Question: This week we are learning about the implementation of pay-for-performance plans to support effective performance appraisals and ensure that good work is appropriately rewarded to

This week we are learning about the implementation of pay-for-performance plans to support effective performance appraisals and ensure that good work is appropriately rewarded to employees. Organizations may develop different pay-for-performance plans for different jobs depending on the determination of the compensable factors for those jobs. Likewise, performance appraisal methods will vary according to the different jobs and work demands appraised in the review.

As an example, below is a pay-for-performance plan for entry-level administrative workers for their first 6 years of employment within an organization:

Admin Assistant I
Evaluation Score: Exceeds Expectations Meets Expectations Needs Improvement Salary Range
Base $40,000
Year 1 5% 3% 0% $42,000 - $40,000
Year 2 5% 3% 0% $44,100 - $40,000
Promotion to Admin Asst II or Termination
Admin Assistant II
Year 3 4% 2% 0% $45,864 - $41,200
Year 4 4% 2% 0% $47,699 - $41,200
Year 5 4% 2% 0% $49,607 - $41,200
Promotion to Admin Coord I or Termination
Admin Coord I
Year 6 3% 1% 0% $51,096 - $42,024

Analyze the table and the pay details of this rewards schedule. Describe the pay structure and what it is communicating to employees. What does the schedule do well? What could be done to improve the schedule? What types of questions or considerations would you pose to the developers of this rewards schedule?

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