The crucial advantage of providing an individual piece-rate pay plan to the furniture builders at Metropolitan Furniture is boosting productivity and offering an incentive to work harder to build furniture pieces. Applegate (n.d.) states that individual remuneration is focused only on personal achievement rather than team performance. This rate pay plan gives higher-achieving workers more salary compared to lower-achieving employees. It enables staff rivalry for reputation and income, which offers a tremendous incentive to succeed. The method effectively prevents penalizing employees based on the unsatisfactory performance of other team members, resulting in higher individual morale (Applegate, n.d.). This type of remuneration may also appear more personal, particularly to better-performing employees.
While most furniture items are built separately by Metropolitan employees, they frequently need to operate as a team. To ensure on-time delivery, workers should assist one another in completing certain furniture sets. Applegate (n.d.) claims that employees that have a team-based incentive pay plan may perform better with the expectation of not disappointing the team. Project-based tasks, for instance, require each team member to accomplish a job before the rest of the group may proceed to the next level (Applegate, n.d.). Since the motive to hide knowledge for personal benefit is diminished when teams are examined and rewarded as a group, information is distributed more freely.
Metropolitan is distinguished from its competitors by its reputation for on-time delivery. The company’s guarantee of on-time delivery is a top priority. The team-based plan will promote the company’s image by ensuring that a team receives a bonus payment when each piece of furniture is completed in time for planned delivery. Implementing a team-based recognition program will increase employee engagement and effort (Presslee et al., 2022). Moreover, the benefits of team-based recognition include higher customer satisfaction and financial success gain.
References
Applegate, M. (n.d.). Team-based compensation vs. individual. Chron. Web.
Presslee, A., Richins, G., Saiy, S., & Webb, A. (2022). The effects of team-based recognition on employee engagement and effort: A field study. SSRN.