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General Motors Presentation

Performance and Reward Management

Katie Lipari

on 2 October 2012

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Transcript of General Motors Presentation

Chilliemi, O. (2007). Competitive versus collective incentive pay: does workers’ mutual concern matter? Economic theory, 35, 175-186. doi: 10.1007/s00199-007-0222-y

Fang, M., & Gerhart, B. (2012). Does pay for performance diminish intrinsic interest? International journal of human resource management, 23(6), 1176-1196. doi:10.1080/09585192.2011.561227

Fedrau, R. & Balfe, K. (1986). The impact of technology on work: The factory of the future. Journal of career development, 12, 286-299.

General Motors (2011). Career planning and development: Strategies and tools for owning your career. Ecuador.

General Motors. (2012a). About GM: Our company. In General Motors. Retrieved September 6, 2012, from http://www.gm.com/company/aboutGM/our_company.html.

General Motors. (2012b). 2012 Team GM plan para rendimiento. Ecuador.

General Motors. (2012c). 2012 CAP IDP enhancement: Implementation of the individual development plan (IDP). Ecuador. References Abdulkadir D, Isiaka S, Adedoyin S. (2012). Effects of strategic performance appraisal, career planning and employee participation on organizational commitment: An empirical study. International Business Research, 5(4), 124-133. doi: doi:10.5539/ibr.v5n4p124

Adekola, B. (2011). Career planning and career management as correlates for career development and job satisfaction A case study for Nigerian bank employees. Australian journal of business & management research, 1(2), 100-112. Retrieved from: http://web.ebscohost.com.libraryproxy.griffith.edu.au/ehost/pdfviewer/pdfviewer?sid=13f9e7bf-75d2-434d-bbd8-5f117bfc2e63%40sessionmgr14&vid=6&hid=12
Beverly, K. (2010). Career development. Leadership excellence, 27(1), 96-107.

Boachie-Mensah, F., & Dogbe, O. (2011). Performance-based pay as a motivational tool for achieving organisational performance: An exploratory case study. International journal of business & management, 6(12), 270-285. doi:10.5539/ijbm.v6n12p270

Bragg, D., Dresser, L., & Smith, W. (2012). Leveraging workforce development and postsecondary education for low-skilled, low-income workers: Lessons from the shifting gears initiative. New directions for community colleges, 157, 53-66.

Chevrolet. (2012a). Nuestra compania. In Chevrolet. Retrieved September 6, 2012, from http://www.chevrolet.com.ec/mundo-chevrolet/empresa/nuestra-compa%C3%B1ia.html.

Chevrolet. (2012b). Chevrolet en el 2010: Resultados que demuestran liderazgo y proyecciones que imponen tendencias. In Chevrolet. Retrieved September 6, 2012, from http://chevrolet.com.ec/mundo-chevrolet/noticias/2011/02/chevrolet_en_el_2010resultadosquedemuestranl References Performance-based pay

Based on individual achievements
High payment for high levels of performance
Reduced payment if performance is less than expected Monetary Incentives and GM Presented by: Alejandro, Ida, Charles, Are, Katie and Andrea Phillip, J. (1986). Employee development programmes: The US auto approach. Personnel review, 25(2), 35-49.

Read, D. (2005). Monetary incentives, what are they good for? Journal of economic methodology, 12(2), 265-276. doi: 10.1080/13501780500086180

Richard, G. V. (2005). International best practice in career development: Review of the literature. International journal for education and career guidance, 5, 189-201.

Root, L. S., & Dickinson, K. K. (2009). Joint labor-management programs in the auto industry and the shaping of human services. Journal of workplace behavioral health, 24(1), 45-60.

Watson, M. (2012). Career development: Global issues and challenges (Eds). Nova Science Publisher, Hauppauge. References General Motors (2012d). Main components of remuneration. Ecuador.

Gerhart, B., Rynes, S. & Smithey Fulmer, I. (2009). Pay and performance: Individuals, groups, and executives, The Academy of Management Annals, 3(1), 251–315.

Kocabıyıkoglu, A., & Popescu, I. (2007). Managerial motivation dynamics and incentives. Management science, 53(5), 834-848. doi: 10.1287/mnsc.1060.0640

London, M. (2011). Relationships between career motivation, empowerment and support for career development. Journal of occupational and organizational development, 66(1), 55-69

Madhani, P. (2011). Realigning Fixed and Variable Pay: Compensation management, SCMS Journal of Indian management, 5-17.

Milkovich, G., Newman, J., & Cole, N. (2010). Compensation. (3rd CDN ed.). Whitby: McGraw Hill Ryerson.

Morrell, D. L. (2011). Employee perceptions and the motivation of nonmonetary incentives. Compensation and benefits review, 43(5), 318-323. doi: 10.1177/0886368711407998 References 1. What percentage of an employee’s pay do you feel is fair for a company to offer as performance pay versus base pay? Why?

