Business Studies

Consider what you learned in the experience and respond to the following in a minimum of 175 words:
• What are your feelings on a traditional salary structure (many levels) vs. simplified pay bands?
• Have your thoughts on salary structure changed after this exercise?
• What are the advantages and disadvantages of using salary bands?
See Case Study …

Salary Structure

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Traditional salary structure vs. Simplified pay bands

The traditional salary structure shows that the compensation strategy where each grade of work is competitive compared to the external pay scheme. On the other hand, the simplified pay bands are unique pay structures where compensation is based on targets on pay grades for workers within the organization (Shields et al., 2015). The traditional structure needs to be implemented as compared to the simplified pay bands. The traditional pay structure has a number of pay ranges, which vary depending on the nature and job position of each person. This kind of pay structure will offer a hierarchy system in the organization, which will allow the employees to remain motivated due to the desire for promotions from one pay grade to the other. The traditional pay structure should be encouraged to ensure that the workers have lasting impacts on their responsibilities and build positive employee welfare within the organization.

Changes in Salary structure

Thoughts on pay structure have changed since there is a need to address the welfare of the workers. Workers need to be supported by the organization by ensuring that they maintain the quality of their livelihood standards. Comparing the traditional pay structure and the simplified pay band shows that the traditional salary encourages the workers to remain committed and motivated, thus making significant contributions (Shields et al., 2015). Thus the organization should ensure that they offer policies that will support the welfare of employees.

Advantages and Disadvantages of Salary bands

Salary bands are essential since they encourage and motivate workers within the organization. Simplified salary bands encourage the morale of workers in the organization since they are likely to be motivated by the fact that the pay is internally fair and externally competitive. However, there are incidences where salary bands have discouraged employee commitments, thus limiting the productivity of employees. For instance, the simplified salary bands fail to prioritize the welfare of the employees, thus leading to dissatisfaction and increase turnover rates. This leads to loss of essential talents, thus reduced productivity. Most of the salary bands are short term goals for the organization to achieve certain objectives while it is difficult to maintain a lasting impact.

References

Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P., … & Robinson, J. (2015). Managing employee performance & reward: Concepts, practices, strategies. Cambridge University Press.