Can an Employer Dismiss an Employee Fairly - Dissertation Example

TASK Employee Relations & Reward INDU1050 Essay Can an employer dismiss an employee fairly; if so in what circumstances and how? Introduction The evolution of organizations experienced unprecedented growth which necessitated laws to be enacted. For the benefit of both employers and employees, labor laws were structurally designed to ensure fair and just treatment of both parties. The Employment Rights Act (ERA) 1966 covers British Employment Laws including terms and conditions which cover dismissal of employees. It is in this regard that this essay is written to determine if an employer can, in fact, dismiss an employee fairly. The circumstances governing this situation would be examined and evaluated accordingly. Definition of Terms Dismissal is defined simply in the Legal Dictionary (2009) as “a discharge of an individual or corporation from employment”. Despite its simple definition, the laws governing dismissal explicitly identified three situations for it to be considered as such, to wit: (1) termination of the employees contract by the employer, with or without notice; (2) expiry of a fixed term contract without renewal; and (3) constructive dismissal. Details of the definitions and interpretations of dismissal can be viewed at the British Employment Law website at . Constructive dismissal, in this case, is clearly explained by Duhaime as “under the employment law of some states, judges will consider a situation where there has been a fundamental violation of the rights of an employee, by the employer, so severe that the employee would have the right to consider himself as dismissed, even though, in fact, there has been no act of dismissal on the part of the employer. (Viewed at Legal Definition of Constructive Dismissal website at By the definitions, it is eminent that there are situations which stipulate that employers have fair grounds for employees to be dismissed. Therefore, to answer the first question: “can an employer dismiss an employee fairly?” The response is yes; under clearly stated circumstances as will be discussed below. Fair Grounds for Dismissal According to the BEL (2009), “in coming to its decision on fairness an employment tribunal is likely to pay particular regard to whether or not the employer had issued formal policies or rules, for example in a staff handbook or policy document, covering the particular situation (and whether the employee was or ought to have been aware of the relevant policy). It is for this reason that a prudent employer will ensure he has in place formal staff policies covering such day to day matters.” This important statement establishes the employers’ formal rules, regulations and policies governing duties and responsibilities expected from employees. For some organizations, they call this a code of discipline. This would enumerate all policies in the organization as well as sanctions to be imposed in cases of violations of such policies. The Citizens Information website (2009), have enumerated clear circumstances when employers can fairly dismiss employees. These are: (1) capability, (2) competence, (3) qualifications, (4) conduct, (5) redundancy, (6) contravening law; and (7) other substantial grounds. Capability Capability is defined in the Business Dictionary (2009) as the “measure of the ability of an entity (department, organization, person, system) to achieve its objectives, specially in relation to its overall mission”. In this case, capability means the gauging the ability of the employee to achieve organizational goals. According to Citizen’s Information (2009), this includes issues such as “lateness, absenteeism and persistent absence through illness or injury, either short-term or long-term”. These are all relevant and critical since they affect the achievement of the company’s objectives. If an employee is persistently late, the time allotted and required to complete the tasks assigned are frequently shorten. Therefore, if measured in terms of quantity produced, instead of being able to deliver, say 100 units of the product within one hour, the employee who was late for 15 minutes, could only deliver 75 units. If that employee is consistently late, or absent, for that matter, the output that is expected of him or her is not complied due to one’s lack of capability to do so. In this regard, the employer will have just grounds for fair dismissal. Absences or lateness are usually monitored and sanctions are imposed depending on the employer’s code of discipline. A copy of this code is usually given to the employee upon placement for the particular position. This would ensure that the employee understands company policies regarding absenteeism and lateness. Proper documentations are required for filing and when returning to work such as medical certificates, in case of sickness or emergency situations. As averred in the Citizen’s Information (2009), “in terms of medical evidence you may be required to attend your employers medical expert. If there is a conflict of medical evidence between you and your employer as to the possible return date, your employer will be expected to get a second opinion before taking the decision to dismiss you.” Competence The Business Dictionary (2009) defines competence as “sufficiency (state of being good enough) of knowledge and skills that enable one to act in a wide variety of situations. Because each level of responsibility has its own requirements, competence can occur in any period of a persons life or at any stage of his or her career.” The following circumstances are relevant in considering if employers are fair in dismissing utilizing incompetence as the rationale, to wit: “In the first place, you need to be made aware of the standards that are expected of you, and these must refer to the job you were hired to do. Secondly, if you fall short of the