The Merit of a Points-based Merit System at the Edwards School of Business
(8 pages of text)
A new faculty member is engaged in a decision-making process surrounding the development of a points-based system designed to allocate merit pay at a business school. The process is forcing her to evaluate how she is structuring the allocation of her work, which is directly affecting her motivation toward coaching a student case competition team. Edwards has historically used a judgment-based approach to the allocation of merit. The case outlines the rationale used in the design of the new points-based system, discusses the potential advantages and disadvantages, and highlights the perspectives of different stakeholders throughout the process, including the union, the faculty, and senior administration. The union is opposed to merit, so has outlined fairly stringent criteria for the awarding of merit in the new collective agreement. Faculty opinion is mixed surrounding merit more generally, and the implementation of a points-based system versus a judgment-based system in particular. Senior university administration is committed to the continuation of the merit system at the university as a tool to reward outstanding performance and to retain star faculty. The individual departments at Edwards are in the midst of finalizing the standards and procedures for allocation of merit-based pay. The protagonist is uncertain about how her department will proceed in the design and allocation of points, and how it will result in her re-allocating her work tasks.
This case can be used in a core undergraduate course in human resource management in units examining pay-for-performance compensation and performance management, or in standalone courses in these areas. It may even be more useful for MBA or senior-level courses in strategic human resource management due to the range and complexity of the issues explored. It also has some potential for use in industrial relations courses if examining union responses to human resource practices generally, and pay-for-performance initiatives in particular. The key learning objective is to have students understand the philosophy behind performance-based incentives, their alignment with organizational objectives, and their potential impact on individual performance. The case requires students to engage in critical-thinking exercises with regards to the development of performance metrics for autonomous knowledge workers. The case will be most effective when tied to the teaching of different theories of motivation and/or the importance of aligning HR practices with overall organizational strategy. Potential case exercises include having students identify ways to implement and/or improve upon the pay-for-performance system proposed at Edwards.
Saskatoon, Saskatchewan, Canada, Medium, 2010
$5.30 CAD / $5.00 USD Printed Copy
$4.50 CAD / $4.25 USD Permissions
$4.50 CAD / $4.25 USD Digital Download