Rewards and Motivation
U.S. companies face greater pressures today than ever before to improve cost efficiency and in the same breathe taking their products to market faster, cheaper and with stronger innovation, regulatory compliance, responding to ever increasing regulations around the world that often conflict with each other. A company must also be nimble enough to change direction quickly and cost-effectively when market conditions shift. At the same time, they still must provide an environment in which people want to be employed and want to excel. This is where old models for rewards management fall flat and new rewards approaches must be implemented to make a more efficient and productive organization. (Chang) The company that will be referred to throughout this paper is the author’s current employer, Walgreens Corporation. In today's business environment, attracting, retaining and motivating the kind of people who can sustain a fast-growing organization requires most companies to think differently about how they pay their employees and this is true for Walgreens. The thought process to reflect this change is concerns the shift from compensation to rewards or the merger of both. When speaking to an HR representative within the department, it was made clear that the company objectives are results-focused and the weight of reward programs have increased to compensate.
Walgreens views base pay as the price pay for membership to the company. Base pay ensures the company that the employee will show up at work, that they may call employee’s night or weekends with business questions, that they can send them employees out of town and disrupt their personal life. But incentive pay or rewards is the price you pay to get employees focused on what is important to the company. For example, several years ago on the store operations level a flat rate was provided for the positions of Executive managers and storeowners across the board in the relation to annual bonuses allocated. For examples, two hundred dollars and seven hundred dollars respectively were issued on a monthly basis for these positions. However, rather than help productivity it had little effect and essentially did nothing to improve the bottom line for the corporation because managers felt that this allocated amount was just another structured payment (like base pay) and put the...
... middle of paper ...
...n the company across the board but especially in cities in which new districts are being built up, such as North Carolina, South California and Atlanta, Georgia. Human Resources created a rewards program to create the motivation to make the connection between the goal and the effort it takes to obtain that goal. For each referral that leads to a new hire an employee receives one thousand dollars and if they recruit for newly developed cities they obtain double points, which would double the payout (i.e. $1,000 to $2,000). This approach has helped alleviate the recruiting strain that was place on the company. The general process theory is consistent with the Walgreens Corporation that has esteemed itself at leading the curve in regards to innovation and human capital.
References
Meyer, John P., Becker, Thomas E., Vandenberghe, Christian. Employee Commitment and Motivation: A Conceptual Analysis and Integrative Model. Journal of Applied Psychology; Dec2004, Vol. 89 Issue 6, p991, 17p
Chang, Julia. Where Everyone's a Winner. Sales & Marketing Management; Jan2005, Vol. 157 Issue 1, p43, 4p, 8c
Milkovich-Newman. Compensation: Pay Model. McGraw-Hill. Boston, 2004.
Walgreens is a very well known name when it comes to drugstores. However, most people don’t know how big “big” is. In this case it is 7,015 stores nationwide. On average, each store has 30 employees on staff. This means that the company has 211,000 employees working for them. This type of responsibility calls for an HR department. In this company however it is done a little differently. When it comes to hiring staff for a store, it is solely up to the store manager. The HR department functions as a reference source for the store managers only (typically in cases of discipline). This is a great undertaking for a store manager when they are first promoted. As a store manager, you are faced with ever...
Compensation is made of a base salary (paid by the hour, work or the year; excluding overtime or bonuses), variable pay (bonuses, profit sharing/stock options which work hand and hand with the performance of the company), and benefits (to include health insurance/savings plans – 401(k), or tuition reimbursement). The traditional way of determining base pay for jobs was to compare jobs in the same industry. Now industry and market, no long work by themselves, the current thinking is more person-based that considers knowledge, skills, and competencies of the work. This, however, is best suited for high-performing environments that remain flexible in their deployment of human capital.