required standard, this must be clearly explained to you. This should be done through a formal set procedure. Your employer should also specify what improvements are necessary. These should be achievable and a reasonable timeframe must be allowed for the improvement. Ultimately, your employer should give you a final warning setting out the likelihood of dismissal.” (Citizen’s Information 2009) Qualifications Qualifications mean “any natural endowment, or any acquirement, which fits a person for a place, office, or employment, or which enables him to sustain any character with success; an enabling quality or circumstance; requisite capacity or possession.” (Accurate & Reliable Dictionary 2008) The employer can dismiss an employee on the grounds of qualifications in two scenarios. The first: “where you misled your employer about qualifications you had when applying for the job”; and second, “where your employer made continued employment conditional upon your obtaining further qualifications and you failed to achieve this, having been given a reasonable opportunity to do so”. (Citizen’s Information 2009) Conduct Conduct is the manner of acting, behaving or controlling oneself (Collins Essential English Dictionary 2006). Since this is a broad area of a person’s behavior, an employer needs to distinguish between gross misconduct and ordinary instances of misconduct, to wit: “Gross misconduct may give rise to instant (summary) dismissal without notice or pay in lieu of notice. Examples of gross misconduct include assault, drunkenness, stealing, bullying or serious breach of your employers policies and practices.  Your contract of employment may contain further information concerning gross misconduct. Ordinary instances of misconduct may be a series of minor incidents which, when taken together, are enough to warrant dismissal, although your employer is obliged to give you notice or pay in lieu of notice in this type of situation.” (Citizen’s Information 2009) For ordinary instances of misconduct, the employer is given the chance to investigate the instances to obtain accurate details as reported. For gross misconduct, these instances have been explicitly stated in the code of discipline and appropriate sanctions have been indicated including dismissal for these occurrence. Thereby, these cases justify an employer in dismissing the employee for behaving in manners contrary to policies and practices. Redundancy The Business Dictionary (2009) provides the following definitions of redundancy: “provision or existence of more than one means or resources to perform an activity or function; elimination of jobs or job categories caused by downsizing, rightsizing, or outsourcing”. The Citizen’s Information (2009) enumerated the following instances where redundancy can occur: “Your employer ceases to carry on business or ceases to carry on business in the place where you have been employed. (For example, if the firm moves location, this can be a substantial change in your working conditions and may therefore be a reason for redundancy. However if there is a change of ownership under the transfer of undertaking legislation where employees are re-employed with no change to their working conditions then it is not a redundancy situation.) Your employers requirements for employees in your category has ceased or diminished Your employer has decided to carry on the business with fewer or no staff. In deciding whether your employer is continuing the business with fewer or no staff, close members of your employers family are not taken into account Your employer has decided to let your work be done in a different manner in future and you are not sufficiently qualified or trained to do the work in the different way Your employer has decided that your work will in future be done by another person who can do other work as well and you are not sufficiently qualified or trained to do that other work.” In any of the abovementioned scenarios, the employer can justify that is it fair for the employee to be dismissed. Generally, redundancy occurs where one loses one’s job due to circumstances such as the closure of the business or a reduction in the number of staff. The reason could be the financial position of the firm, lack of work, reorganization within the firm or it may be closing down completely. Contravening the Law By this circumstance, it means that the employee is in a situation where his or her action, when the employment continues, would violate, nullify or be inconsistent with legal requirements. For example, “you need a current driving license to work, but you have lost your license on a drunk driving charge. You cannot continue to work without breaking the law and dismissal may be justified. However, your employer might be expected to look at alternatives depending on all the facts of the case.” (Citizen’s Information 2009) The employer is fair to dismiss the employee since continuing one’s employment would put the employer in a precarious situation. Other Substantial Grounds This clause is usually added in cases where the employer finds circumstances not indicated or classified above, but can be evaluated and assessed as fairly justifiable as a cause of dismissal. The basis for this would always come from violations of the organization’s policies as stipulated in the code of discipline. Fair Procedures Aside from the circumstances that justify the employer in dismissing employees, one must be aware that labor laws stipulate disciplinary procedures which should be strictly adhered to. These should be included in the code of discipline to indicate appropriate sanctions for violations such as warnings, reprimand, and suspension before dismissal. Employees must be given the opportunity to present their side and to be represented in cases of disciplinary action. Conclusion Human resources management encompasses functions ranging from