Employee Rewards and Management - Essay Example

?Employee Rewards and Management Total Reward System Motivation comes from the enjoyment of work itself and from the desire to achieve goals set by the person (Dawson, 2009). Each individual has different goals. Some are financial, like working longer hours for extra income or exerting more effort just to push sales. Some set their sights on a promotion of rank believing that if they do well on their jobs and accept the challenge of more responsibilities that eventually, they level up to a position of more power and authority. Handy (1999) reports that the initial goals of motivation research was to encourage individuals to provide better service to their employers by exerting more effort and maximizing their talents at work. Having a well-motivated workforce may be equivalent to better work productivity and success in product salability in the market. Additional advantages are lower level of absenteeism and staff turnovers because the employees are satisfied with their work. This also means that training and recruitment costs are lowered because work positions are always reliably staffed (Dawson, 2009). In motivating and retaining good employees, it is important for management to establish a reward system to ensure that good performance is sustained. The Total Reward system is “the monetary and nonmonetary return provided to employees in exchange for their time, talents, efforts and results” (Christofferson and King, 2006). Total rewards involves the deliberate integration of key elements such as pay, benefits, learning and development and work environment (Brown, 2001) which all effectively attract, retain and motivate the talent required to achieve desired business results. In addition to these elements, Christofferson & King (2006) have added the elements of development and career opportunities which may be equivalent to Brown’s (2001) learning and development; performance and recognition and work-life balance which both belong under the work environment key of Brown’s (2001) framework. Figure 1. Christofferson & King’s Total Rewards Framework Key Elements: Pay The monetary component of the Total Rewards System which includes Base Pay, Annual Bonuses, Long term incentives, Shares and Profit sharing may serve as the most concrete reward an employee can hold, and is the most practical to use to meet his daily needs over time. Research has shown that pay satisfaction and the need for career growth are two of the most important predictors of job satisfaction (Gyanmudra and Vijaykumar, 2007). Individuals who are satisfied with the pay they get and the opportunities for professional advancement find that the costs of leaving their jobs would be greater so they develop positive attitudes towards their jobs and appreciate it for what it gives them. Benefits Receiving benefits such as pension, holidays, perks & flexibility of time may make an employee feel more accepted as part of the organization. Usually, it takes time before one can enjoy such benefits, and having proved oneself worth of such is adequately rewarded. Learning and Development Learning and development opportunities such as training, on the job learning, performance management, career development and succession planning may yield more long-term outcomes for both the employee and the organization. It increases the market value of the employee as he gets regularly updated about current trends in the business and be actively involved in contributing to its growth. Brown & Hunning (2010) claim if an employee adopts a learning goal orientation, he focuses on improving his abilities; a he is likely to have job satisfaction even if he is not intrinsically motivated. This is because of his intrinsic desire for the job due to the learning it brings him. Work Environment The work environment should also bring about rewards for the employee. This includes the organisation culture leadership, communications, involvement, worklife balance and non financial recognition. Maintaining positive work environments means having positive working relationships necessary to sustain a mutually beneficial relationship with the organization (Edwards, et al, 2008). It follows that when an employee perceives that he is being treated fairly by his supervisor and co-workers, he will reciprocate by helping others through their contextual performance. This also goes the same for the opposite. If an employee thinks that there is inequity in their relationships with supervisors and colleagues, then he may choose to withhold contextual performance behaviours. The Total Reward Model is an ideal model which companies should strive for. Some may not be able to provide for all the key elements included in the model, but customize it according to the needs and capabilities of the organization. In any case, Total Reward Model should translate to better productivity of workers, hence better performance of the organization. Learning from the Risk-Taking Bonus Culture that led to Financial Crisis The global financial crisis of 2008 questions governance experiences of organizational leaders, specifically those who led a culture of risk-taking and leniency in releasing bonuses to their executives. The anger and public fury about city bonuses specifically those of bankers’ bonuses bonuses (Aldrick, 2009; Griffiths, 2009; Quinn and Hall, 2009) fuelled scepticism of the banking industry’s