Organization performance pay includes the following three components:
• Profit sharing: A formal pay program in which a firm provides bonus payments to employees based on the profitability of the firm.
• Employee stock plan: A plan through which employees are provided with option to purchase shares in their employer at a fixed price within a limited time period.
• Long term incentives: A type of performance pay in which the incentives are tied to an organization performance horizon that ranges beyond one year, often three years to five years.
The basic aim of organizational performance pay is to promote organizational citizenship behaviour, membership behaviour and positive group norms. As in the case of Fit Stop we can clearly see that they will be trying to follow the high involvement management style as they want their employees to be motivated so they can provide exceptional service to the customers. In this case the organizational performance pay is optimal because it will motivate the employees to do whatever it takes to work effectively and efficiently so that they can achieve the organisational goal.
The organizational performance plan that is most appropriate according to my knowledge is employee stock plan. As the company is in its initial stage and it will take time to establish its place in the market and start earning profit, the profit sharing plan will not motivate the employees to an extent and even if it will create a temptation for the employees, there will be a liability on the company which is still in its initial stage, actually not good for the reputation of the company too. Through employee stock option plan, employees will have the ownership share in the company and will create a feeling that they are working for their own company which will have a positive impact on the output. Stats prove that the companies that provide employee stock option plans to the employees grew 11 to 17% faster than their competitors. Most importantly this will serve the purpose of reward to the employees and for the employer/company there is no actual outflow of cash. In the initial stage of the business like Fit Stop in this case will have some financial problems so it is very important to keep ideal cash in the business so that it can be used efficiently in times of need?
In my opinion, to motivate the employees to work efficiently to best of their knowledge and skills, it is very important to choose the best method of motivation. Some employees will see monetary forms of motivation more beneficial and others will expect the non monetary forms of motivation. While selecting it, we have to be very careful and set it in a way that it suits best for everyone in the organization. In this case, according to the information provided, I think employee stock option plan will serve the purpose in the best possible way.