W.L. Gore & Associates is a company well known for its GORE-TEX fabric for protective outerwear. In 2006, the company ranked fifth on Fortune’s list “100 Best Companies to Work For.” It was the eighth year in a row the firm had made the list. One of Gore’s hallmarks is innovation. Rather than job titles, bosses, and organization charts, Gore uses a team approach, with leaders, sponsors, and team members. The goals of Gore’s compensation plan are internal fairness and external competitiveness. Gore uses two approaches to achieve these goals. The first is straightforward and typically used by companies: comparing pay at Gore with pay for comparable jobs at other companies. That takes care of the external competitiveness part. It is the internal competitiveness part that is different at Gore. The process works like this: Associates (co-workers) on the same team rank each other based on contributions to the company for the year. Team members can provide comments to support their rankings and identify strengths or areas for improvement of the associates they rank. This information is then used for determining raises. Provide a critique of the compensation practices at Gore, indicating the pros and cons of each approach. Do you think that Gore can achieve its goals of internal fairness and external competitiveness with the two approaches used? Would you want to work for this company? Why or why not?

While analyzing Gore’s compensation practices, we can understand that Gore follows the similar approach in ensuring external competitiveness like other companies and only the exception is in the internal competitiveness approach where the associates can rank each other. The pros and cons of each approach are given below.
Approach to ensure external competitiveness
Pros
Comparing the pay with other companies ensures wages more than the minimum wage set in the industry
Helps to avoid employee dissatisfaction over less pay while comparing with others in the industry
Company need not spend extra on wages as the compensation system does not demand high wages
Cons
The compensation system would not help to improve employee commitment as the company does not have a compensation package different from other companies in the industry which can motivate the employees.
The compensation system does not consider the capability of the company to pay the wages and does not consider increasing the wages when the company achieves high profit. The compensation can be lower than what the company can pay or higher than what company can afford as it depends on other companies.
Pros and Cons of approach to ensure internal competitiveness
Pros
The associates can identify the performance of each employee better than anyone and can provide an effective feedback on strength and weakness of the coworkers
Less burden of performance assessment on managers
Cons
Favoritism may affect the compensation system as the associate feedback may depend on their relationship with whom they are rating.
The approach may lead to conflict among the employees and affect their relationship
Gore can achieve external competitiveness by comparing the pay with comparable jobs in other companies. But in my opinion it will be challenging to achieve internal competitiveness with the current method. There are chances that the associates may not provide their genuine feedback on each other’s performance. When the salary hike is based on the information received from the coworkers it may affect the employee relationships and may lead to conflict when some employees receive less compensation compared to others.
I do not want to work for this company as I cannot find any factor that would motivate me in their compensation system. I do not want my coworkers to rate my performance and decide my salary. I prefer the system where my performance is rated by my supervisor based on data and the challenges in performing the job.
 
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