About Pay for Performance in the Real Estate Industry

Regardless of the business, pay for performance packages, also known as merit-based compensation, are said to be effective at motivating people to work hard (Armstrong and Taylor, 2014). A systematic adoption procedure from the human resource management based on factors is required to accomplish this. They involve understanding the function of line management, motivating employees, developing resources, and providing rewards (Kavanagh and Johnson, 2017). With this in mind, the purpose of this paper is to delve into the human resource management franchise relative in the management of employees and how its operations affect product quality in addition to better performance in staff members in real estate industry.

Human Resource Management: Role of Human Resource Department

The endeavor of the human resource department in real estate is to manage people within the businesses amassed in the industry. To achieve such successful management requires prerequisites in the administration of resources segregated in managing the workforce (Marchington et al., 2016). Such events include the hiring, training, recruitment as well as coordination of the benefits suggested in motivating the employees. All this, is in line with the achievement of the goals and objectives of a company (Budhwar and Debrah, 2013).

Literature Review

1. Hiring and Recruitment

The primary duty of the human resource department to recruit as well as hire employees who are qualified to fill in positions created within the business. According to Aswathappa, (2013). These are sales and marketing team, administrators as well as executive individuals. Therefore, the department is tasked with the initiative to scout, list, short-list and hire the people who will fill in the positions efficiently. It entails the posting of jobs to the public or to the company itself (inside marketing) through advertising, screening the applicants as well as conducting the preliminary interviews as well as coordinating the effort in the hiring process with the line managers

a. Ensuring safety of employees

According to the Occupational Safety and Health Act, it is mandatory that the safety of the employees, both physical and mental is maintained under the working conditions of the company. The efforts involves the training of the workforce as well as retaining the Federally mandated roles such as reporting of any injuries or mistreatment of workers. The idea is to ensure that the human resource department works closely with the workforce to maximize the benefits accrued to the staff (Chelladurai and Kerwin, 2017).

b. Employee relations and Compensation and Benefits

Unionization of employees is provided within the law, and the human resource department has to cater for that. Hence, some specialists handle the administration of member relations such as work function of growth of management retort to union establishing campaigns, compromise collective bargaining agreements and the rendering of interpretations of labor union contract issues (Gatewood et al., 2015). The benefits and the compensation portion of human resource management are touched by one human resource professional who has dual expertise. They include the setting compensation structures as well as evaluating the competitive pay structures (Brewster and Hegewisch, 2017).

2. Strategic Planning

Strategic planning within the human resource department is necessary for ensuring that resources dedicated to the employees are well distributed and well utilized. Hence, it requires decision making in achieving the goal as well as the mission of the business such as selling a certain proportion of real estate within a given period based on (Storey, 2014). To do so requires the creation of roadmap which acts as a guide to the achievement of the goals as well as objectives of the business. For instance, according to (Knowles et al., 2014). with the recent upgrade in real estate market, necessities for the real estate companies to find ways in motivating their employees to sell more real estate due to the cut throat competition

3. Resource Development

Within the human resource department, there is the requirement to improve on the skillsets of the workers as well as the general organization through empowerment of knowledge and abilities. They include a decision on planning on how to do this which entails coaching, mentoring and succession planning. Sparrow et al., (2016), states that development of a superior working force is necessary for the organization and especially to the workers to achieve their work goals

4. Motivation and Reward

The role of rewarding and motivation of employees create goals of earning more for the employee as well as rewarding the employee as a motivational gimmick to perform better (Renwick et al., 2013). Hence, works as an incentive to motivate the employees to work harder and achieve higher than expected prospects. Moreover, requirement is placed that there is less turnover in employees primarily within the real estate industry (Purce, 2014). It is only right to provide for motivation and compensation packages in the real estate due to the competition and work ethics that are required from the employees (MacArthur et al., 2014). Finally, self-motivation for the employees is manifested to ensure that their performance is higher than what they usually expect thus, increasing the profitability of the company (Bamberger et al., 2014).

Role of Management in Promoting Efficiency in Work Performance

The success of an organization is not dependable on the right strategy and resources on the workforce; hence, relies on the performance management of the administrators (Steffen et al., 2015). The goal to this is that it allows the employees to grasp the intent of the goals and objectives of a company. Hence, there ought to be an effective goal setting system which comprises of a goal tracking of the progress as well as managing the day to day activities of the workforce (Bamberger et al., 2014). Hence, the role of the line management in achieving highly motivated workers is done through aligning of the employee’s day to day activities with the suggested business ‘objectives such as the clarification on the accountability of performance expectations for the employees (Anderson, 2013). Also, brings about the creation of documentation for legal purposes to support the decisions as well as any disputes that may arise (Brewster et al., 2016).

