Statement

Based on Chapter $4($Incentive Pay$)$ and Chapter $5($Person$-$Based Pay$),$ companies should carefully consider implementing incentive pay programs to establish a clear link between employees' job performance and the rewards they receive, aligning them with the company's competitive strategy. Therefore, to remain competitive, companies should explore the adoption of person$-$focused pay programs. This includes reasons why companies should embrace person$-$focused pay programs, the different types of person$-$focused pay programs available, how person$-$focused pay interacts with merit pay and incentive pay systems, the benefits and drawbacks associated with person$-$focused pay programs, and how well these programs align with the company's competitive strategy.

Requirement:

$1.$ There is currently a tendency among business professionals to endorse the use of incentive pay plans. Identify two jobs for which individual incentive pay is appropriate and two jobs for which individual incentive pay is inappropriate. Be sure to include your justification. $(5$ Marks$)$

$2.$ Based on your understanding of person$-$focused pay concepts, identify at least three jobs for which this basis for pay is inappropriate and compare and contrast person$-$focused pay and job$-$based pay. Discuss the advantages of person$-$focused pay to employers. $(5$ Marks$)$

Scenario: $(10$ Mark$)$

Person$-$Focused Pay at Mitron Computers:

The technicians at Mitron Computers are integral to the company$$s success. Mitron builds custom personal computers for several office supply chains. The company$$s ability to build a quality product to specifications in an efficient manner allows Mitron to hold an advantage over competitors. However, recently the company has experienced some delays in shipments, and the plant manager is growing concerned.

Mitron works directly with the retail locations of the office supply chains to meet the needs of customers ordering computers with specific capabilities. A customer at a retail store orders a computer with certain components, and the order is sent to Mitron to be fulfilled within a specified time frame.

The technicians work in teams to build the computers to the desired specifications. It is a complex process, and the technician$$s ability to build the computers efficiently has helped build Mitron$$s reputation as a quality producer of personal computers. Depending on the specifications, building each computer can involve between $10$ and $18$ different steps.

Most technicians have the knowledge and skills to complete one or two of the steps, but some technicians can complete multiple steps. The technicians that can complete multiple steps provide the company greater flexibility in scheduling and ensuring the computers are built on time. Each step in the building process involves intricate procedures, and a technician must take the initiative to attend training to learn each new step. However, there is little incentive for the technicians to attend the training. The technicians work in teams to build the computers, and they are paid an hourly pay rate plus a team$-$based bonus payment for each computer that is built on time with no defects.

The teams are composed of technicians that have complementary skills, but the company has had some delays when a team member with the skills to complete a certain step is absent or already working on another computer. This problem occurs often as few technicians have the skills to complete the higher$-$level steps in the building process. Most technicians do not want to take time away from their work to attend the training as they will likely lose some of their team$-$based bonuses.

Holly Turner, Mitron$$s human resource director, has been asked by the plant manager to examine the technician$$s pay structure to determine if a change in the structure could affect the technician$$s efficiency. Holly is confident that the more steps each technician can complete, the more efficient Mitron will be in building computers. Therefore, Holly is considering implementing a person$-$focused program that would tie the technician$$s pay to the steps in the building process that he or she is trained to complete.

By doing so$,$ Holly believes the technicians will be more likely to attend training and learn the new skills. With more technicians trained to complete the higher$-$level steps in the building process, the teams will be better prepared to meet shipping deadlines.

Questions:

$1.$ What are some advantages of a person$-$focused pay system at Mitron? $(2\mathrm{.}5$ Marks$)$

$2.$ What are some disadvantages? $(2\mathrm{.}5$ marks$)$

$3.$ If you were the HR director for Mitron Computers, what would you recommend solving the company$$s problem of the shortage of higher$-$level skilled workers? Justify your recommendations. $(5$ Marks$)$