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Particular strategy

Organsations must keep ahead with changing times by adopting new emergence of employee compensation methods and Starbucks. The total compensation received by James L. Donald, at Starbucks is $ 8, 908,636 as President of North America. The compensation includes Basic pay, Bonus, Annual compensation, and other benefits. Starbucks has a huge workforce as part-time and full-time workers who may at regular intervals demand for hike in pay or raise an issue for more monetary benefits.

In such instance, employees are expected to perform with efficiency, by giving regular attendance, attending to customers appropriately and in maintaining a code of conduct, whereby if the management is satisfied, starbucks would improve its compensation to its workers. b. Recommend a strategy for ensuring that the reward system continues to align with organizational mission as the mission evolves. Application of psychology in business, necessitates to choose a particular strategy for reward system.

A simple formulae of reward is: productivity x no. of hours worked ($ 0. 00 per hr) would produce the amount of reward that can be paid to each worker. It can also be analysed here, leisure workers are prone to the areas of lower performance whereas fast and accurate workers are entitled to

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receive higher rewards with the fact that organization productivity has increased whether it is in handling real time projects, administrative issues or industrial related activities such as factory production, warehousing, or transporting. An effective reward system carries the following in view of both employer and employee.

1. Pay and benefits fulfil the requirements, needs and goals of employee. (. e. g. job security, provides short and long term financial objectives. 2. Employees experience a clear and more improved relationship and in organizational behavior. (e. g. quality work, improved productivity. ) 3. Distribution of rewards are equal basing on past performance and objective criteria bringing a cheerful smile in employees apart from offering a complete satisfaction of business to the employer. “Most organizations have great difficulty with their performance appraisal systems.

Many employees do not believe they are administered fairly. Morgan and Shiemann(1984) show data indicating that 31 percent of managers, 34 percent of professionals and 39 percent of hourly employees rate their performance appraisal process as either “not too” or “not at all” effective”. (Douglas Bray, Applying Psychology in Business, page 360) A survey conducted between the years 1983-1986 indicated that employees are interested in health insurance plans, dental benefits, holidays, pension plan, saving plan, educational assistance, childrens education plan, House rent allowance, and traveling allowance.

In the present times of employment, another research argues that whether high benefits and salaries are major concern for employees whereas intangible benefits of happiness, comfort in work environment and security in job are also a matter of concern even on a low paid salary. “Overall, the research described above suggests that having money is not related to personal happiness per se. However, whether people who have money or not, the amount of importance they place on it can actually be maladaptive.

Indeed, individuals who consider money important tend to be less happy than those who place less importance on money”. ( James Houran, President & Keith Kefgen, 2007) c. Examine predicted future trends over the next 5-10 years with regard to contingent workers in this industry and suggest ways organizations in the industries can prepare for these changes. Future trends of compensation are dependent on labor and employment policies of government as well on corporate employment policies. “Truth in our ideas means their power to work.

” (William James) There are many challenges ahead in 21st century for economies of nations which rise high with employee productivity, which is why achievement of organization goals, identification of employee needs and reconfiguring employee benefits by segregating skilled workers, knowledgeable workers, professionals graduates (Engineering and science) and unskilled labor is required. Apart from this, introducing flexible working hours, health insurance plans, retirement plans are also of great benefit to employees.


Albert E. Schwenk, Jordan N. P. Funtner (2003) Compensation in the Later Part of the Century Accessed February 8, 2008 http://www. bls. gov/opub/cwc/cm20030124ar06p1. htm Employee Motivation and Work Incentives in the Service Industries Accessed February 8, 2008 http://web1. msue. msu. edu/imp/modtd/33129713. html Executive Compensation Starbucks Accessed February 8, 2008 http://swz. salary. com/execcomp/layouthtmls/excl_execreport_106473. html Books Douglas Bray (1998), Applying Psychology in Business Accessed 9 February, 2008 http://books. google. com/books? id=8Qvx21qA9gcC&pg=PA362&lpg=PA357&ots=1zaRCSKn1v&dq=future+trends+in+employee+compensation&ie=ISO-8859-1&output=html&sig=cnCTQlbEe5ITrFEw4rA6PoPCFn4

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