recruitment, placement, maintenance, development and research. These functions have to be clearly understood by the employees in terms of organization objectives, bases, values, types of programs and projects, and their implementation. However, management functions should also incorporate knowledge of labor rules and regulations to supplement and complement each other. While the interests of management and labor may be different, their main goal of organizing and controlling behavior to accomplish specific aims is relatively the same. Both have to be aware and constantly reminded of the superordinate goal for which they exist in the organization. The function of labor laws is to set up minimal standards under which organizations operate for workers. In cases of dismissal, it has been established that there are grounds for employers to fairly dismiss employees. Under these circumstances, fair procedures are still to be abided. The law clearly stipulates terms and conditions which prove to be satisfactory for both employers and employees, thereby ensuring a safe and harmonious working relationship for all. Reference List Accurate & Reliable Dictionary 2008, Definition of Qualification, viewed 07 August, 2009, British Employment Law (BEL) 2009, EMPLOYMENT RIGHTS ACT 1996 ss.95 and 136: Basic Position, viewed 06 August, 2009, Business Dictionary 2009, Capability Definition, viewed 07 August, 2009, Business Dictionary 2009, Competence Definition, viewed 07 August, 2009, Business Dictionary 2009, Redundancy Definition, viewed 07 August, 2009, Citizen’s Information 2009, Fair Grounds for Dismissal, viewed 06 August, 2009, Collins Essential English Dictionary 2006, Definition of Conduct, Harper Collins Publishers 2004, 2006. Duhaime, L undated, Legal Definition of Constructive Dismissal, viewed 06 August, 2009, Legal Dictionary 2009, Definition of Dismissal, viewed 06 August, 2009, Office of Public Sector Information 1996, Employment Rights Act 1996, viewed 06 August, 2009, TASK 2 Employee Relations & Reward INDU1050 Essay 2: Explain job evaluation and the various types of schemes. What are the advantages and disadvantages for an organization in adopting a job evaluation scheme? Introduction After the formulation of the organization philosophy and before the recruitment of its staff and workers, the various jobs in the entire organization have to be organized, classified and defined. This function of job organization and information is an offshoot of the organization structure which clearly delineates the different departments, divisions, sections and units in light of its philosophy, resources and needs. It is the analysis and evaluation of each job that exists within the organization. The entire process of job organization and information involves three steps: job analysis, job design and job evaluation. (Martires 2004: 103) This essay is hereby written to explain job evaluation and the various types of evaluation schemes utilized by organizations. The respective advantages and disadvantages of adopting a specific job evaluation scheme by organizations would likewise be presented. Definition Job evaluation is the costing of each job attaching it to its proper money value. It is also called job rating or job valuation. (Martires 2004: 120). According to Business Dictionary (2009), job evaluation is the assessment of the relative worth of varied jobs on the basis of a consistent set of job and personal factors, such as qualifications and skills required. The objective is to determine which jobs should get more pay than others. The Society for Human Resources Management (SHRM) has defined job evaluation as “a formal process for determining the relative value of jobs based on job content, with emphasis on such factors as skill, effort, responsibility and working conditions. Job evaluation may contrast with or complement market pricing, which uses the labor market to set the worth of jobs”. Rationale for Job Evaluation Job evaluation serves as a tool for compensation system. The job rating plan provides information and clues that can be used as a framework for the entire organization’s compensation administration program which should be reviewed periodically. Fringe benefits and other schemes could be added if the basic worth of jobs may not constitute adequate motivation or incentive to employees. Job evaluation assists management in determining an equitable pay system. A rational wage and salary scale results if the systematic and organized study of the worth of each job to the organization is conducted. Objective costing of jobs provides both incentive and motivation to workers. The SHRM (2009) stipulated that “organizations use job evaluation to: (1) ensure compliance with legal requirements, including federal laws and regulations on equal pay and state/provincial or local ordinances on comparable worth; (2) establish a rational, consistent job structure based on value to the organization in terms of each jobs complexity, importance and/or other factors (with or without reference to market valuation); (3) help provide a basis for pay-for-performance and (4) assist in establishing pay rates and structures that are competitive.” Who Does Job Evaluation Being a specialized and sensitive process, job evaluation should be done by a professional expert or group either of the Human Resources Department or of an external organization that is commissioned by management. As averred by Martires (2004: 120), “like in the preparation of job descriptions and job specifications, representatives from each department and the union, if any, should be part of the group that is tasked to do job evaluation”. The former can offer information about each department or of the entire organization that outsiders may not be aware of but which is an important input. Furthermore, an output of a well represented group is less likely to be repudiated than one done by an