capacity for change to more conscientious governance. World leaders criticized multi-million dollar bonuses of Wall Street bankers and traders at the expense of taxpayers (BBC News, 2009) which led to the collapse of the economy. The Anglo-American banking crisis has led to recession and government deficit, as it responds to the crisis by releasing public funds to re-establish the security of financial markets (Knyght et al., 2011). The International Monetary Fund (IMF) predicts that by 2014, the total public debt in advanced economies will grow to a high of 115% of their GDP, which is a significant increase from 75% in 2008 (IMF, 2009). This bit of information is quite alarming that both public and private corporations should be vigilant in effecting cost-saving measures in order to survive the worsening crisis. Reasons for the Financial Crisis: The following are possible explanations for the financial crisis as gathered from opinions of senior executives: chairman, chief executive officer (CEO) or managing director (MD) of various organizations (Knyght et al, 2011): 1. Cyclical Nature of Financial Markets: Even distribution and reduction of risk throughout the financial system is entailed in financial innovation. However, in the desire of all corporations for short-term returns through large sum borrowing amplifies risk for the entire financial system (Lim, 2008). 2. Social Structures: The majority of finances are held on to by the rich, moneyed individuals, and government funds are mostly in the vaults of countries but did not move due to lack of trust between market makers. (Wasserman, 2006). Financial problems are retained due to short term greed, lack of trust and a resistance to change the system. 3. Bonus Norms – Excessive executive remuneration not only reflects management greet but also a deeply flawed economic and social system (Knyght et al, 2011). Solutions to the Financial Crisis: 1. More control: tightening of all controls to keep costs down and to remain liquid. Risks should be kept to a minimum. This would entail closer and stricter monitoring of financial flow and careful rearrangement of priorities. 2. Fundamental Change: Complete paradigm shift towards more prudent practices would be the result of a sincere desire for reformation. A return to moral and conscientious governance is in order. Implications on future of reward strategy in organisations during the next five years Human Resource Management practices have evolved to recognize workers as worthy members of the organization. Not only are they instrumental in in the achievement of organizational goals but are actually the lifeblood of the organization. Hence, adoption of total rewards model is highly favoured. Knowledge of employee motivation and reward strategy is an advantage for employers. When this knowledge is applied, it becomes a win-win situation for both parties since the employees are motivated to pursue shared organizational goals while the employer encourages the productivity in his organization. However, the reality of financial constraints persists and until such time that the economy recovers, rewards may be limited to non-monetary rewards. Successful organizations know how to manage their human resources to still achieve competitive advantage. While tightening finances, companies have resorted to alternative employment strategies. In the current global shift towards E-commerce and internet, methods to work from thousands of miles away have been invented. Examples of these are: Hotdesking, Telecommuting, e-commuting Working from Home (WFH) is a new concept in the marketplace. Several companies are adopting it not only to save on finances but moreso to provide better working conditions for their employees. Organizations have reported up to 30% reduction in overhead expenses when they schedule their employees telecommuting days appropriately. They have consequently reduced their office space requirements and rents by requiring the telecommuting employees to share desks and other resources and facilities in the company offices (Boyd,1996). Telecommuting is more economical for employees who save a lot of money on transportation allowances, clothing and food spent on lunch or snacks outside the home. Companies not only save on rent, by getting smaller offices, but also on electric and water utilities, having less people reporting for work. More importantly, work-life balance is established as workers get to spend more time with their families, which in itself is a rewarding situation for most workers. At Renault, workers are offered to choose these alternatives with the condition of working from home two to four times a week and reporting to the office one day a week. Teleworkers and hotdeskers are entitled to the same company benefits as other employees such as: training and career development access to workplace representatives and elections cost of necessary equipment and its installation such as a laptop computer a high speed internet connection and an ergonomically designed chair which should only be used for work purposes (European Employment Review, 2007). Such conditions may be too attractive to turn down for most people, having control of their time and work environment and the opportunity to stay home while earning. It also saves them a lot of time and money on the daily commute to and from the office. 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