Scenario
You are the Training and Development Supervisor for a private, mid-sized company that researches and produces products for the cosmetics industry. An international cosmetics brand, Marylion, has recently bought your company, and most of the employees of your company will now work for the international firm. All of the scientists in the research and development department of your old company are being retained by the acquiring firm.
In your old company, scientists were compensated based on their job titles and years of experience in the company. However, in their new roles, they will be compensated differently. Marylion has a different pay system for scientists in R&D than for other employees. Scientists are compensated using a person-focused pay model. Specifically, a stair-step model of competency-based pay is used.
As the scientists in your old firm are not familiar with this new model of compensation, it has been decided that you, as the new Training and Development Manager for Marylion, should provide an onboarding training session. The training session is to help the scientists understand how their new compensation system will work. You have been asked to create a training agenda and outline of the training session to be reviewed by the HR manager prior to hosting the training.
Instructions
APA Format
6 Scholarly Citations
I've attached some notes to help out with the research
The training agenda should include each topic with key points and an area provided for note taking. The training outline should be formatted with bulleted points for each topic, speaker's notes, and include the amount of time needed to cover each topic.
1. Prepare a training agenda for participants and a training outline for the presenter that:
2. Explains the concept of a people-focused pay model.
Compares a competency-based pay model to a job-based pay model.
3. Explains a stair-step model of compensation.
Analyzes the advantages of a people-focused pay model for scientists at Marylion.
4. Discusses the impact of people-focused pay on employee motivation through promotions and career paths.
5. Provides attribution for credible sources used in the training agenda and outline.
Introduction and Scope
Establishing a defined pay structure is a business’s essential function. Equally significant, understanding the components of the various types of compensation is critical to creating a reliable and attractive compensation package for Marylion Corporation and its current employees. An analysis of the matter will not only help the company retain its employees but will also aid the firm in attracting new scientists. In this regard, of the two famous pay structures in human resources, it is apparent that the people-focused compensation model would be more appropriate and beneficial to Marylion and its newly acquired employees as opposed to the initial cosmetics company’s job-based pay plan. The main focus of the training session is to help the acquisition’s new employees understand the shift and change their understanding and perspective of pay as an entitlement. The plan explains the implication that compensation is a reward earned for initiating and implementing valuable knowledge and skills relevant to the job.
Training Session Agenda: Key Topics and Related Concepts
People-Focused Pay Model
Marylion Corporation’s adoption of a people-focused pay model is meant to represent significant innovations in the field of compensation. People-focused compensation systems reward workers for acquiring and mastering specific skills, knowledge, and job-related competencies rather than for showing successful job performance (Kamola, 2019). Further, this approach allows managers and other employers to examine and objectively evaluate the efficiency of every employee’s professional performance and contribution to achieving the organization’s central objectives, mission, and vision. In addition, advocates of person-focused pay models provide different reasons that prompt firms to seek good competitive advantage, including the notion that it fosters technological advancement and elevates healthy global competition. This structure of compensating workers often comprises three primary pay programs: pay-for-knowledge, skill-based, and competency-based pay. Milkovich et al. (2014) assert that in some cases, organizations combine two or more elements of people-focused compensation programs with the promise of fulfilling more enhanced job performances through merit and incentive pay in the future.
Comparison of Competency-Based and Job-Based Pay Models
Competency-based pay structure is a type of compensation that renumerates an employee based on their skills, knowledge, and experience on the job, position, and responsibility. Greene et al. (2014) state that a competency-based compensation plan ensures that workers reach the company’s pay rate by constantly improving their skills and expertise in the field. On the other hand, a job-based compensation model focuses on an individual’s title and experience. Teimouri et al. (2018) report on this model’s implication that instead of recognizing and identifying a person’s skill set, management uses job-based models to determine the amount of money a person deserves based on their varying capacities and responsibilities. One similarity between the two pay structures is that they both encourage and motivate employees to give their best in their respective positions (Kamola, 2019). In addition, a competency-based program does not prioritize seniority when it comes to compensation; it identifies with the chain of command and the sense that directives originate from a particular administration level.
There are notable differences between competency-based pay structures and job-based models. The main difference between the two lies in the context of employee potential. On the one hand, Jacoby (2022) alludes that a job-based program rewards an employee according to their positions and titles, limiting their ability to realize their capabilities to move up the chain of command and seniority within the organization. On the other hand, a competency-based pay plan gives employees the autonomy to elevate their significance and increase their pay potential by improving the mastery of their knowledge and expectations (Greene et al., 2014). The other significant difference between the two is in the distinction between skills and competencies. More precisely, a skill is quantifiable, whereas a competency is not quantifiable. A skill is quantifiable because it is technical or non-technical, and one can demonstrate it by presenting their qualifications and professional experience (Mendy & Rahman, 2019). In contrast, one cannot measure a person’s competency as it comprises behaviors and attitudes that enable one to accomplish their responsibilities effectively. An example of competency is the analytical ability, initiative, problem-solving and negotiation skills, and data-based decisions that contribute to prosperity at work (Berlo, 2018).
