The competitive edge of new pay systems The United States has been in an economic boom for the last eight years. One of the results of this economic expansion is the low unemployment rate. The unemployment rate is below five percent, and in some regional labor markets even lower than that! This figure holds steady across all labor markets (with the exception of the high technology sector, which has so few available workers, it has been lobbying congress to raise the limits on non-U.S. citizens working in the United States). A Company can no longer offer mediocre benefits and sub-par working conditions while expecting to retain top quality employees. For Human Resource professionals, this challenge is worthy of study. The general trends in pay are to provide not only a fair salary, but also providing added benefits like flextime and strong medical benefits. Incentive pay and pay-for-performance is on the rise. The more important emerging question is how does the HR professional implement compensation plan that rewards the employee who is going above and beyond, while at the same time improving the performance of an employee not doing as well? Performance appraisal is a topic that has been around for quite some time; however, employees are not too happy with the current state of affairs when it comes to appraisals. (Davis and Landa, 1999 p 18) The old way of appraising employees with a paper intensive and top down orientation in communication are falling by the wayside. Appraisals that allow customers, employees and managers to rate each other are becoming more and more popular. Companies like Disney and Honda are installing appraisal systems that do just that. Human resource professionals are learning how to leverage technology to assist their organizations in being able to appraise performance in just such a way. Otis Elevator Corporation was able to do just that by leveraging its existing investment in technology (specif...
