Annual Salary Actions, Essay Example

Linking annual salary actions to performance reviews is beneficial because it encourages the employee to perform well. I believe that without salary incentives, employees will be less likely to perform their best. This is a fair compensation system provided that the employee is provided with a base salary that was agreed upon at the time of hiring. It wouldn’t be fair to alter this base pay due to negative performance. Rather, good job performance should be awarded with a certain percent increase of the base salary, while bad job performance will not be awarded with any raise. This way, long-term employees will not feel confident that their salaries will continue to increase and will continually feel inspired to do their jobs correctly and well.

Employee salaries should be tied to their performance review, but a good performance should only impact salary increase to the extent that the employee feels rewarded for their good work. However, if an employee is doing significantly more work than their co-workers, it would be suitable to reward them for this work as well. The major pros of this system is that a majority of employees will be inspired to work harder and the employees that are doing more work will feel that their efforts are rewarded and continue to do a good job. However, the primary con of this system is that employees who do not earn raises based on their performance will feel discouraged and be more likely to leave their position with the company.

Generally, managers in health care settings do a good job of addressing employee performance and behavior problems. However, this is more effective by addressing problems as they occur rather than during a yearly performance review. To make this system more effective, it may be more beneficial to have quarterly performance reviews. The most common behavior or performance problem in health care settings is failing to report issues to managers. Rather, the employees will try to handle the problems themselves and may not have enough knowledge to rectify the issue.

References

HBS. (2006). What’s to Be Done About Performance Reviews? Retrieved from http://hbswk.hbs.edu/item/5563.html

Saint-Cyr Y. (2009). Should performance reviews be linked to compensation? Retrieved from http://www.hrinfodesk.com/preview.asp?article=29166