This is to study and analysis the influences of annual pay system on the organizational performance by conducting empirical survey against small and medium sized companies located in Chung nam/ Daejeon areas that either have introduced or will introdu...
This is to study and analysis the influences of annual pay system on the organizational performance by conducting empirical survey against small and medium sized companies located in Chung nam/ Daejeon areas that either have introduced or will introduce annual pay system in near future.
The purposes of this study are implied as follows:
① to explore the theoretical foundation of annual pay system, organizational performance and the relationship between both factors through literature review and theoretical research,
② to analysis the relationship between annual pay system and organizational performance by conducting empirical survey.
③ to suggest effective introduction and implementation of annual pay system for businesses in Korea.
As the result of this study, herewith would like to suggest effective institutional and operational method for annual pay system as follow:
① As the annual pay system stimulates employee's motivation, it is desirable to implement annual pay system which positively affects business results such as economical, psychological, managerial performance.
② Most respondents are concerned about performance appraisal equitable in terms of introduction of annual pay system. Many people are to participate performance evaluation sessions which means that evaluation is made by their own self.
③ Most respondents believe that management by objectives(MBO) is helpful for enhancing equity and reliability of performance evaluation, and that team system will be supportable for building cooperative system in organizations. Therefore it is recommendable to implement MBO system at the same time when annual pay system is being introduced.
④ It is possible to include overtime allowances to annual salary amount through collective bargaining with labor union, which will be beneficial for the livelihood of union members.
In conclusion, the introduction of annual pay system will be greatly helpful for competitive advantage of Korean businesses. However executives and managers have to consider to be secured the precedented conditions at the same time, those are implementation of equitable performance evaluation system such as MBO as well as participative management system such as building team system.