employees would not have received variable pay.
Instead, they would have received
standardized pay adjustments based on seniority and cost-of-living. Present
this plan as a viable alternative to your proposed plan in question 3 and
specify whether you think the standardized pay increase should be based on
seniority, cost-of-living, across-the-board, or lump-sum increases and why.
5. Finally, give suggestions to your CEO as to which of the two plans (which
you presented in questions 3 and 4 above) she should implement and why.
REMINDERS:
1. Responses should follow the memo format specified in the syllabus, with the
online template as a guide (any memo format is fine, but the guide may help).
2. Responses should abide by the word limits in the syllabus (within reason).
3. Responses should be professional in tone.
4. Responses should be clear and concise.
5. Responses should be uploaded to Blackboard BY THE DUE DATE (no late
submissions).