... Factors affecting employees’ organizational commitment–a study of banking staff in Ho Chi Minh city, Vietnam. Journal of Advanced Management Science 2(1), 7-11
... Vandenberghe, C. (2004). Employee commitment and motivation: A conceptual analysis and integrative model. Journal of Applied Psychology, 89(6), 991-1007. doi:10.1037/0021-9010.89.6.991
After reviewing Holland’s organizational strategy and exit interviews from the last seven years it is certain that through the new and effective compensation and benefits program created for Holland Enterprises, it will decrease the turnover rate, increase employee satisfaction and engagement and benefit the organization’s overall profits. Through careful consideration of pay structures, incentive awards, internal and external equities and the organizations benefits package Holland Enterprises new compensation benefits package will provide an effective and competitive compensation program. Henderson (2010) writes, “To survive and be successful in a global economy, an organization must be competitive. A major factor underlying organizational competitiveness is labor costs. Not only must an organization pay its workforce a competitive wage within its geographic region, but it also must vary the kinds and amounts of rewards offered, recognizing differences in individual contributions.” (p. 13)
Reward and recognition has to be promoted for small and large achievements. An effective reward’s program keeps employees engaged, dedicated, and committed to the organization.
This author can remember when his former company offered profit sharing for achieving production and it was motivation to do better job. Smart companies recognize that motivated employees are productive employees, which inspires them to create tactics to keep their workforces gratified and inspired. Therefore, it is wise to offer Incentive plans for performance. With that said there are several incentive plans that can be utilized by companies such as “team and group incentives”, “piecework plans”, “stock options”, “non-tangible and recognition based awards”, “employee stock ownership” ,“merit pay”, and “profit sharing plans” (Dessler, 2011).
A number of motivational theories explain how rewards affect the behavior of individuals and teams. Performance related pay can have a motivational effect. Employees are motivated to increase prod...
This has provided a competitive advantage for the companies. Companies of choice provide a comprehensive employee benefits package like Disney to attract and retain employees. A smart- compensation package that offers a fair market wage, benefits that include health, educational reimbursement, and flexible work schedule, paid time off, sick benefits can help attract the right employees. In today’s corporate world and competitive economy, it is a competition to recognize these gifted workers who can profit your business. A “strategic perspective focuses on those compensation choices that help the organization gain and sustain competitive advantage” (Milkovich,
Many of Harrah’s employees deemed the goals set by Winn’s current incentive program to be unrealistic; on the other hand, others felt a sense of entitlement for bonuses. Therefore, Winn’s job is to provide a recommendation to Gary Loveman, on how to motivate and get employees energized. In order to motivate the employees, Winn had implemented an incentive pay plan to rewards Harrah’s employees in all of its properties for improving customer service. The company’s purpose for incentive program was to implant a competitive mindset in its employees as well as to show the employees that they are core of the...
Omar, M. W., & Jusoff, K. &. (2010). Employee Motivation and Its Impact on Employee Loyalty. World Applied Sciences Journal 8, 8(7), 871-873.
Robbins and Judge define motivation by means of three elements. The first element is defined as being the process that account for an individual’s intensity which is concerned with how hard a person tries. The second element is direction that benefits the organization and the third element is persistence which is a measure of how long a person can maintain effort. Motivation is also driven by certain situations that vary between individuals and within individuals, at different times. (Robbins & Judge, 2007, p.186) These elements should not only be expected from employees but from managers as well.
Meyer, J. P., & Allen, N. J. (1997). Commitment in the workplace: Theory, research, and application. Thousand Oaks, CA: Sage.
There is considerable debate over merit pay and the effect it has on employees within an organization. Psychologists believe merit pay is related to the incentive theory of psychology; people respond to rewards and with the proper motivation, it increases performance (Cherry). Employers consider merit pay an effective tool and a form of competition strategy for motivating employees to achieve positive performance outcomes. Many employers ignore the fact that incentive plans may motivate some individuals while others have high work ethics and do not need motivation. The intent of this paper is to discuss merit pay used by companies, the motivational factors on employees to reach high achievement, and the challenges that employees face due
Management spends a huge amount of time to design incentive systems and schemes to motivate their workers and to ensure they work in their best possible manner. Motivating workers by giving them decent pay helps in winning employees heart to make the work done efficiently, significantly and effectively. The most effective way to motivate people to work productively is through individual incentive compensation (Pfeffer, 1998). An attraction of getting more is a powerful incentive to people for high performance. While most people agree that money plays a major role in motivating people, in organizations there is a widespread belief that money may also have some undesirable effects on morale.