Compensation & Incentives

Compensation and Incentives

Introduction

Compensation plan creation and implementation is one of the most important functions of Human Resource Management. For organizations to retain the best talents effectively, compensation and incentives are the most major motivator. This is important for any organization as for efficient and effective management and employee productivity, extrinsic rewards are the main motivators.

Performance management systems, and resultantly performance evalutaions, are esstential to effectively manage human resources. Performance evalations help in identifying the performance of all employees with regards to their own job descriptions, departments, punctualiy, adherence to organizational rules, and also evaluate their affiliation with the organizations culture. This helps review the overall performance of an individual employee, and helps in the assessment of rewards or reinforcement required in line with the same for the Human Resource departments (Abedi, Pp. 90). In addition, performance evaluation can also effectively raise employee motivation, however a very strict assessment policy can also decrease it. An organization's performance is dependent upon, although not in entirety, on the performance of its employees. Thus, performance management system plays a vital role in the development and success of the organization, as a whole. In light of a US-China joint venture currently under way, it will require taking into consideration the new business environment, different culturual implication and other factors that differ between the host and investing nation. Therefore, this paper will deal with the identification the different critical issues that need to be addressed in developing, implementing, and evaluating a performance management system for this US-China joint venture.

Apart from the above mentioned issues that an organization must address, there are certain other factors that need to be considered by an organization. Lindholm (1999) states the fact that an appraisal system should always be in accordance with the one adopted by the host country, in order to account for cultural specifics and norms. For this very reason, it is viable for an organization to study the culture of the host country, before implementing any kind of a performance management system.

It is important for an organization to consider the socio-cultural, economic and political factors in setting up a performance review system, as the organization should always be aware of the fact that performance might be low in economically underdeveloped and politically unstable regions and countries. In the case at hand, it can be said that there are no issues related to political stability and therefore, such ...