4.2 Value creation and enhancement process
4.2.4 Compensation
production process is only possible in the presence of electric power. Any intelTuption has an immediate impact in the performance of the firm.
All other constraints have also an impact in the performance of the company directly or indirectly where eventually decrease its value.
The information of what managers are doing in overcoming these constraints would have a valid contribution to the analysis; unfortunately the researcher didn't include such question in the questionnaire.
Sea Bottlers Share Company is one of the three compames composed in this industry employees are highly paid in comparison to the employees in other industries in Eritrea.
However, the living standard is increasing and employees complain that the wages they receive are not enough. Employees also get incentives such as bonuses, monetary, as well as non-monetary, and other social benefits. Based on the collective agreement of the companies and their labour union, employees are entitled for a bonus depending on the accounting profit of the fiscal year.
Employee perforn1ance and thereby value of the company will be affected if the basic salary and other benefits are not good enough to make employees of the company satisfied. The basic reason for an employee to be employed is to earn money so that he is able to sustain his life and family. Therefore the up and down of his salary and other benefits has direct relationship with the up and down of his life and family. In the above paragraph it is observed that the basic salary of the beverage industry of which Red Sea Bottlers is one is relatively higher than other industries in the country. This definitely has a positive influence to impart a positive behaviour for the employees to love their company and as a result will be willing to commit themselves in the company. This has a direct influence in increasing the value of the company.
On the other hand whenever the purchasing power of money is decreased due to inflation, the company should be able to adjust the wages and salaries to equalise the standard of living.
Employees should not be victimised by the prevailing inflated market. The value of their salary should remain constant to keep their morale untouched. When we see the interview made by S. Hailemariam employees are complaining about the high standard of living resulted by inflation. This may show that the company is not adjusting the wages and salaries parallel with the prevailing condition. Indeed this may have a negative influence on the perforn1ance of the employees, which eventually impact the value of the company.
In addition to the basic salary companies give incentive to the best performers to encourage employees to work hard and perfom1 maximum. The company gives bonuses, sales commission, and product gifts on holidays. If employees have a share from the profit of the company, it is more probable to believe that these people will perform well and increase the value of the company. Giving bonus is a good incentive to the company's workers as a whole.
But this has a less effect on the individual perforn1ance for it is not aimed to reward the best
performers. Hence it has not a significant role to act as an incentive scheme. Similarly the gifts on holidays have the same implications. Every one of the company employees will be granted a gift on holiday regardless of his performance. This has no direct relationship with the performance of the worker and therefore will not have a visible impact on the result of the company's performance. On the other hand sales commission may be taken as a good incentive scheme. This is because it has a direct relationship with the number of sales. If the sales person sells more he will be rewarded more and if less rewarded less. Hence he will be motivated to work hard to earn more. This system has definitely has a direct impact on the result of the company. Sales force will strive at most to increase sales, which eventually increase the value of the company. Just as the sales commission, it is recommended that all the departments introduce incentives, which reward the high performers of their place. For example production division could set monthly targets that are only achievable by good performers. And therefore the Division will reward those who beat the target. An incentive should be linked with an individual performance so as to influence the overall performance of the company.
To further use employees potential in the company, the incentive of the company should not be limited in money. One of the dynamic understandings on the psychology study is people's need of recognition. Employees need to be recognised, to belong, to be accepted, and be seen as the greatest asset of the company and so on. Therefore as part of incentive the company management should be able to empower their workers by incorporating the social aspects of their employees in the working environment of the company.
Promotion and how it is executed has a motivating impact for employees. Keeping this in mind on what basis an employee is promoted was asked (Question number 13) to Red Sea Bottlers Share Company managers using the questionnaire. According to the responses of the General Manager, Financial Manager, and Human Resource Manager, Promotion to employees is based only on merit. While the other division mangers include seniority in addition to merit in promoting an employee. If length of working experience couldn't add in the knowledge and skill of a particular employee the length of time in the job in itself is nothing more than the people without the working experience. Therefore the use of merit as basis for promotion has a stronger power of motivating employees to invest time and energy in them-selves to display their capability in the work area.
Every employee has an inner drive to walk to the next upper ladder. The highly motivating environment may help every individual employee to realise his dream in where he is employed. If the job he is currently placed is the source of frustration when alternative options are found he will be the first candidate to leave the firm. In addition to that, the biggest asset in this planet is the mind of human being. What ever changes displayed in our planet is the result of combined minds of our world. Though some individuals are able to penetrate the intense environment, most need motivating environment to trigger their creative abilities.
Therefore for employees' improvement, every one of them should be promoted when they are deserved to be.