Compensation

Organizations recognize compensation as an important factor in employee satisfaction. Many companies are committed to providing compensation packages that are competitive and reward great performers for the results that they achieve. Today, organizations have moved away from the times where end of the year increases were automatically given, regardless of how good or bad one performs. We are operating in times where salary, bonuses, and other incentives are directly linked employee performance. While many associates may believe pay raises and other incentives are entitled, organizations are placing more emphasis on employee performance to determine if salary increases are deserved.

Organizations use different methods in granting pay raises for employees. In this paper, we will discuss the three methods my employer, Wellpoint Inc., use in determining pay increases for associates. Individual performance, departmental performance, and organizational performance are all key factors in determining salary increases. Wellpoint Inc. ensures all employees have the opportunity to participate in achieving individual and organizational goals that will ensure the company is successful. The Annual Pay and Recognition Process, the system Wellpoint Inc. uses for determining raises, recognize top performers through merit increases, end of year bonuses, and stocks.

The performance appraisal system used for employees is an ongoing process. For individuals, salary increases are determined by ones performance of job duties. Tying pay to performance has been proven to motivate employees to perform job duties more effectively and efficiently. Management and employees work together to develop goals and objectives for the employees to meet. The goals and objectives created should be measureable in terms of quality and quantity. Management meets with employees on a monthly basis to offer feedback on performance as well as provide corrective action for areas that require improvement. The results are monitored and reviewed by management. After reviewing the results, management has the ability to reward deserving associates for their hard work and dedication. Increasing knowledge or skills, working on special projects, increased productivity, performing job duties at a high quality level, and acting as a mentor to new and existing employees are some ways that can assist in increasing ones salary.

It is crucial that both management and employees keep record of their contributions and accomplishments made to the organization. This information is important for the annual review period. Using annual performance reviews to determine pay raises helps because associates will be aware of what was expected of them, how their performance was be analyzed, and how they will be rewarded for their efforts.

There are specific areas that individuals will be rated on: quality and quantity of work, communication, personal relations and teamwork, and dependability, to name a few. Depending on the employee's final rating, a raise may or may not be given. An overall performance rating of 2 (mixed results), 3 (consistently successful), 4 (highly Successful), or 5 (among the best) are eligible to receive an increase in salary. Associates that receive an overall performance rating of 1 (unacceptable) are ineligible to receive an increase in pay. However, management can review their performance after six months to see if it has improved. If so, management can request an increase at that time.

Departmental Performance, or group performance, is another method Wellpoint Inc. uses to grant salary increases. As a group, essentially we are responsible for ensuring each employee in the department work towards a common goal, which is to achieve success for the organization. Group pay is used for a variety of reason. It encourages behaviors that will aid in achieving goals and objectives set for the department. This includes providing support for the team members, sharing information that becomes available, monitoring the performance of other associates and