Management Essay -- Business, The equity System, Employee Evaluation

1.0IntroductionThis chapter consists of the background of the demand, problem statement, research objectives, includes both normal and specific objectives, finally the significant of the study.1.1 Research backgroundAccording to David E. Terpstra (2003), establishment policies on the compensation and practices play rivalrous roles in the business environment. However, physical com rate must be able to define and design a crop of truth systems which consists of distributive comeliness (external equity, internal equity, individual equity) and procedural equity in constructing pay system. Hence, it is important for the arrangement in packaging lovable pay and compensation policies as part as to be combative with the market in the equivalent industry by adopting form of relevant equity systems. Milkovich & Newman (1996), define pay distribution as compensation levels salaried for the individual surgical procedure, human capital and work responsibilities within a integrity organization. However, Gary Dessler (11th edition, 2008) viewed that, manager should categorize equity systems into four elements which arei.External equity refers to the differences in jobs pay rate from one company to other companies.ii. ingrained equity which measuring the differences in the jobs pay rate from one position to another position in the same company.iii.Individual equity refers to legality of the pay that made by the company by looking at the individual performance at the same or very similar kind of jobs within the company.iv.Procedural equity refers to the decision made regarding the apportioning of pay by looking at the fairness in the processes and procedures.Employees accredited rewards which satisfy their needs and expectations (individual go... ...ng the organization productivity (Lawler, 2003). The immenseness in conducting this study is actually to oversee whether the equity systems are considered during assessing the employee performance. If the equity systems linked with the performance, intimately of the organization must be used equity systems in put their compensation rate. It is learnt that, money is one of motivator factor which may join on the employee credibility level in performing well. For example, if the individual is performing well, the organization may use individual equity in assessing the level of the performance before rewarding them. Since most of the employee believes equity rate is the most importance elements that need to be considered by the organization, it is the organization responsibilities to designing a competitive compensation package which may benefit both parties.