Contents
1.0 EXECUTIVE SUMMMARY 2
3.0APPROPRIATE OF RESPONSE TO THE BUSINESS CONTEXCT( Internal and external) 4
3.1 INTERNAL FACTORS 4
3.2 EXTERNAL FACTORS 4
4.0 PROS and CONS OF PERFORMANCE RELATED PAY 6 6
4.1 Pros of Performance related pay 6
4.2 Cons of Performance related pay 6
5.0 EXTENT TO WHICH PERFORMANCE RELATED PAY CAN IMPROVE ORGANIZATIONAL PERFORMANCE 8
6. O ALTERNATIVE REWARD APPROCHES 10
7. O STUMBLING BLOCKS FRONT LINE MANAGERS EXPERIENCE IMPLEMENTING REWARD STRATEGIES AND HOW THEY MAY OVERCOME THESE 11
8.0 RECOMMENDATIONS 13
9.0 CONCLUSION 14
10.0 REFERENCES 15
People Management and Performance 15
The 7 Biggest Challenges of a Manager 15
1.0 EXECUTIVE SUMMMARY
Strategic approach to reward management recognises that
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A good performance related pay system stated by Whitley(2002) also retains existing employees subject to the fact that properly rewarded employees are likely to be loyal to an organization. It is worth noting that, if an appropriate performance related pay system is selected, staff productivity can be significantly increased. Performance related pay also facilitates implementing the general strategy in the company because of its clear and understandable structure of goals and appreciated behaviour occurring in the workplace as explained by Whitley (2002).
Secondly Lawson, (2000) outlines that performance related pay may attract well skilled employees who expect that their qualifications and results of performance will be rewarded. Armstrong, (1999) states that it helps in retaining highly specialised employees simultaneously reducing poor performers in the
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Companies also need to make sure that senior managers are very supportive during devolution of some human resource roles to line managers. Focusing on line managers’ lack of skills, the best solution will be providing training by human resource. Sisson and Storey, 2000 as cited in Whittaker and Marchington (2003, p.245 - 261). Companies should insure that line managers have required skills and knowledge; and they can manage and solve problems effectively. Communication among front line managers and human resource specialists is key. Companies should make sure there is regular communication between line managers and HR specialists. Hutchinson and Wood (1995) explains that relationship between line managers and human resource specialists should be partnership. Front line managers should be more accountable for employee relations and communications since they work hand in hand with
The company Steel Co, which has been established for around 30 years, has been in a steady decline during the current recession and although a Divisional Director has been employed by the owner the fortunes of the company have not improved. The staff is unhappy, unproductive and unimpressed by the Human Resource system that currently exists in the company. The pay structure that currently exists within the organisation has been much debated among employees who feel it is unsatisfactory. The Business Adviser will research Performance and Reward management tools in order to help the company develop a more suitable Performance and Reward system to use. A variety of sources will be used in order to evaluate the system and tools against other organisational frameworks. The pay structure within the company will also be looked at in order to identify any possible changes that could be made.
Performance-related pay Performance related pay is when a business increases the pay given to workers by the amount of effort put in, for example if an individual or a groupof orkers meet all their targets and improve the quality of
Performance related pay is a financial reward given to employees whose work is considered to have reached a required standard or is above average. “PRP criteria can relate to the individual employee, to work groups or to the organization as a whole” (Armstrong, 2002). It is fair to provide people with financial rewards as a means of paying them according to their contribution (Armstrong 1993:86). The primary purpose of performance related pay in any organization is to recruit, retain and motivate the workforce. It also helps in focusing employees’ minds on particular goals (Protsik, 1966); communicate to employees an organization’s core values, and change the culture of that organization (Kessler and Purcell, 1991).
The foundation for effective job performance and compensation system can be traced to effective job analysis process. Fundamentally, a job analysis should consist of a thorough examination of the job 's duties and knowledge, skills, abilities, and qualities that are required in order to be successful in a specific position, upon which appropriate rewards or compensation can be determined. For many perspectives, jobs are usually made up of requirements and rewards, where rewards may be regarded as a major recruitment strategy for motivating potential employees in order to influence them to stay the organization for a longer period as well as enhance their performance. The most common or basic form of rewards which attracts employees is extrinsic
Changing Roles. Traditionally, HR has been an administrative position-processing paperwork, benefits, hiring and firing, and compensation. However, recently HRM has moved from a traditional to a strategic role, the emphasis is on catering to the needs of consumers and workers. Before, HR was seen as the enemy and employees believed that HR’s main purpose was to protect management. Now, the position requires HRM to be more people oriented and protect their human capitol, the staff. In addition, human resource management has to be business savvy and think of themselves as strategic partners in the 21st century.
