Confirming theoretical pay constructs of a variable pay scheme
- Ncube, Sibangilizwe, Bussin, Mark H.R., De Swardt, Lukas
- Authors: Ncube, Sibangilizwe , Bussin, Mark H.R. , De Swardt, Lukas
- Date: 2013
- Subjects: Compensation management , Performance awards , Wage payment systems
- Type: Article
- Identifier: uj:5518 , http://hdl.handle.net/10210/13791
- Description: Orientation: Return on the investment in variable pay programmes remains controversial because their cost versus contribution cannot be empirically justified. Research purpose: This study validates the findings of the model developed by De Swardt on the factors related to successful variable pay programmes. Motivation for the study: Many organisations blindly implement variable pay programmes without any means to assess the impact these programmes have on the company’s performance. This study was necessary to validate the findings of an existing instrument that validates the contribution of variable pay schemes. Research design, approach and method: The study was conducted using quantitative research. A total of 300 completed questionnaires from a non-purposive sample of 3000 participants in schemes across all South African industries were returned and analysed. Main findings: Using exploratory and confirmatory factor analysis, it was found that the validation instrument developed by De Swardt is still largely valid in evaluating variable pay schemes. The differences between the study and the model were reported. Practical/managerial implications: The study confirmed the robustness of an existing model that enables practitioners to empirically validate the use of variable pay plans. This model assists in the design and implementation of variable pay programmes that meet critical success factors. Contribution/value-add: The study contributed to the development of a measurement instrument that will assess whether a variable pay plan contributes to an organisation’s success.
- Full Text:
- Authors: Ncube, Sibangilizwe , Bussin, Mark H.R. , De Swardt, Lukas
- Date: 2013
- Subjects: Compensation management , Performance awards , Wage payment systems
- Type: Article
- Identifier: uj:5518 , http://hdl.handle.net/10210/13791
- Description: Orientation: Return on the investment in variable pay programmes remains controversial because their cost versus contribution cannot be empirically justified. Research purpose: This study validates the findings of the model developed by De Swardt on the factors related to successful variable pay programmes. Motivation for the study: Many organisations blindly implement variable pay programmes without any means to assess the impact these programmes have on the company’s performance. This study was necessary to validate the findings of an existing instrument that validates the contribution of variable pay schemes. Research design, approach and method: The study was conducted using quantitative research. A total of 300 completed questionnaires from a non-purposive sample of 3000 participants in schemes across all South African industries were returned and analysed. Main findings: Using exploratory and confirmatory factor analysis, it was found that the validation instrument developed by De Swardt is still largely valid in evaluating variable pay schemes. The differences between the study and the model were reported. Practical/managerial implications: The study confirmed the robustness of an existing model that enables practitioners to empirically validate the use of variable pay plans. This model assists in the design and implementation of variable pay programmes that meet critical success factors. Contribution/value-add: The study contributed to the development of a measurement instrument that will assess whether a variable pay plan contributes to an organisation’s success.
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The effect of the introduction of individual performance based remuneration within Alpha Cement
- Authors: Swanepoel, Stephen David
- Date: 2012-08-13
- Subjects: Performance awards , Compensation management , Wages and labor productivity , Merit pay , Alpha (Pty.) Ltd.
- Type: Thesis
- Identifier: uj:9098 , http://hdl.handle.net/10210/5557
- Description: M.B.A. , Many organisations have approached employee remuneration in new ways in recent years. Most of these new approaches are based on the principles of aligning a portion of individual or team remuneration to achievement against specific goals. Such systems are most commonly referred to as performance based remuneration systems. Alpha (Pty) Ltd has very recently introduced a performance based remuneration system aimed at individuals within the organisation. It is evident that there is no single system that can be applied across the infinite number of organisations globally, and that developing any ideal performance related system requires careful consideration of many variables. To develop and implement an effective system within any organisation, requires custom tailoring the system to best suit that organisation. This research paper aims to analyse what impact the introduction of an individual performance based remuneration system has had within the cement business unit of Alpha (Pty) Ltd, how the findings of the research compare to the theoretical reference on the subject, and whether there is room for improvement to the existing system.
- Full Text:
- Authors: Swanepoel, Stephen David
- Date: 2012-08-13
- Subjects: Performance awards , Compensation management , Wages and labor productivity , Merit pay , Alpha (Pty.) Ltd.
