RESPONSES OF CLASSMATES

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INSTRUCTIONS: I would like you to respond to TOPIC 1-5. WHICH ARE RESPONSES OF CLASSMATES and include an outside resource/citation to support your position topic 1 from Laura: I don’t think it’s fair to pay the two employees differently if they received exemplary performance ratings because of the quartile. As noted by Martocchio on page 181, “no two employees possess identical credentials…” You could have hired two employees for the same position, and paid one person more because he possessed a Master’s degree and certification over a Bachelor’s degree. So, one is being penalized for being hired initially into a higher quartile, third quartile, and thereafter paid a less percentage for the same work performance indicators as another. The book explained that “compensation professional reduces merit pay increases percentages as quartile ranks increase to control employee’s progression through their pay ranges (Martocchio, 2020, p. 192).” Pay grades reflect the corporate criteria and may be dictated by the budget (Martocchio, 2020, p. 193). As a result, this produces inequity between the two employees. topic 2 from Jessica: From a business perspective, I think it is fair, as there are various factors that would need to be taken into consideration. Firstly, “quartiles allow compensation professionals describe the distribution of data…based on four groupings.” (Martacchio, p. 193) By having different percentages based in the various quartiles, it helps a compensation team control employees’ progression throughout the years. It helps keep employees within their appropriate pay ranges, while being consistent with the company’s budget. “The lower a person’s pay falls within its designated pay grade (e.g., the first quartile versus the third quartile), the higher the percentage pay raise, all else being equal.” (Martacchio, p. 193) If someone at a higher salary were to receive the same percentage of someone in a different quartile receiving a lower salary, the salary gap between the employees doing the same jobs with the same performance ratings would get further apart. For example, if Employee A were making 50k and Employee B were making 20k, and they both received the SAME percentage of merit pay, Employee A would get a substantially larger raise, creating a farther gap between two similarly performing employees. Additionally, in regards to employees with the higher salaries, they “would exceed the maximum pay rate for the range more quickly than would the base-pay rate” for the lesser paid employee. (Martacchio, p 193) This would not be a sound move on a company’s part, as the higher the employees’ pay went, if the percentages were not decreased, their base pay would just continue to grow, and this is something that could easily spiral out of control. From an employee perspective, I could see where they would not see this percentage difference as fair, therefore a merit pay like this would need to be something that is clearly communicated. If an employee at a higher salary only hears the percentage that they are receiving, and it is less than an employee in a different quartile, they can become discouraged, even though the numbers may still translate appropriately. “Merit pay must be communicated effectively to ensure the purpose of the system. The company goals, mission, and objective must be communicated along with individual or team goals. It is also vitally important that the reward structure is clearly understood, including potential payouts, KPIs (key performance indicators) of success, the timelines in which the goals must be made, as well as the methods of which the payouts are calculated.” (Sullivan, 2020) By creating a clear communication about the merit pay program, and ensure employees understand how it works ahead of time, it can reduce miscommunications and keep motivational integrity intact. topic 3 from Maria:I found this chapter to be challenging but feel it is fair to give one employee a smaller percentage merit increase because his pay falls within the third quartile but give a larger percentage merit increase to the other because his pay falls within the first quartile. As stated in the text book, and what some of us have experienced as employees, no two employees have identical credentials and skills and this affects how each person does their job which in turn affects salary. Using the table 8-2 in the text,(p193) and assuming both employees get an excellent rating, the $50,000 salary with increase to $53,500 and the $20,000 salary will increase to $22,400. The initial salary is reflective of the knowledge, skills and abilities (KSA) and the performance rating increase would still be compensation for those initial KSA’s at the time of hire and how they are performing in their position. Looking at both increases separately, the employees stay in their respective quartile range. topic 4 from Eric:Two employees perform the same job, and each received exemplary performance ratings. Is it fair to give one employee a smaller percentage merit increase because his pay falls withing the third quartile, but give a larger percentage merit increase to the other because his pay falls within the first quartile? I really want to say it is fair. I really do. I’m looking at everyone’s posts, and some included math to back it up. I understand where everyone is coming from regarding a cost control standpoint. Here’s my take, and please, correct me if I’m wrong. But if the job title and performance ratings are the same, why can’t the merit increase percentage be the same? The employee in the first quartile is there because he/she has less experience than their colleague in the third quartile. When I’m thinking quartiles, this is a long the lines of what I’m thinking of: