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Colleges of Business



Group Asignment: Case Study
Lecturer Name :
Dr. Zurina bt Adnan
Prepared by:
Devi Tri Kemalasari


Ekky Tian Kusuma


Fauzan Usman




Lisa Lioni



Human Resource Management is a function in organizations designed to

maximize employee performance in service of their employer's strategic objectives.
Human Resource is primarily concerned with how people are managed within
organizations, focusing on policies and systems. There are so many cases or problems
came up because the lack of knowledge about human resource management. From the
article that already given before, we knew that Pamela Johnson as manager of
Lakeside Utility Company, has a problem regarding to our main topic. She faced a
problem which is cash bonus payment for the employee who has an excellent
performance in their works. At the beginning, this method is going smoothly without
any obstacles or problems. Sadly, after Pamela Johnson announced the recipients of
the cash bonus, she began to receive a large number of complaints from the customer.
Then, this method also affects the other happiness of employees. They thought this
kind of method is an unfair payment on the company. Pamela Johnson is at loss about
what should she do to solve this kind of problem. Together with this article, there are
some questions that we try to answer in order to help Pamela Johnson figure out what
is actually the main problem that she faced and find the best solution to solve it as

1. What major issues and problems concerning the design and implementation of
pay-for-performance systems does this case illustrate? Explain.

From the case that has been given before, we do not say that Pamela
Johnsons method is wrong. It was a right one, but not that accurate one. Because,
the several employees who did not get the cash bonuses think that this kind of
method was not fair. There are several ways how to success in pay-forperformance system. Firstly, Lakeside Utility Company need to meet certain
requirements. The requirements are:
a. A culture that supports pay-for-performance
b. Effective and fair supervisors
c. A rigorous performance evaluation system
d. Adequate funding
e. A system of checks and balances to ensure fairness
f. Appropriate training for supervisors and employees
g. Ongoing system evaluation
From the case, the large numbers of problems are involves in rigorous
performance evaluation system and ongoing system evaluation based on the
points above. It might be happpen because of the Pamela Johnson gave a less
transparency about performance evaluation system and ongoing system
evaluation. She assessed the employees based on average length of time needed
to restore power, results of customer satisfaction survey, and number of hours
required to complete routine installation assignments successfully. Those things
not enought to measure exactly how the employees do their performance. As I
said before, Pamela should give more transperancy about the evaluation to the
employees in order to avoid unfairness among the employees.

Another thing that Pamela Johnson has to do when she is doing pay-forperformance is the system should be evaluated regularly and modified when
necessary, this option have to be done in certain years in order to ensure that payfor-performance keep functioning properly. If the systems are functioning
properly, then:

a. Outstanding performers will receive the greates reward, to acknowledge their

superior contributions and to motivate them to continue high performance
b. Average performers will receive substantially smaller raises, which may
encourage them to work harder to achieve larger raises in the future
c. Poor performers will receive no increase, which is intended to persuade them
to improve their performance or leave
From the last point above, it might be the another indicator that caused the
problems. Because, we can assume that mostly the employees who did not get the
cash bonus are the poor performers in the company. Thats why the employees
unwilling to help out the other employees were being rewarded. So, in order to
reach the first point above which is outstanding performers, Pamela Johnson has
to refer back to the requirements of pay-for-performance which is a ppropriate
training for supervisors and employees. This requirement is very important and
should be done at the beginning before you proceeding to another steps on payfor-performance system.

2. Are the team-based incentives appropriate for the type of work done by
Johnsons crews?
Team-based plans are likely to be succesful
When work tasks are so intertwined that it is difficult to single out who

did what
When the firms structure facilities the implementation of the incentives
When the objective is to foster entrepreneurship in self-managed work
groups.Encourage the students to solidly base their explanations on these
circumtances. When this is done, they may deduce that team-based

incentives were not appropriate for johnsons crews. Regardless,their

decisions and explanations need to be grounded in the concepts presented
3. Might it desirable to use a combination of team-based as individual incentives
at Lakeside Utility Company? How might such a plan structured?
It appears that using a combination approach would alleviate some of the problems
the employees are not experiencing at johnson. Such a plan will vary.


U.S. Merit Systems Protection Board. (2006). Designing an Effective Pay for
Performance Compensation System. Retrieved 8 December 2014, from