2. Should an employee’s pay be based upon their position or their performance?

3. Do you think the IDP should be directly tied to objective metrics?

4. Do you feel high percentages of individual pay affects the group work atmosphere? Discussion (Milkovich, Newman & Cole, 2010; Chilliemi, 2007; Kocabıyıkoglu & Popescu, 2007; Morrell, 2011 ) Tie performance-based pay to group incentives

Increase and further utilise intrinsic motivators to increase performance

Utilise skill-based pay structures for employees awaiting promotion

Include contingencies in the performance systems to compensate for external forces

Extending long-term incentives to lower tier workers other than exclusively executives. Recommendations Career Development Plan in GM (General Motors, 2011; Phillip, 1996; Root & Dickinson, 2009) Individual Development Plan (IDP)– Part of the Commitment and Partnership Accountability (CAP) Overview
Assessment and review of current competencies and knowledge gaps
Aims to get employees explicitly focused on career aspirations
Gives employees information on jobs they desire at GM
Gets employees thinking beyond training, i.e. stretch assignments, mentoring
Highly flexible and dynamic system
Team GM Recognition Description (Non-monetary Program) Career Development at GM and GM Ecuador (Beverly, 2010; Richard, 2005; Watson, 2012) Potential Benefits ( Fedrau & Balfe, 1986; London 2011) Allows individuals to manage their future development throughout a lifetime

Creates an individual work identity

Prepares an individual to focus on their current skills and attributes and identify what they need to do to pursue different roles Career Development (General Motors, 2012c) Partnership between the employee and manager in which developmental goals are identified and progress is regularly tracked

With the help of a coach, it determines what knowledge, skills and competencies are needed to be successful

Goals can be added and edited to accommodate for changing jobs/plans

Mid-year and year-end progress in development is documented

Creates focus on current or future roles Implementation of the Individual Development Plan (IDP) (General Motors, 2012b) Developing the Performance Pay Structure Local plants (Ecuador) prepare their annual budget which is presented together with the other 4 regional budgets in order to have the global approval.

After being revised, the Perfomance Pay structure is presented to the Board of Directors for approval.

The Performance Pay structure must match the business plan in order to be approved (General Motors, 2012a; Chevrolet, 2012a; Chevrolet, 2012b) GM produces and sells cars and trucks through the following brands: Chevrolet, Buick, GMC, Cadillac, Baojun, Holden, Isuzu, Jiefang, Opel, Vauxhall and Quling

In 1987, GM began operations in Ecuador. Currently it is the leader in Ecuadorian vehicle’s market share, assembling and commercialising vehicles under the Chevrolet brand.

GM Ecuador has the highest market share of all GM plants globally, obtaining 41% of the market General Motors (General Motors, 2012a) Founded September 16, 1908

General Motors passion is to design build and sell the world’s best vehicles

GM has 202,000 employees all over the world in 158 facilities spread across 120 countries in 6 continents, with more than 50 languages spoken.

GM products vary from electric cars to heavy-duty full-size trucks. General Motors (General Motors, 2011; Boachie-Mensah & Dogbe,2011) Individualised Incentives Plans of GM (Bragg, Dresser, & Smith, 2012; London, 2011; Watson, 2012) Factors that influence career development:
Personal characteristics
Socio-economic factors
Physical and mental abilities
Change factors
Job market Career Development (Read, 2005; Morrell 2011) Money or other tangible objects

Monetary incentives can affect behaviour in diverse ways, these all stem from their influence on one of three factors:
Cognitive exertion
Motivational focus
Emotional triggers

Although monetary incentives generally improve extrinsic motivation, they have been shown to be detrimental to intrinsic motivation Monetary Incentives (Gerhart, Rynes & Smithey Fulmer, 2009; Madhani, 2011) Variable Compensation: is a one-time earning that must be re-established and re-earned each performance period; can be short-term or long-term.

Individual Performance: Individual pay provides results-based (rather than behaviour-based) rewards. Performance Pay Structure (General Motors, 2012d) - Non-monetary program

- Recognition certificate TEAM GM RECOGNITION DESCRIPTION - Assessment of competencies & knowledge

- Information on possible employment
training, mentoring, etc. INDIVIDUAL DEVELOPMENT PLAN (IDP) GM and Career Development (General Motors, 2012d) Monetary Incentives and GM Thank You! General Motors What is GM doing with Monetary Incentives? 1st step Spark Performance Based Pay (cc) image by nuonsolarteam on Flickr GM
Plan High Performance
High Payment Low performance
Low Payment (General Motors, 2012d) (General Motors, 2012c; Abdulkadir, Isiaka & Adedoyin, 2012; Adekola, 2011)
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