Stair-Step Model of Compensation
The Stair-Step Model pay model is one of the original and widely applied marketing compensation methods. As Berlo (2018) posits, in this unique form of differential bonus, Marylion employees ought to understand that this plan consists of various phases with a specific set volume of target sales. In this case, management expects all the employees within a particular step to meet its requirements and achieve the target. The organization would then pay a worker upon accomplishing the objectives of the stage. When one reaches its target, the distributor is appreciated and promoted to the next level (Jacoby, 2018). For example, the new international cosmetics company might enroll three people who have done $100 in volume, which means that each employee qualifies for a 3% compensation or bonus. If the three workers generate $300, they might be eligible for an estimated 6% bonus, prompting the organization to pay the employees an additional amount equivalent to the difference between the initial 3% and the 6%.
The beauty of the MLM Stair Step pay program is that Marylion would be liable to pay the commission only when a designated group member achieves their sales target. This implies that the firm would be completely assured about the earnings because the commission is a slight portion of the full amount that the employee or member has yielded for the representative company (Jacoby, 2018). The management and the company make big while leaving out a small but agreed-upon amount for the employees. Another considerable perk of the Stair Step plan is that the newly acquired international cosmetic company employees find, assess, and recruit potential employees to the chain to help meet the objectives of the present level in a short period (Mendy & Rahman, 2019). In addition, the model is one of the most effectual as it makes group members aware of the progress and achievements of other group members because the whole group gets paid when it achieves its allocated target sales (Berlo, 2018). In the wake of this, the model not only multiplies the company’s sales, making more money and doubling the company’s benefits but also acquires additional loyal employees.
Advantages of People-Focused Pay Model
Case studies and analysis suggest that firms and employees enjoy the advantages of this pay program because well-designed people-focused compensation programs provide both employees and employers with significant advancements to traditional pay systems. For the employees of Marylion Corporation, a type of pay model will give them substantial and valuable job security and enrichment opportunities (Kamola, 2019). In this context, job enrichment refers to the notion that the pay structure will provide a job design approach that develops more interesting and intrinsically motivating working environments. Additionally, the program will enable the workers to be more flexible while guaranteeing their professional growth by giving them a chance to showcase their knowledge and skills with the company’s utmost interest (Greene et al., 2014). This occurs, for instance, when Marylion Corporation uses person-centered systems by paying more for the scientists who put more effort into accomplishing their responsibilities and exhibiting maximum passion and performance at work. In essence, it makes employees more motivated and self-dependent in the workplace.
People-focused pay models push employees out of their comfort zones by cultivating a culture of continuous personal improvement. Once Marylion Corporation establishes and embeds this program in its system, it would be more challenging to navigate one’s responsibility in a different direction than initiating the tempo that requires one to give their best in what they do (Teimouri et al., 2018). Competency-based compensation model, one of the components of the people-focused pay program, is good for business because it develops and enriches trust between employees and their employers at all levels of an organization. In view of encouraging corporate transparency, the model enhances employee engagement at its core, which helps the company retain hardworking staff members (Putra et al., 2021). This particular pay structure ensures that the administration maintains its transparency, which gives employees a precise and reliable insight into what the company expects of them to get a promotion and a raise. Further, the absence of the seniority factor gives employees the freedom to gain essential leadership skills and pay more attention to detail.
Impact of People-Focused Compensation Model
Various factors and dimensions of employee motivations, ranging from the worker’s personality, behaviors, and attitudes, affect their performance. However, intrinsic and extrinsic rewards have a vast impact on employee performance. According to Milkovich et al. (2014), while intrinsic rewards include the constant need to achieve a milestone, the need for recognition and power, inherent social satisfaction, and honor, extrinsic rewards comprise monetary terms and other tangible forms of compensation. An employee’s performance in a specific responsibility is directly proportional to such tips, and the value and severity of the reward depend on their skills and the type of activity they conduct at the organization level. In the wake of this, people-focused compensation models influence an individual’s motivation only if the monetary rewards satisfy an internal need that supports their intrinsic achievements (Mendy & Rahman, 2019). In Marylion Corporation, for example, a pay increase is determined by the employees’ ability to produce high-quality cosmetic products in bulk. In this case, people-focused pay programs motivate employees to combine and try out different ways of production with the understanding that if they do an excellent job in achieving the incentive, the company will compensate them accordingly.
