UTLEY FOOD MARKETS

[Utley Food Markets]

[The instructor's name]

[The course title]

[The date]

Utley Food Markets

1. What a pay-for-performance system means to the Utley management?

This means the salary pay will be more structured mow at Utley management and the bonuses will now completely depend on performance which is justifiable. According to the case, formerly employees were compensated by a negotiated rate between management and the union. In case, it states that before the pay rise for union employees was across the board and negotiated between the union and Utley management and that the nonunion employees approached an across the board increase pegged to the union's negotiated rate. Utley food markets management needs to think carefully about the company's goals and how they are to be achieved to create measures and incentives that can orient its workforce (Belcher, 1996).

Changing to a pay-for-performance plan would mean disadvantages and advantages for Utley management. One advantage of implementing this program is that it could fix the suspicion and mistrust in the organization, because the employees have more control over their salary increases. Employees have power over their increases, because the better they perform, the higher their increases will be. The preceding plan made employees feel as if they had no power, because they were not included in the performance appraisals, which means they were not given feedback on they would improve. With a new plan in place, the suspicions of employees are reduced, because they are included in performance appraisals. Changing the pay-for-performance plan means recognition of individual performance, unlimited compensation, better retention, increasing productivity and lowering production costs, motivating performance to the individual, group, and organizational levels, and drive employees to work hard and more efficiently (Dixit, 2002).

Of course, there are also disadvantages in the pay-for-performance plan, such as employees may complain if problems with equipments or items out of their control get in the way of employee productivity resulting in lower performance levels. You also may attract employees who are interested in compensation, rather than increasing productivity and performance the business. Another advantage would be it rewards individual performance, rather than group performance or encourages employees to pay attention only to the work they are being judged on, resulting in the neglect of other relevant job components. This system may reward the outstanding performance by giving them opportunity to earn a higher salary (Dixit, 2002).

2. What changes will have to be made in the way the system operates now?

Changes that will accumulate with the new pay for performance program include management explaining the benefits of the program how it is for all employees not just union and nonunion employees. This will demonstrate how all employees are working together for the benefit of the organization. Another change that will need to be adjusted will be that supervisors will need to be effective and fair. Reading the case, it stated that when poor performers were given unsatisfactory ratings. The supervisors would respond quickly by ensuring that the employee received a larger than average raise to lessen the ...