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Jp Morgan Case Study

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JP Morgan Chase & Co. founded by J. Pierpont Morgan, is the oldest and the largest financial service firm having operations in more than 100 countries around the globe. Its origin date back to 1854 when Junius S. Morgan joined a London based banking business headed by George Peabody. Junius took control of this firm and later changed its name to J.S. Morgan & Co. in 1864 after George Peabody retired. Later he found his own company in partnership with his cousin, J. Pierpont Morgan & Co. This company traded in foreign exchange and government bonds.
After Junius’ death, Pierpont Morgan took over the company, which was reorganised in 1895 becoming one of the most powerful banking firm in the world which helped to transform the United States …show more content…

This then motivates the person to generate more revenue. Due to this, the employee makes sure that he/she carries out his work more efficiently to earn more. To achieve this, the employee reduces his/her idle time and spends it in a productive manner. Also, In J.P. Morgan chase (India) employees are paid bonus every quarter. The performance scorecard determines the monthly incentive. Those in the top 25% of performance gets the highest bonus, next 25% gets little less and so on. The lowest 25% gets nothing. After the end of each quarter factors like operating principles and their future development plan are discussed in meetings, which determines the bonus. This definitely motivates employees to do hard work and achieve their team goals.
Merit Pay or merit raise is an increment awarded to employees based on performance, but this is different from bonus. This usually becomes the part of the base salary given to the employee. It is adapted to two different manner, first, where lump sum merit payment is awarded at the end of the year and is a percentage of annual salary given to the employee. Other adaptation is dependent on both individual and organisation …show more content…

Morgan takes a lot of initiative in employee motivation adapting different techniques.
Paid holidays are determined by the number of years an employee has served in the company and his/her position in the management hierarchy. Six paid sick days are granted in a year excluding two paid personal days and ten paid bank holiday, depending on the line of business the employee works in. Also, employees can access to the Employee Assistance Program in case they experience any personal problem affecting work life, for example health issues, financial problems and many other. Healthcare and basic life insurance service is also provided to the

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Risks associated with the reward system that employees must be prepared to accept in the package are reducing of income and allowances, tax implications that are potentially costly with the incentive pay and last but not least overstated availability of incentive pay during designing of reward system and earning less at the end of the reward period due to budget constraint. Incentive pay should fully replace traditional pay. Incentive pay is awarded based on the unit or group to which an individual belongs in reaching a set goal.

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Teamwork: Teamwork in a company is vital for the success of a company. Financial incentives like bonuses can inhibit teamwork since under such schemes, individuals may be rewarded rather than teams. For example, several firms give bonus on bases of the amount of work performed by the individual (Roland, 2003). This means that employees would eventually learn to hoard work than to share it for the welfare of the organisation and in this way, the overall productivity of the company may be affected. Burn-out of employees: Another disadvantage associated with the financial reward system is that it may lead to physical and moral burnout where the employees may work extra hours to earn the money and may eventually be frustrated by the monotony of the work situation.

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