Accountant at a manufacturing company
For an accountant at a manufacturing company, the most suitable type of pay would be base pay. The main reason why I believe that base pay is much more appropriate is because the remuneration incentive does not determine the accountant's output at the company. For the accountant, base pay would serve as a long-term incentive; thus, ensuring that he/she can undertake his/her expected roles and responsibilities. Base salary creates a perception of long-term stability and security within the specific position that one operates (Chowdhury & Schulz, 2017). As an accountant, it would be vital for him/her to develop a sense of security within the company, which would be defined by the base salary offered. From this view, what is clear is that the idea of having a base pay would be most viable in ensuring that the accountant remains motivated and satisfied.
A salesperson for a software company
For a salesperson working for a software company, the most suitable type of pay would be incentive pay. Imberman & Lovenheim (2015) take note of the fact that incentive pay is often associated with increased productivity, as the employees are incentivized towards meeting specific targets or goals. In this case, the management would be able to set a sales target that the salesperson would be expected to attend. If he/she meets this target, he/she is given an incentive pay, which increases the need for having to ensure that he/she works hard to achieve this target. The ultimate impact expected is that this will help create a much more effective platform through which to improve on the company’s success levels.
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A chief executive officer
For a chief executive officer, the best type of pay would be incentive pay, as this would help towards ensuring that he/she remains loyal to the company, as well as, ensures that he/she adopts strategies to assist in objective achievement. Incentive pay is often characterized by the fact that it seeks to pave the way for a higher level of loyalty, especially when dealing with top-level managers, while also trying to ensure that the managers focus much of their attention towards achievement of strategic objectives (Steinbach, Holcomb, Holmes Jr, Devers, & Cannella Jr, 2017). A chief executive officer is considered as a senior manager; thus, meaning that he/she has a pivotal role to play in ensuring that the strategies adopted within the company reflect on its objectives. Additionally, having an incentive pay would also help towards ensuring that the officer would seek to push his employees towards higher performance levels.
A physician in a health clinic
For a physical in a health clinic, the most appropriate type of pay would be base pay. As a health professional, the physician's output cannot be determined based on the services that he/she is providing. Consequently, this makes it hard in seeking to establish the criteria for incentives to be offered. However, the physician would have a long-term commitment to the clinic if he/she would feel appreciated through the base salary offered. That means that the clinic would need to quantify the role of the physician, as part of the clinic, in a bid to determining the base salary to offer. The outcome is that this will also have great value towards ensuring that the physician remains motivated towards his/her role in health service delivery at the clinic.
Pros and Cons of Incentive Pay
The crucial first advantage of incentive pay, as part of its link to individual performance, is that helps in promoting motivation. By adopting incentive pay, the overall possibility of increasing motivation among own employees is notably high; thus, ensuring that the employees work hard to meet their respective goals and target. The second advantage of incentive pay is that it is help towards promoting productivity among employees. Employees are given incentive pay when they meet specific objectives, which means that the employees would work notably hard in seeking to ensure that these targets are surpassed. Lastly, incentive pay also plays a crucial role in promoting teamwork among employees. Incentive pay would allow employees to understand the value of collaboration in a bid to creating a conducive environment for their achievement.
The main disadvantage of incentive pay is that it creates a shift in employee performance, considering that it seeks to create a highly competitive work environment. Incentive pay is driven by the ability to meet specific targets, which creates the need for unhealthy competition among employees in their bid to match their respective destinations. Companies would be able to address this disadvantage by ensuring that the employees work as part of teams, especially in seeking to ensure that they work together, not against each other. By working in groups, the employees would be able to provide support for each other with the aim being towards ensuring that specific goals and objectives are achieved. The long-term effect that this would have is that it will help establish a clear front for improved organizational performance.
References
Chowdhury, S., & Schulz, E. (2017). Association of Professional's Base and Incentive Pay with Human Capital in Small High-tech Firms. In Academy of Management Proceedings (Vol. 2017, No. 1, p. 17226). Briarcliff Manor, NY 10510: Academy of Management.
Imberman, S. A., & Lovenheim, M. F. (2015). Incentive strength and teacher productivity: Evidence from a group-based teacher incentive pay system. Review of Economics and Statistics , 97 (2), 364-386.
Steinbach, A. L., Holcomb, T. R., Holmes Jr, R. M., Devers, C. E., & Cannella Jr, A. A. (2017). Top management team incentive heterogeneity, strategic investment behaviour, and performance: A contingency theory of incentive alignment. Strategic Management Journal , 38 (8), 1701-1720.