exclusive expert group. Procedures Used Job evaluation makes use of the job information which has been gathered, classified, defined and described in each job description and job specification. Martires (2004: 120) emphasized that “the translation from raw data to money value is a very complex and intricate process which takes into consideration not only the values and resources of the organization concerned but also parameters outside it like supply and demand for labor, wage structure of organizations, the economic conditions in the country and external world and of the prevailing value system”. In this regard, there are various approaches of job evaluation which an organization may choose from in the light of its needs and resources. Robbins (1978: 52) has identified four standard approaches: (1) ranking method, (2) classification or grading method, (3) point method, and (4) factor comparison method. In addition to these, Effective Compensation Incorporated (2003) have noted (5) marketing pricing method and (6) career path combination as alternative job evaluation approaches. Ranking Method Under the ranking method, jobs are arranged in a simple rank order from highest to lowest. This is done by reviewing all job descriptions which are grouped into classes and putting each job into the ranking hierarchy. All jobs falling in a given class are then paid the monetary range set up for that class. The advantages of this approach are: it is simple and relatively inexpensive and easy to apply. However, this approach has the following disadvantages: the basis of comparing jobs is not qualified, the results are difficult to justify to the employees, and there is minimal monitoring provided to evaluators. Previous to the technological development accorded by software programs, this approach was applicable only in small organizations since it was difficult, or virtually impossible then, to rank hundreds or thousands of jobs in big organizations. However, with the aid of computer technology, ranking of voluminous data are now possible. Classification or Grading Method In this approach, key components or factors in each job as found in the job analysis are isolated. Jobs are placed into grades based on this job analysis information. Jobs put in the same grade are found to rate similarly on the key components. This is the atomistic approach which differs from the global approach used in the ranking method (Martires 2004: 121). This approach is also relatively simple and inexpensive; there is a provision for a predetermined scale of values and “measures of skill attainment can become easily identifiable criteria for determining job worth”. (ECI 2003) On the other hand, for this approach to work definitions of class and levels of positions should be structured and the factors assigned for grades might not be relevant to the true worth of compensation. Point Method The point method used in job evaluation focuses in the components in each job. The components could be responsibility, efforts and skills. Points are thereby allocated to each component. Appropriate weights are assigned to each factor depending on its importance to the job. Jobs that have similar job point totals are placed in similar pay grades. The advantages of this approach are that its structure provides consistency among evaluators and it is immediately determined with the worth of each job. In contrast, the disadvantages of this method are its complex framework discouraging managerial inputs, difficulty in maintenance, and details are difficult to explain. Factor Comparison The mechanics for a factor comparison approach works this way: key jobs are chosen as standards and as representative of duties and responsibilities from a cross section of jobs. Factors like mental, skill and physical requirements, responsibility and working conditions are utilized to rate various types of jobs like sales, production, managerial, and clerical. As explained by Carrell and Kuzmitz (1986: 67), “the chosen key factors are then ranked for each factor that is compensable and evaluated factor by factor”. Each factor is given a certain money value. Therefore, instead of a total point score, factor comparison results in money cost. The final total numerical rating becomes the hourly wage rate. To a great extent, this method is a combination of the ranking and point approaches. The advantages of this approach as depicted by ECI (2003) are as follows: “job-to-job comparison, limited number of factors, and avoids internal inconsistencies arising from different evaluators using different criteria”. On the other hand, its disadvantages are: very complex, time consuming and “halo effect may cause individual judgments on factors to parallel on overall ranking judgment” (ibid). Marketing Pricing Approach This approach is clearly explained by ECI (2003) as quoted: “when a significant amount of market information exists, it is possible to place jobs into grades based on the level of the competitive pay for the various jobs. Generally, a simple ranking process is used to “slot” the positions without market data into the structure— this works best when market data is available for at least a few jobs in the job family. When good market data exists, management can use the competitive pay information as a frame of reference in determining its grade structure, although we still encourage organizations to reconcile the external data with the way they view the internal value of the various jobs.” As identified, the advantages of this approach are: it is easy to understand, development and maintenance time is minimal, market data is more conclusive, and availability of survey data is accessible. The disadvantages, on the other hand, are: temporary market conditions will significantly affect the accuracy of the data and some of the data acquired from outside sources may not coincide with internal values. The SHRM (2009) emphasized that “a key benefit of market pricing is its emphasis on external competitiveness; however, a big drawback is insufficient and/or unreliable market data for all the jobs in the organization.” Career Path Combination This approach actually combines the advantages of market pricing and ranking with the concepts of job families and career paths. (ECI 2003). This is the easiest for the employees to understand and accept. However, it relies heavily of the judgment of management. Contemporary Practices In an article written by Bares (2009) entitled, “Are We Looking at a Job Revival in ’09?” she stipulated that “in many places, for many organizations, job evaluation - of the traditional factor-based type - has kept its place as a cornerstone of the base salary program.  