Proposing A Skill Based Compensation System Commerce Essay

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The Company should increase the pay of the employees after they become more efficient and proficient in their skills. Workflex, if introduces skill based pay it is more aligned to its strategic objectives and can provide it with more competitive advantage.

Workflex needs to assess employee's desire for continuous learning to develop his skills and to do flexible job assignments. There should be a sub system to analyse the information system and procedures that can further match the human resource management system and existing culture of the company. This can be achieved by introduce conduct readiness assessment system.

Senior field employees and the human resource management need to circulate the information and awareness about skill based pay and its impact among the work force. This will familiarize the work force with range of process involve in developing the change plan. The effective communication can handle the resistance among the employees.

The work process should be fully analysed in accordance with new business operations. There should be a different plan for different groups of employees. They can be differentiated on the bases of their skills, and tasks they perform. There is a need to find that how many employees are skilled in their jobs and activities in the current business and how many employees need improvement and how many are actually interested in developing their skills.

Job classification system can help Workflex to develop and identify different factors for which the compensation system will work. Housekeeping, pest control, repair and renovation, garden and lawn maintence and consultancy services are few Workflex operations which can be classified accordingly. Employees who are into housekeeping, cleaning, maintaining pool etc. can be paid according to their experience. But the employees who have additional skill of maintaining the garden along with housekeeping can be paid more because of his time saving efficiently. Similarly, employees doing pest control, housekeeping and maintaining garden can be considered separately and can be paid different to others. Repair and renovation employees are skilled workers who require licensing for their jobs, can be paid even more then housekeeping and pest control employees. Consulting services require good interpersonal skills and communication while tackling the clients. Consultancy services will look into bigger hotels and resorts and will bring about higher profits to the company. Hence, the employed staff should be with higher profesensie, higher standard in dealing with clients. Therefore, they should be paid more than housekeeping, renovation and pest control employees.

Workflex should have some rotation system through which it can identify the skills of technical and non technical employees. This will help in identifying the weaknesses of the employees and providing them adequate training. It can also introduce a fixed certificate criteria which will balnce the operational performance of the work force. For example, employees may learn team behaviours and may procure new skills.

Company should have some administrative control system to identify the issues concern to jobs right from the top to the bottom operations. Company can bring about some changes in employee's recruitment, training, performance and reward system. Increase in span of control and reporting system also need some improvement.

Performance based compensation system

Performance based pay enhances the motivation and performance of employees. Employees who are more productive and contributive can gain more of the employer and the company get benefited by their performance and potential.

Proposal for performance based pay

First of all, Workflex need to develop a system to evaluate the performance of its employees. After that company can determine the course of supplementing their base pay. The performance measurement system provides a clear sense of direction and is an opportunity for employees to participate in setting the goals and standards for performance. This will help employees to understand the decision that affects them and their pay. Office workers and administrative staff can be judge on the bases of the time spent and the quality of work. There should be annual increment pay system of them. The managers who work with the field employees can be given bonus. The field employees should be considered as individuals rather than teams, so they should be paid individually for their performance.

Only the employees who work for certain projects should be paid collectively for their achievements for example employees working in one-off events can be judge by their project managers and should be rewarded. Small targets can be fixed for field employees. For example employees working in housekeeping cleaning and garden maintenance can be given smaller targets for 2-3 months and then can be paid bonus for it. Pest control and renovation can be given bonus considering their tasks and difficulty level. Employees who will work on their basic skill will be paid basic skill pay according to the market rate for example if an employee cleans 15 rooms in a day and another employee maintains the garden should be paid same basic pay because of the basic skill involved. Consultancy services is about to bring Workflex bigger profits and the whole expansion of the business operations depend upon them. There should be an attractive performance based reward system for them. They can be paid rewards like sales commissions, and incentives. If a employee helps the company in new projects and bring bigger clientage they can be offered to share the profit. Consultancy staff requires higher job satisfaction and they should be happy with the system's fairness.

Performance based pay system will improve the performance of the company and the management process. The performance management process considers over all results while setting the strategic objectives:--- Performance management process helps the employees in their performance and development where as it helps company by achieving its goals and objectives. To bring performance managements system into company's activities and for automation Workflex need to -

Workflex need to prioritise its goals and objective and identify the ways to achieve them. Workflex may have some ambitious employees in its work force. For them independent decision making at present is difficult. So company should bring awareness about its achievable goals and objectives to each employee so that they can manage their work operations according to it.

Workflex should have fixed standards. Sometimes some employees put on their best effort and perform well in their job operation but it is not in alignment with company's requirements this leads to employee's dissatisfaction and frustration. Setting standards to measure the result will help the company in doubling up its turnover. If the standard set by Workflex will out way the clients requirements it will make the client happy and will give the company competitive advantage.

At intervals, Workflex need to monitor it employee's progress and have a continuous tracking to observe if employees are in alignment with company's goals for example big hotels have bigger standards so the employees should have a monthly monitoring to see if they are performing their job in a right way. There should be a feedback system to detect and monitor company's and it's workforce's weakness and strengths. Feedback system should be implemented in each department. It should also include group leader, field manager, self and peer assessment. Progress and improvement should be reviewed regularly.

For the retention of experience employees company should create an atmosphere where employees can plan their future. Workflex should provide training and learning facility to its employees for their development the renumration system should be design so that the basic motive off an employee get fulfilled and he does not change jobs.

Under the laws by fair work Australia, the employees should be paid fairly it also includes sharing the work related information and considering proposals. Fair work Austarlia eliminate the need of unions because of a fair agreement between the employees and the employers of a particular company ( Fair work Australia 2010). In applying this law on Workflex, good faith bargaining process should keep in mind that all the employees are personally informed and educated about the work place agreement for their better understanding. By this all the confusions and misunderstanding can be cleared before the actual agreement take place. Fair work Australia and good faith bargaing legislations and its implementation will bring confidence and trust among employees .This will fix the pay system problems in Workflex without any involvement of unions.


The above written proposals recommend a need of highly efficient human resources management system in Workflex. Skill base pay, performance base pay and employment relationship require a good computing system in the company. Workflex need to improve its technology to be competitive in the current market. It's human resources department needs a well equipped efficient system to keep itself and its employees up to date with the latest changes in the company.


Workflex wants to expand its business operations and is trying to limit its current business for this company needs to overcome it remuration problems and take right decisions the implementation of the skill base pay and performance base pay system in accordance with Fair work Australia legislation. Any breach of legislation can lead to involvement of unions , which make communication of the chose proposal to the employees very important. The training and development system of employees needs attention before entering the bigger business. The pay system will be design according to the skills and the performance to meet higher standards of bigger market. Skill based pay and performance base pay will also help in retaining the