- Type: Thesis
- Identifier: uj:9098 , http://hdl.handle.net/10210/5557
- Description: M.B.A. , Many organisations have approached employee remuneration in new ways in recent years. Most of these new approaches are based on the principles of aligning a portion of individual or team remuneration to achievement against specific goals. Such systems are most commonly referred to as performance based remuneration systems. Alpha (Pty) Ltd has very recently introduced a performance based remuneration system aimed at individuals within the organisation. It is evident that there is no single system that can be applied across the infinite number of organisations globally, and that developing any ideal performance related system requires careful consideration of many variables. To develop and implement an effective system within any organisation, requires custom tailoring the system to best suit that organisation. This research paper aims to analyse what impact the introduction of an individual performance based remuneration system has had within the cement business unit of Alpha (Pty) Ltd, how the findings of the research compare to the theoretical reference on the subject, and whether there is room for improvement to the existing system.
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The role of performance-based reward systems in organisational performance
- Authors: Lotter, Louis Francois
- Date: 2012-09-05
- Subjects: Incentives in industry , Performance awards , Employee motivation
- Type: Thesis
- Identifier: uj:3531 , http://hdl.handle.net/10210/6918
- Description: M.Comm. , Paying for performance is however not an easy solution for organisational performance problems. As stated by Wright (1991: 16), "even the most ardent supporters of performancebased reward systems recognise that it is extraordinarily difficult to manage well". There is also a school of thought that rejects the claims made of performance-based rewards. A recent survey of British Telecom executives carried out by the Society of Telecom Executives (1991: 35) revealed that only 6 per cent of those responding to the survey thought that performance-based rewards improved their performance compared with an overwhelming 70 per cent who thought it had not. Research conducted by Carmen and Wood (1992: 8) on behalf of the Institute of Personnel Management and the National Economic Development Office into payment schemes, did not confirm that performance-based pay was a motivator. Face-to-face interviews were conducted with 40 personnel directors and managers from large and medium organisations. They concluded that the personnel managers interviewed were by no means certain that performancebased rewards succeed in motivating people. Most were not convinced they could unequivocally identify that performance-based rewards was increasing either individual or organisational performance. When these research findings are closely investigated, it can normally be established that specific reasons contribute to the failure of the performance-based reward systems to increase motivation and organisational performance. Armstrong and Murlis (1994: 252) believe these reasons are mostly: A failure to involve employees sufficiently in the design and implementation of the system; A mistaken belief that the performance-based reward system on its own will achieve the expected increase in motivation and performance; and The poor people skills of those managers that are responsible for managing implemented performance-based reward systems.
- Full Text:
- Authors: Lotter, Louis Francois
- Date: 2012-09-05
- Subjects: Incentives in industry , Performance awards , Employee motivation
- Type: Thesis
- Identifier: uj:3531 , http://hdl.handle.net/10210/6918
- Description: M.Comm. , Paying for performance is however not an easy solution for organisational performance problems. As stated by Wright (1991: 16), "even the most ardent supporters of performancebased reward systems recognise that it is extraordinarily difficult to manage well". There is also a school of thought that rejects the claims made of performance-based rewards. A recent survey of British Telecom executives carried out by the Society of Telecom Executives (1991: 35) revealed that only 6 per cent of those responding to the survey thought that performance-based rewards improved their performance compared with an overwhelming 70 per cent who thought it had not. Research conducted by Carmen and Wood (1992: 8) on behalf of the Institute of Personnel Management and the National Economic Development Office into payment schemes, did not confirm that performance-based pay was a motivator. Face-to-face interviews were conducted with 40 personnel directors and managers from large and medium organisations. They concluded that the personnel managers interviewed were by no means certain that performancebased rewards succeed in motivating people. Most were not convinced they could unequivocally identify that performance-based rewards was increasing either individual or organisational performance. When these research findings are closely investigated, it can normally be established that specific reasons contribute to the failure of the performance-based reward systems to increase motivation and organisational performance. Armstrong and Murlis (1994: 252) believe these reasons are mostly: A failure to involve employees sufficiently in the design and implementation of the system; A mistaken belief that the performance-based reward system on its own will achieve the expected increase in motivation and performance; and The poor people skills of those managers that are responsible for managing implemented performance-based reward systems.
