case study `Changing reward structures: the case at Airbus UK`

Running Head : Case Study - Airbus

Case Study - Airbus

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Case Study - Airbus

Answer 1

Shifting form traditional to a more performance based reward system Airbus will garner more advantages then disadvantages . These new forms of participative and performance based systems have been coined after extensive research (Cox 2000 . However , no paradigm is completely error-free since the success of any system depends on the way it is being implemented . In a study by Cox (2000 ) employee participation

to form an effective pay system has been studied . In the support of this argument he mentions that while traditional approaches have concentrated on the importance of pay levels as a recruitment and retention tool enthusiasts of variable pay systems have more recently made claims that different pay systems encourage employees to direct their effort in different ways . For organisations , there are inevitable tensions in managing pay , and the pay system may be put under pressure to accommodate internal pay differentials and external relativities created by labour markets

With the introduction of the new system , elimination of vague and needless job s will take place . The concept of getting promotion to a higher designation in to get a monetary raise will be eradicated . Horizontal expansion of salary bands is usually seen as more logical and fair as opposed to vertical expansion . The employees can now get salary raises staying at the same designation but moving higher up through the levels with the introduction of Incremental Zone Pay Range concept . Instead of a job evaluation system it will be more of a performance evaluation system which will motivate the employees to improve their performance and work as a synergy to achieve Airbus organisational objectives . Also the managers can retain the employees in their own departments every time they get a pay raise compared to the previous practice

However , if the system is not understood properly or managers are not properly trained to carry out performance evaluations then the new system can be of more harm then beneficial . The challenge of selecting designing and implementing a pay system remains a perennial one for managers and a recurrent focus of interest for academics (Cox 2000 . In the new system , a very big and non-practical assumption is that the managers and employees have understood the new system well as it is one of the prerequisites . Finessing the design of the benefits package is just the beginning (Pfau Kay 2002 . To make effective use of the investment for recruiting and retention , it is critical to communicate the rationale and the value associated with the offerings . Employees and candidates essentially have one question when it comes to a company 's benefits package "What does this mean for me " That one question should guide the creation of the communications strategy (Pfau Kay 2002 . To cut through the haze of confusion hovering over most employee handbook benefits s , companies should do everything they can to personalize information

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