WORKPLACE INDUSTRY RELATIONS IN ORGANIZATION

1. Performance related pay system is a system of human resource compensation provision where employees are paid the salary equal or proportional in respect with their job done. It can sound a very effective method as it motivates employees for high performance and sincerity on the job. But if seen from a HR professional point of view, we can find this method as considering the labor force or the workforce as a tool for producing goods and services. Human resource management on the top priority believes in considering the workforce as an asset and not a liability, if performance related pay is applicable, it will consider employees and laborers as a commodity, a resource for production. Therefore it is not extensively practiced in industries. [Issac, 2001]
2. Performance related pay to some extent increases the productivity of the employees and also motivates them for extensive work and no conflicts but on the same time, it decreases employee’s sense of belongingness towards the firm, it makes the labors mechanical. The quality of work life cannot be made better with performance based pay as high performance may attract employees for long working hours and higher monetary greed thereby damaging their personal life balance.  To some extent performance based pay is just a method of work intensification as it brings extra-ordinary zeal in the worker for earning more and more. Thus it could be said that performance based pay increases productivity but decreases sense of belongingness of the employees and also intensifies their work life to the extent that their personal life gets disrupted. Some factors to be considered while following this method of compensation are: relativity of pay with similar natured job, productivity distribution like allocation of job type, number of working hours, type of technology being used should all be considered. [Solomon and Podgursky, 2012]
3. Performance based pay schemes bring employees a lot of monetary motivation and it has relation with employee’s participation in decision making of the firm also. To some extent it can be said because employees are highly responsiveness towards their job and type of work and may also like to participate in decision making because it may directly affect their performance but it has been seen that performance based employees are less likely to consider organization as their family or home and are subject to high attrition. [Issac, 2001]
4. In my own workplace, the payment system is based on job responsibility assigned to the employee irrespective of the performance of the employee. In my organization, performance of the employee is linked with appraisals, promotions, rewards and recognitions but pay scheme is not linked with performance till consecutive two years but if in consecutive two years performance of the employee is underachieved, then employee is given notice for improvement or resignation from their respective jobs. Performance is measured every year basis and with the help of that evaluation, employee’s rewards and recognitions are tagged and the pay scale of employees increase every year as per their performance appraisal evaluation but the pay being provided throughout the year or so is free from affects of performance of the employees. Consequences of such change can be negative for employees as they may inhibit such change to take place but if it has to be followed, then the firm has to make necessary changes in HR policies like employee performance measurement on short notices, new training sessions for short term performance gains, after-effects of the performance based pay and its transparent communication to the employee force.
5. In order to improve employee participation in workplace, one needs to understand the psychology of the employees on the job and satisfying those needs as per employee level and designation. For example employee satisfaction needs for top level management will be self actualization and self esteem satisfaction, for executive level employee, it will be monetary benefits and rewards like bonus, holidays etc. for workforce participation, management should increase employee engagement programs like management games, counseling with seniors or HR professionals, mentoring and discussing with team players about the queries and dissatisfactions, if any? Apart from this the management should increase rewards and recognitions for good work and easy monitoring and evaluation of the employee performance should be done so that they should be communicated about their loopholes on regular intervals and not exactly just at the end of one year. [Ekert, 2010]

References:

1. J.E. Issac, 2001, performance pay, journal of industrial relations, 43(2), 111-23
2. Lewis C. Solomon and Michael Podgursky,  pros and cones of performance based compensation, viewed on 8^th may, 2012, <http://web.missouri.edu/podgurskym/articles/files/Pros_cons.pdf>
3. Jonathan Eckert, 2010, performance based compensation, viewed on 8^th may, 2012, <http://www.tapsystem.org/publications/eck_tif.pdf>

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