- Full Text:
Confirming theoretical pay constructs of a variable pay scheme
- Authors: Ncube, Sibangilizwe
- Date: 2012-10-24
- Subjects: Compensation management , Performance awards , Wage payment systems
- Type: Thesis
- Identifier: uj:10432 , http://hdl.handle.net/10210/7897
- Description: M.Phil. , Purpose: The purpose of the research was to evaluate the extent to which the constructs and dimensions identified by De Swardt (2005) are valid in describing and predicting the outcome of a variable pay plan. The following secondary research questions were therefore asked: What is the reliability of the eleven dimensions and three constructs? What are the statistical characteristics of the 11 dimensions and 3 constructs, and can they be used to benchmark new variable pay plans? How reliable are the 78 items as test criteria for the 11 dimensions and 3 constructs? Motivation for study: The primary rationale for this study was the unavailability of empirically tested models and the lack of validated variable pay instruments that evaluate the outcome of any variable pay scheme. Design/Methodology/Approach: The study followed a quantitative research methodology, with the primary objective of assessing outcome similarities through Structural Equation Modelling (EQS) factor analysis. Both exploratory and confirmatory factor analysis were performed to the sample data to measure correlations. Findings: The findings of the research highlighted that there were minimal differences between De Swardt’s variable pay models. Differences were identified by analyzing the reliability statistics and factor analysis rules of assessing model fit. Following certain research limitations, the research questions were further refined for use in future studies. The research findings confirmed De Swardt’s (2005) theoretical model of predicting variable pay outcome. Research limitations: Although the study was conducted amongst a wider population group, individual organisation feedback from the selected participants was not balanced. A considerably larger portion of the feedback was obtained from the company with which the researcher was employed. Practical implications/Value-add: The outcome of this research confirms the commercial applicability of the instrument in identifying potential flaws in any variable pay scheme during the early stages of implementation. This will have a positive impact on an organisation’s bottom line. Additionally, quantifying the impact of variable pay plans will not only enhance HR’s credibility with regards to the broader organisational goals, but will encourage a well-structured, performance-linked variable pay system based on tested models.
- Full Text:
- Authors: Ncube, Sibangilizwe
- Date: 2012-10-24
- Subjects: Compensation management , Performance awards , Wage payment systems
- Type: Thesis
- Identifier: uj:10432 , http://hdl.handle.net/10210/7897
- Description: M.Phil. , Purpose: The purpose of the research was to evaluate the extent to which the constructs and dimensions identified by De Swardt (2005) are valid in describing and predicting the outcome of a variable pay plan. The following secondary research questions were therefore asked: What is the reliability of the eleven dimensions and three constructs? What are the statistical characteristics of the 11 dimensions and 3 constructs, and can they be used to benchmark new variable pay plans? How reliable are the 78 items as test criteria for the 11 dimensions and 3 constructs? Motivation for study: The primary rationale for this study was the unavailability of empirically tested models and the lack of validated variable pay instruments that evaluate the outcome of any variable pay scheme. Design/Methodology/Approach: The study followed a quantitative research methodology, with the primary objective of assessing outcome similarities through Structural Equation Modelling (EQS) factor analysis. Both exploratory and confirmatory factor analysis were performed to the sample data to measure correlations. Findings: The findings of the research highlighted that there were minimal differences between De Swardt’s variable pay models. Differences were identified by analyzing the reliability statistics and factor analysis rules of assessing model fit. Following certain research limitations, the research questions were further refined for use in future studies. The research findings confirmed De Swardt’s (2005) theoretical model of predicting variable pay outcome. Research limitations: Although the study was conducted amongst a wider population group, individual organisation feedback from the selected participants was not balanced. A considerably larger portion of the feedback was obtained from the company with which the researcher was employed. Practical implications/Value-add: The outcome of this research confirms the commercial applicability of the instrument in identifying potential flaws in any variable pay scheme during the early stages of implementation. This will have a positive impact on an organisation’s bottom line. Additionally, quantifying the impact of variable pay plans will not only enhance HR’s credibility with regards to the broader organisational goals, but will encourage a well-structured, performance-linked variable pay system based on tested models.
- Full Text:
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