People-focused compensation programs clarify and establish which competencies are integral to improved job performance and productivity. This phenomenon changes employees’ perception of their responsibilities and improves motivation (Milkovich et al., 2014). For instance, if an employee at Marylion elevates the number of products and inquiries they handle in one day, it is because they have learned and enhanced their ability to multitask or have adopted a more efficient way of improving attention to detail, which helps them to solve issues more quickly. As Kamola (2019) illustrates, people-focused compensation models are a more reliable option for increasing employee motivation because they value the employees’ commitment to the task. The skill-based pay system provides employees with the guarantee that if they refurbish their behavior and mold their competencies to match the company’s needs and demands, they will get a promotion and set their careers on a more positive and brighter path (Greene et al., 2014). Fundamentally, this approach will motivate the scientists by benefiting them with intrinsic rewards through the autonomy to make relevant decisions, get significant positions due to their top-notch leadership skills, and be an essential part of the organization’s primary policy structure.
Conclusion
An excellent compensation plan is straightforward and predictable to enable employees to understand their roles and link their performance to the organization’s pay structure. A people-focused pay program is fair, flexible, and allows employees to plan their efforts and accommodate new approaches to their contribution to the firm. In light of this, Marylion’s incorporation of the compensation plan into its system benefits the employees and the company. In attempting to train the new acquisition’s employees on the shift to a more effective pay model, this session agenda highlights the elements of a person-centered approach, the main components of Marylion’s Stair Step Model, analyze how the model will benefit the employees, and compares people-focused pay program to the traditional system. The main finding, which also serves as the plan’s relevance, is that a competency-based pay model will ultimately improve Marylion Corporation employees’ engagement and motivation and increase the organization’s overall productivity.
MARYLION CORPORATION TRAINING OUTLINE
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GOALS / DESIRED OUTCOME: To help Marylion Corporation’s employees how a people-focused compensation system will work and aid in their transition and adjustment to the compensation structure. |
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TIME |
TASK |
DURATION |
SPEAKER’S NOTES |
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08:00 AM – 10:00 AM |
· Introduction to people-focused compensation training. · Discussion of the scope and background of compensation systems. · Explanation of the training session’s learning objectives. |
2 Hours |
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10:00 AM – 12:00 PM |
· Description of people-focused compensation pay models. · Definition of the system’s terms and concepts. |
2 Hours |
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BREAK |
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12:00P PM – 02:00 PM |
· Description of job-based pay models. · Description of the similarities between competency-based and job-based pay systems. · Description of the differences between competency-based and job-based pay systems. |
2 Hours |
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02:00 PM – 04:00 PM |
· Description of Marylion’s adoption of the Stair Step pay model. · Explanation of key points, concepts, and benefits of the Stair Step pay model |
2 Hours |
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DAY ONE |
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08:00 AM – 10:00 AM |
· Overview and summary of yesterday’s discussion of the people-focused compensation model. · Explanation of the advantages of the people-focused compensation model. · Discussion of why Marylion Corporation should adopt people-focused compensation models. |
2 Hours |
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10:00 AM – 12:00 PM |
· Explanation of the elements of employee motivation and engagement. · Discussion of how a people-focused pay program affects employee motivation. |
2 Hours |
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BREAK |
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12:00 PM – 02:00 PM |
· Description of the role of people-focused pay programs in employee motivation through promotion and the enhancement of employees’ career paths. · Overview and recap of the contents and lessons learned in the training session. |
2 Hours |
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References
Berlo, N. van. (2018, August 13). MLM compensation plan review – stair-step breakaway
compensation plan. LinkedIn.
Greene, J., Hibbard, J. H., & Overton, V. (2014). A case study of a team-based, quality-focused
compensation model for primary care providers. Medical Care Research and Review, 71(3), 207-223.
Jacoby, T. (2022). Training Tomorrow’s Workers: Next Steps for New York Community
Colleges. Manhattan Institute for Policy Research.
Kamola, R. (2019, October 15). Compensation plan: Introduction, characteristics, factors, steps,
trends. Economics Discussion.
Mendy, J., & Rahman, M. (2019). Application of human resource management’s universal
model: An examination of people versus institutions as barriers of internationalization for SMEs in a small developing country. Thunderbird International Business Review, 61(2), 363-374.
Milkovich, G. T., Newman, J. M., & Milkovich, C. (2014). Compensation. Nova Iorque:
McGraw-Hill/Irwin.
Putra, R., lima Krisna, N., & Ali, H. (2021). A Review Literature Employee Performance Model:
Leadership Style, Compensation, and Work Discipline. Dinasti International Journal of Management Science, 3(1), 56-66.
Teimouri, H., Shahin, A., Shaemi Barzoki, A., & Karimi, A. (2018). A Pattern of Competency-
Oriented Compensation System of Employees. Management Studies in Development and Evolution, 27(90), 115-140.
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