TJ Company Performance Management And Compensation Management Diagnosis And Design

Since 2004, TJ Company has been growing fast. Annual sales have increaseddramatically from RMB200 million to almost RMB 700 million while the number ofemployees went up from 900 to 3000. Its sales, capacity, and employees will at least doublein the coming 2 years of development. A large number of talented employees are thereforedemanded to apply for such rapid growth as well as implementation of company strategies.For this reason, human resource and human resource management (HRM) play a vital role toa company in terms of its strategic position. As can be seen, how will the company attract,hire, train, motivate and retain quality employees will be significantly important to HRM, andin which compensation system and performance management are aspects to be emphasized.The task of this essay is to try to diagnose the Compensation Management and PerformanceManagement of TJ Company. Further more, based on the result of diagnosis, we can illustratea system of Performance Management and Compensation Management that can be suitablefor TJ Company and other similar enterprises.This essay is based on Equity Theory, Motivation Theory, and Organizational Behavior,to analyze the company's Performance System and Compensation System. Start with majorapproaches of Performance Management and Compensation Management, and then collect,summarize, count, analyze the vast data from the company; To find out and sum up theproblems and causes of the TJ Company's Performance Management System andCompensation Management System has. So that based on Equity Theory, design andconstruct a Performance Management System and a Compensation Management System thatcan improve the justice among employees as well as motivate them.The author has considered that in order to improve the efficiency of HRM, and to provide security for organizational goals from HR point of view, it is necessary to establishreasonable and scientific system of Performance Management and CompensationManagement. This essay has taken into account of the current situation of the enterprise,designed a mixed KPI Performance Management System that is consisted with a basis of JobTasks, BSC frame, core of Management by Objective, associated with Critical IncidentMethod and Compulsive Ranking Method; A Compensation Management System that isintegrated with a basis of Job Wage and Skill Wage, adjustment with market coefficient, dailypayment adjustment based on performance appraisal. These two systems will give advantagesof better refection and appraisal of contribution of employee, to strengthen employee'sresponsibilities to company, help the organization to attract and retain people with ability, toincrease company's human capital, and give foundation to the company's competitiveadvantages.The creativity of this essay is consisted with analyzing the system of PerformanceManagement and Compensation Management of TJ Company by using Equity Theory, aswell as suggesting a plan to improve these two systems based on Equity Theory.We hope the exploration of this essay can be used by most companies as a goodreference to improve both their Performance Management & Compensation Management.