An important part of a high-performance Work system is the compensation package. Because, in todays fast-paced, rapidly growing business environment, survival truly does depend on being the fittest. For companies, this means performing at the highest level possible to be more flexible, more competitive, and ultimately, more successful than the rest of the field. Since high-performance work systems ask many different things from employees, it is hard to come up with one single approach to pay that works for everyone. Special attention should be made to the design of the organizations compensation plan, making sure it supports organizational goals and does not bankrupt the company. .
For the past several years, companies have strived to change the way work is performed and business is conducted. So, many companies have been experimenting with alternative compensation plans that link pay and performance to employee incentives. For example, for Saturn employees an average of 10 percent of their pay is linked to goals for quality and training. .
Meeting today's competitive demands is a lot easier when firms adopt high-performance workplace practices that are linked to employee compensation plans. These are practices that let .
front line workers make wise decisions. By compensating employees with incentives that motivate them to use their imagination, creativity, enthusiasm, and knowledge to improve efficiency, and quality it makes for a more proficient organization. .
Some organizational incentives such as gainsharing, profit sharing, and employee stock ownership plans focus employee efforts on outcomes that are beneficial to both themselves and the organization as a whole. An example of gainsharing would be; school faculties that found a way of providing a lower cost for the same quality services could receive a portion of the cost-savings, with the rest of the funds going toward instructional materials.