In the organization’s meeting today, Thamer’s newest topic is rewards and pay plans. He starts: “Marwa showed me the salary figures and records for everyone. I can’t find any pattern or rationale for how people are paid around here. I think we should work this out.”
Kareem sends everyone but Thamer and Nabeel out to find more firewood and looks at Thamer. “No one but the four of us know how everyone is paid around here. What were you trying to do? Start a fight?” Nabeel adds, “We do fine with the system we have. Why did you think we needed to talk about compensation this week?”
Thamer asks tersely, “Would you describe that system for me?”
Kareem starts, “I like a guy, want him to work for us. So, I offer him whatever I made when I was his age. Or what Nabeel made at his age; especially if it’s a technical job, like machine design.” Thamer groans and holds his head.
Nabeel adds, “For the pros, though, we talk to them. Find out what pros are getting at other stores to demonstrate and sell the products. We pay that golf guy SAR 20,000 each time he shows up and swings his club around the golf course.” Thamer groans and holds his stomach.
Kareem counters, “Well, the pros are special cases, right?” Thamer collapses into a chair.
Nabeel asks, “Thamer, you took over setting starting salaries when you got here. What have you been doing?”
Thamer says, in a small voice, “Just offering what you offered the last guy in the same job. I couldn’t figure out any other pattern. That’s why I put compensation on the agenda for this week.”
Kareem and Nabeel groan. They all look up as the door opens and Faris comes in with a load of firewood.
1. Make a list of rewards: extrinsic versus intrinsic; financial versus nonfinancial; performance-based versus membership-based found in the above case.
2. Evaluate the appropriateness of these rewards for maintaining employee commitment in the organization.
3. Does the compensation system in the organization meet the general goals of a compensation system?
4. Make three suggestions to improve the organization’s compensation system.
5. Identify three features of the compensation system that are excellent for this organization. Would they be suitable for most organizations? What types?
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