Due to the high competition in the real estate market, the adoption of the pay for performance in the industry may be seen as the best option for motivating the employees (Cummings and Worley, 2014). Nonetheless, there is discretion that comes to handling the pay for performance in a new market segment unlike in the health sector (Reynolds, 2017).

Pay for Performance Model: Disclaimers in its Introduction into the Real Estate Industry

One of the critical disclaimers in the adoption of the pay for performance policies or models is that they are reliant on the type of industry and size of employees. The reason is that regard for an employee is to benefit then the employer and help as well. There are numerous forms of pay for performance (Urech et al., 2015). They include the compensation annual salary increase which is based on the assessment of the employee’s productivity during the year. It is judged as being better and merits an increase in yearly salary (Park et al., 2016). There is also the bonus program or the system (Chi et al., 2016). The reward system works only to the superior employees, who work efficiently and bring in more margins than any other employee or employees combined. Also, there is the direct compensation for quantified production (Bardach et al., 2013). But, this does not affect the real estate since it is more inclined to the production industry such as steelwork production (Zyung and Sanders, 2014).

Base Compensation

However, to reward and compensate the employees, the pay for performance models or policies are only inclined towards specific disclaimers (Rajaram et al., 2015). For instance, there is the base compensation. Base compensation means that there are determinant factors that contribute to a worker being compensated. In most cases, basis on the number of years a worker has been loyal to the company (Eijkenaar et al., 2013). With the recent downturn in the real estate market due to the economic crisis may not factor in as much since most people lost their positions or relocated career-wise. But, sure posts may warrant base compensation. For instance, in real estate, there is the provision of commission (Figueroa et al., 2016). In the real estate market, salesmen and women are provided with a specific charge on the sale of property or land (Eijkenaar, 2013). The Commission is an exception to the rule and may require that the company pay the employee based on the number of houses sold as a motivation to sell more (Francis and Clancy, 2016).

Logical and Clear Expectations

Another disclaimer in the issue on adoption of a pay-for-performance program is that there is a list of expectations (Gregory-Smith et al., 2014). Therefore, it may be clear that employees can only be paid based on their sales. Such set standards that may be demotivational to the employees especially those unable to cut into sales (Ederer and Manso, 2013). However, the idea is to motivate employees to perform at higher levels which may increase healthy competition ( or sometimes bring negativity in performance) affecting the overall performance of the business (Ederer and Manso, 2013). Hence, there should be some caution placed in the enactment of pay-for-performance programs to avoid such negativity within the workplace and only promote the best for the employees (Pieroni, 2014).

Measurable Outcomes

Pay-for-performance possesses the qualities of measurability. In the case of real estate, sales jobs are more prominent (Starfield and Mangin, 2016). The number of sales, number of clients, or the total revenue accrued within a given time frame contribute to the outcome of the goal and objectives (Pieroni, 2014). Therefore, there is some requirement that managers ought to exercise discretion in determining the performance pay in such situations. To do so there is the need to create a performance that is measurable to achieve the outcomes (Barlas, 2015).

Rewarding System

The rewarding system varies depending on the number of employees as well as the industry (Doran et al., 2014). In this case, the reward system maybe lockstep based on the numerous set amounts that are required to be achieved in particular discrete performance levels in certain distinct performance levels (Vermeulen et al., 2016). It includes bonuses to aid the sales team to make more in the work positions. In this case, the rewards may be proportional to the performance, such as the commission granted to a salesperson (Epstein et al., 2014). In this case, some of the pay-for-performance programs can include non-monetary compensation as well as time off or professional development through paid for training (Eijkenaar, 2013).

Conclusion and Recommendations

The pay for performance policies are guidelines through which the connection of performance in addition actual salary are related. In such situations, the advantage is bringing about the setting of the instructions to address the issues of the wage increase, bonuses as well as setting other incentives for the employees. In the real estate industry, as the paper has described, a lot is riding on the motivation of employees due to the cut-throat competition that resonates within the industry (Navathe et al., 2016). Hence, it is all in the use of the pay for performance system that evades disadvantages for the performance of the drop-offs when using the policies for the business.

One of the recommendations is that the business should use a pilot model to ensure that the employees adapt to the new system if it was not in existence before. It means that the employers have to comprehend the merits and the demerits that come with the adoption of the program to the employees as well as how it would affect the overall performance of the business. Moreover, there ought to be a performance measurement strategy through which the employers determine whether the adoption of the pay for performance system works best for the business or it does not.

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