Corporations are looking for new ways to improve employee performance as well as remain competitive. Pay for performance is one method some businesses are utilizing to improve employee performance. Performance-based compensation exists when compensation is tied directly to that portion of an individual’s performance that can be effectively measured. There are a number of ways in which this may be accomplished and a number of examples as well how it is applied. One of the oldest examples is taken from the ancient Egyptians, where slaves working in the pyramids were given bread for superior performance. Payment of commission for sales production is one of the methods used today.
Reward Management (RM) has been defined as the distribution of monetary and non-monetary rewards to employees in an effort to align the interests of the employees, the organisation, and its shareholders (O’Neil, 1998). In addition O’Neil (1998) also suggests that a RM system can serve the purpose of attracting prospective job applicants, retaining valuable employees, motivating employees, ensuring legal requirements relating to direct and indirect rewards are not violated, assisting the company in achieving human resource and business objectives, and ultimately assisting the organisation in obtaining a competitive advantage.
According to this definition, we can see that human resource management should not merely handle recruitment, pay, and discharging, but also should maximize the use of an organization's human resources in a more strategic level. To describe what the HRM does in the organization, Ulrich, D. & Brocklebank, W. (2005) have outlined some of the HRM roles such as employee advocate, human capital developer, functional expert, strategic partner and HR leader etc.
There is no more critical role in our current society than that of a teacher’s. Teachers help shape the minds of the future. Tomorrow 's engineers, scientists, politicians, and educators are all greatly influenced by today 's Instructors. Without teachers society would not be anywhere near where it is now, and only a select few would have access to learning. Sadly however important teachers are in human civilization, they are still drastically understated, unrecognized and under paid. Although some people may argue that performance pay is good, performance/merit pay is bad because it will result in teachers doing much less personalizing of the curriculum, and spending that time doing only what things need to teach in order to keep their student’s
According to our textbook Human Resource Management (HRM) is the policies, practices, and systems that influence employees’ behavior, attitudes, and performance. “The human resources management process involves planning for, attracting, developing, and retaining employees as the HRM planning provides the rights kinds of people, in the right quantity, with the right skills, at the right time (Lussier, 2012, p. 240).” According to our textbook the typical responsibilities of the Human Resources department fall into three categories, and they are administrative services and transaction, which handle hiring employees. The second involves business partner services that focus on attracting, evolving, retaining employees by having a clear understanding
...n organisations of lack of job satisfaction and productivity amongst unmotivated employees, and related the problem to the risk of turnover. Conflict, absenteeism and stress were identified as major causes of loss of job satisfaction and productivity, potentially increasing the the loss of staff. The solution proposed was to implement additional training and performance pay. It was argued that training in the workplace improves an employee’s sense of worth and self-esteem, by increasing their skills and thus contribution to work efforts. This raises productivity, and in addition improves job satisfaction. Performance pay was advocated as a means of developing the organisation to support motivated and capable employees. Self-disciplined workers would receive recognition for output, improving job satisfaction; as well as financial incentive, keeping productivity high.
Employee compensation and reward systems have undergone a couple of paradigm shifts since inception. Reward systems were traditionally compensation based and focused on the individual or the position (Beam 1995). After a recession in the early 1980's, employers turned to performance based models in an attempt to save money while still rewarding top performers (Applebaum & Shapiro, 1992). Today, the most successful organizations are using a total reward model, a hybrid of the performance based model combined with strategic human resource management planning to create reward systems that both benefit the employee and help organizations realize their operational goals (Chen & Hsieh, 2006).
In large organisation, competition is not only in the market for goods and services but also for the quality of employees. As such, a large organization can only become attractive to the most skilled and high quality workers if it has an effective compensation and benefit plan. The key purpose of an effective compensation and benefit system is to provide employees with the right rewards for their work and right behavior in the workplace. Typically, organizational success is determined by the quality of employees an organization has. In turn, the organization can only attract such quality workers and maintain them through effective compensation and benefit
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.
Reward systems have been evolving and growing throughout the years, but there are many types that have always been there. Base pay is the most common, which is an employee’s base wages and salary that they are paid on hourly, weekly, monthly, or annually (Luthans, 2011, p.94). Merit based pay is another type of incentive, which rewards and motivates an individual to perform their jobs to the standards of their employers. According to the text Organizational Behaviors, by Fred Luthans, there are three other options for paying an employee for their performance: individual incentives pay plans, using of bonuses, and the use of stock options. Individual based pay plans are based on the employees output and/or quality. Some organizations use bonuses as incentives to their employees. These are offered sometimes as op...