Task 6: Market Pay; Pay Structure; Team-Based Pay

Task 6: Market Pay; Pay Structure; Team-Based Pay

A pay structure is a system that defines different levels of pay based on employee’s role, competence, effectiveness, or value to an organization. The structure ensures that employees are paid appropriately for the service offered and what they are worth to the institution. An employee pay is determined after various considerations and factors like employee’s length of employment, productivity, rank or status, or difficulty of the specific work done (Breza, Kaur Shamdasani, 2018). For example, an employee should be paid a higher salary when promoted to a senior position compared to previous pay.

Pay structures help keep track of the payment of employees as they advance and improve in their work area. These records are important because they help the management to consider essential factors for growth of an organization. Pay structures also help to clearly show different pay for different jobs (Breza et al., 2018). This in turn helps compensate an employee for his or her specific role and contribution in the organization.

Pay structures should be effective for easy management of a business. They benefit the organization by helping bring order in the payment process. This is important because it is the role of the management to ensure employees are paid their wages and salaries in time which is a motivation for productivity.

Pay structures also help govern the range of pay for people. In the case of team based pay, pay structures not only ensure people are paid but also remind them of the set goals.  An employee is aware of the pay range and is reminded of what is expected for one to get a higher wage, thus they will all work towards the set goals which in turn helps in growth of the organization.

Effective pay structures are designed by looking at both the internal performance within an organization and external market. Most of the organizations dwell more on external market while designing pay structures which is more productive because it not only brings about equity but also pauses challenge to organization to ensure better and timely pay (Magnan & Martin, 2019). Comparison of wages from other companies helps an organization adjust accordingly and enhance competitiveness with the external market.

In the case of new employees or even employees already in the organization, pay structures help provide information on wage opportunities available in an organization. This not only motivates employees to work towards better pay but also provides opportunities for new employees to come and add value to the organization (Weil, 2018).

In addition, pay structures help the management to put forward a rational and analytical way of rewarding employees. This should be harmonious and often in order to motivate employees equally towards achieving set goals in an organization. This is achieved when the system of rewarding is openly provided by the management and thus employees can motivate each other or just themselves to work harder to meet the set goals (Lazear, 2018).

Employees involvement and feeling part of the process is very important for an organization. This can be achieved when payment is well structured and employees know how well they can better their skills. This helps to promote fairness in the organization because employees get to understand their role and what is required of them to get better pay and thus understand that no one is being favored but rather it is all by merit (Magnan & Martin, 2019).

Task 6: Market Pay; Pay Structure; Team-Based Pay