In most organizations, however, the dominant method of valuing jobs has been a market-based approach.” Accordingly, she emphasized that job evaluation approaches that focused on internal job content were more popular during the times when “people stayed with the same employer for years, often their entire career.  Most hiring was done at the entry level, after which employees typically progressed through the internal hierarchy as talent and opportunity permitted.  Sourcing and recruiting talent from the outside, while certainly important, was not nearly as widespread or critical as it is for todays organization. For these reasons, the most important pay relationships were the ones between jobs inside the organization and there was little risk if the internal job hierarchy that developed was out of sync with the external labor market.” (ibid.) In another discourse, the Society for Human Resources Management (SHRM) identified other approaches such as the PAQ, the FES and the Hay system, which are all quantitative in nature (2009), to wit: “the PAQ is renowned in the field of industrial/organizational psychology for its technical excellence and usefulness in job evaluation, selection and related HR program areas. The FES, used by the Federal government to evaluate its white-collar jobs, extended early point-factor methodology and is widely copied, in technique or actual content, by many other systems used in the public and private sectors. The modern Hay system, properly called the Hay Guide Chart-Profile Method of Job Evaluation, is extensively used in the private sector to evaluate executive, managerial, supervisory, professional and/or nonexempt white- and blue-collar jobs”. Conclusion Job evaluation has been traditionally known as based on the data contained in the job description and job specification. According to Pritchard (2009), “contrary to popular belief, some job evaluation systems are intrinsically linked to or validated by the market”. It is therefore a very highly specialized, tedious and complicated process, the output of which assists each and every organization in devising an equitable pay system. Armstrong and Baron averred that job evaluation actually begins “by identifying how many and which jobs are to be evaluated. A decision also has to be made on whether there should be one scheme for all employees or whether there should be separate schemes for different levels or categories of people”. To be effective, job evaluation must be both reliable and valid. Organizations must ensure that the appropriate scheme is utilized depending on their resources and needs towards the accomplishment of goals. Reference List Armstrong, M. & Baron, A. 1995, The Job Evaluation Handbook, CIPD Publishing. Bares, A. 2009, “Are We Looking at a Job Revival in ’09?” Compensation Force, viewed 07 August, 2009 Business Dictionary 2009, Definition of Job Evaluation, viewed 07 August, 2009 Carrell, M.R. & Kuzmits, F. 1986, Personnel: Human Resource Management, Columbus: Merrill Publishing Company. Effective Compensation Incorporation (ECI) 2003, Alternative Job Evaluation Approaches, viewed 07 August, 2009, Martires, C.R. 2004, Human Resources Management: Principles and Practices, National Bookstore, Philippines. Pritchard, K.H. 2009, Introduction to Job Evaluation, HR Disciplines, Strategic Human Resources Management India, Pvt. Ltd. Robbins, S.P. 1978, Personnel: The Management of Human Resources, New Jersey: Prentice Hall, Inc. Society for Human Resources Management 2009, Introduction to Job Evaluation, viewed 07 August, 2009, Task 3 Employee Relations & Reward INDU1050 Incentive scheme at Gibb’s musical instruments Consider and come to conclusions on the following questions. 1. What do you think might be the likely effects, positive and negative, of introducing this system? The incentive scheme being proposed by Harry Gibb is actually considered a performance based scheme over an above the staff’s basic salary which plans to give commission or bonus depending on the level and amount of sales transaction completed. According to Business Link (2009), “incentives are rewards relating to certain goals. Perks are benefits on top of basic salary. Incentives and perks can be financial or non-financial.” In the case of Gibb’s musical shop, this incentive is financial in nature. As such it would have the following effects: Positive Effects This scheme would definitely encourage an increase in sales as specifically identified as the objective of giving incentives. It could promote competition, thereby enhancing marketing and promotional activities in the shop. It would uplift the atmosphere and working relations among employees. It could increase morale, loyalty and motivation. It would definitely boost productivity and focus employees on achieving targets. Negative Effects On the other hand, by implementing this scheme, there is a tendency that despite allocation of staff to particular areas (depending on their musical interest and expertise), staff would most likely favor selling high-priced products to receive higher bonuses. Further, instead of enhancing friendly competition, it could cause discord and a feeling of mixed emotions on the proposed scheme. In addition, it could demoralize instead of increasing morale if sales transactions are not completed and thereby, the bonus is not earned. 