: Xcel Energy Pays For Employees Who Excel Essay

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Running head: XCEL ENERGY PAYS FOR EMPLOYEES WHO EXCEL Xcel Energy Pays for Employees Who Excel Kimlyn Corridon Kaplan University AB203: Human Resources Management Jessica Marino July 23, 2011 Xcel Energy Pays for Employees Who Excel Introduction This case is about the importance of Excel organization improving by implementing incentive plans that will save the organization money and keeping their employees motivated to maximize output. Review/Analysis of the Case I agree that Excel’s strategy of implementing a merit plan is better than paying for suggestions. Merit pay plans offer the following: directly ties pay to some important measure of company performance, results in productivity improvements when installed, appropriate for all groups of employees, improves communications and teamwork among employees, increases employee awareness of the big picture, improves job satisfaction and employee relations, increases employee participation through involvement in merit pay. “Are Merit Raises Really Based on Merit” Personal journal 65, no.3 (1986), pp.88-85. To continue to encourage suggestions from employees and what would benefit them and the organization would be profit sharing. Profit sharing is incentive pay in which payments are percentages of the organizations profits and do not become part of the employee’s base salary. Profit sharing may encourage employees to think more like owners. However employees may not react positively and may have a lot of questions. To enlighten the employees the manager should let them know the benefits of profit sharing. If the organization is experiencing financial difficulties the incentive pay will be small or to nonexistent, so employers may not rely much on layoffs to reduce cost. Also computing and dividing the profit sharing bonus is included in the union contract. J. Chelius and R. S. Smith,

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