2. How might things have been done differently to avoid some of the negative effects that you have identified (and to bring about some more positive ones)? As identified in Business Link (2009), “pay and financial benefits are not the only things that may improve staff performance. Other key motivators include job security, job satisfaction, good working conditions and appropriate training”. Having identified that the objective of the incentive scheme is to boost sales, Harry Gibb can do the following to avoid some of the negative effects previously identified: (1) consult with the sales staff to find out what incentives your staff value most and what training they need to achieve the target; (2) arrive at a decision regarding staff allocation of responsibilities to avoid confusion and tense competition on high priced items; (3) evaluate and assess the percentage bonus to be received to be more equitable among the staff regardless of the amount or price of musical instruments; (4) run a test pilot scheme of the proposed incentive to determine if any adjustments need to be made; and (5) monitor the success of the proposed scheme and incorporate changes, if necessary. Aside from the above, Harry Gibb should also determine how his incentive scheme compares with those employed by his competitors. This is relevant in determining if, indeed, his proposed scheme would solicit his expected response of increasing sales and productivity in his musical instruments shop. 3. What theoretical perspectives help you interpret Harry’s approach? The underlying theoretical framework on motivation is the basic approach needed to interpret Harry Gibbs proposal. A very significant factor in the efficient performance and retention of workers is their motivation and its strength. Management should be aware of and recognize their motives in order to guide, lead and direct them properly. According to Martires (2000: 162), “the dynamics of behavior is indeed a very challenging area to unravel and, if properly handled, assists in morale building and development among the employees and which, in turn, results in job satisfaction and high productivity”. Motivation is the instrinsic inducement that propels an individual to think, feel, and perform in certain ways. It is internalized and the most yet elusive determinant of work behavior. In the case of Gibb’s musical instrument shop, his proposal to employ an incentive scheme is related to a behavior modification theory based on Skinner’s (1953) pioneering work on operant conditioning. It involves the systematic application of rewards to effect desired behaviors. Behavior modification through reinforcement gives a greater degree of control to the manager. The manager can administer favorable or unfavorable consequences on a selective basis upon each occurrence of desirable or undesirable behavior. He must make sure, however, that the employee is able to connect the consequences to the corresponding behavior so as to encourage or deter its repetition. Harry Gibb tried to employ positive reinforcement to solicit behavior modification towards him goal. Positive reinforcement provides a favorable consequence that encourages the recurrence of a specified behavior. The planned bonuses provide the staff with enough encouragement to increase their sales transactions. This reinforcement would be used to sustain progress toward the desired objective of improving the sales performance of Gibbs musical. Motivation underlies almost all human behavior. It is an urge that prompts action toward a certain direction. The motivated person displays the kind of dedication and commitment to performance that is the ultimate foundation of excellence. In eliciting superior performance, Harry Gibb doe not force employees to do so, instead, he motivates them to do so. The idea of needs satisfaction provides a natural starting point in understand human motivation. People have needs that cause tension and discomfort. They respond and act in order to satisfy those needs and thus relieve the tension. Several theories based on needs satisfaction describe in alternative ways the configuration of human needs. One theory is that of Maslow (1987) who identified five basic human needs and arranged them in ascending order. The value of Maslow’s theory lies in the insight that the concept of marginal utility applies also to human needs. Human needs are not absolute. The more one need is satisfied, the less its satisfaction matters. This implies that, at some point, the provision of additional rewards for the satisfaction of any one particular need, regardless of hierarchical configuration, may no longer bring about corresponding increases in productivity. Thus, for individuals who are already receiving substantial financial rewards, an increase in pay may no longer be motivating. What they may need is challenging work, growth, responsibility, or autonomy, among others. Applying these concepts to the case, Harry Gibb must be aware that he would have to determine first the needs and behavior of his 12 staff before imposing or implementing the proposed incentive scheme to determine if he is utilizing the appropriate motivational tool to attain his objective. Reference List Business Link 2009, Implement Staff Incentive Schemes, viewed 07 August, 2009, < http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1074424257> Martires, C.R. 2004, Human Resources Management: Principles and Practices, National Bookstore, Philippines. Maslow, A.H. 1987, Motivation and Personality, New York: Harper and Row Publishers, Inc. Skinner, B.F. 1953, Science and Human Behavior, N.Y.: Macmillan Company. Read More