Management report about the organisation. Case of Pentangelli - Essay Example

?EXECUTIVE SUMMARY It is important and crucial for the organisations to manage the overall performance of the employees. For this purpose, organisations use different methods to manage the employees’ performance in effective and efficient manner. One of the main techniques used by the organisations, in this regard, is rewarding the employees in order to encourage and motive them to give high performance. In this report, an analyses of the case of Pentangelli, a restaurant, has been presented. The report presents and criticise the reward strategies followed by the management of restaurant to manage the overall performance of the employees. At the same time, the reports also presents different recommendations for formulating effective and efficient reward and development strategy, which can be used by the management of Pentangelli. In this last, the report presents different challenges which have to be faced by the management of Pentangelli while formulating new reward and development strategy. TABLE OF CONTENTS EXECUTIVE SUMMARY 1 TABLE OF CONTENTS 2 INTRODUCTION 3 PRACTICES OF REWARD AND DEVELOPMENT AND ITS IMPORTANCE 3 REWARD AND DEVELOPMENT PRTACTICES FOLLOWED BY PENTANGELLI 4 APPRECIATION AND RECOGNITION 4 REPUTATION MANAGEMENT 5 PROMOTIONS 5 CHALLENGING WORK 6 OPPORTUNITIES FOR GROWTH AND DEVELOPMENT 6 PRACTICES OF REWARDS AND DEVELOPMENT WHICH CAN BE ADOPTED BY PENTANGELLI 6 SHARING OF PROFIT 7 EMPOWERING THE EMPLOYEES AND DECENTRALIZED DECISION MAKING 7 PAID LEAVES 8 MEDICAL BENEFITS AND INCENTIVES 8 CHALLENGES FACED BY THE PENTANGELLI WHILE DEVISING A STRATEY FOR REWARD AND DEVELOPMENT 8 CHALLENGES IN PROFIT SHARING 9 CHALLENGES FACED IN PROVIDING PAID LEAVES 9 CHALLENGES RELATED TO CENTRALIZED DECISOIN MAKING 10 CHALLENGES RELATED TO MEDICAL AND OTHER BENEFITS 10 CONCLUSION 10 LIST OF REFERENCES 11 INTRODUCTION The reward system has got a great importance in improving the performance of employees in the organization and also retaining the employees for a long term with the organization. Several researches have been conducted so far to analyze the impact of reward system of the employee satisfaction and motivation. Employee motivation leads to the high level of satisfaction that has a very positive impact on the company’s productivity (Armstrong & Baron, 2005). This report aims to analyze the organizational structure of Pentangelli and the rewards system that can boost up the performance of its employees. Pentangelli is a chain of restaurants. The analysis of the structure will find out that how the organizational structure of this restaurant has impacted on the performance of its managers. The role of rewards and benefits is also analyzed to see their impact on the employees’ motivation and job satisfaction. The analysis of organizational structure will help to make appropriate changes in the structure to get the desirable outcomes. The reward system will be designed after analyzing that what benefits and compensations will attract the most to the employees of the restaurants. The rewards will be designed in such a way that will boost up the performance of employees in the organization. The impact of performance management techniques will also be analyzed for making the recommendations for proper performance management system in a complete chain. PRACTICES OF REWARD AND DEVELOPMENT AND ITS IMPORTANCE It has been identified in several researches that reward and compensation system has a highly considerable impact on the performance of employees (CIPD, n.d.). The rewarding system leads to the motivation of employees and employee motivation is the basic driver of job satisfaction (Hutchinson, July 2013). A good reward system is also used to improve the relationship of employer and employees in the organization. There are two types of reward system that are financial and non financial. It has been determined in several researches that Non financial rewards comparatively have two or three times greater impact on the employees’ motivation, Maritz (2007). REWARD AND DEVELOPMENT PRTACTICES FOLLOWED BY PENTANGELLI Some very attractive rewards have been used by the PENTANGELLI for rewarding its employees in the organization. The company provided the rewards with the purpose of encouraging the existing employees along with retaining them for a long term. The company has a focus more on the non financial rewards than financial rewards. The non financial rewards that are provided by the company are as follows: APPRECIATION AND RECOGNITION The company uses the reward of appreciation and recognition for encouraging and motivating the employee towards the workplace. The restaurant on the outskirts of York was very famous for its food and it was highly appreciated by its customers. The food was entitled by its customers as a delicious food and people covers a long distance for enjoying the delicious food of this restaurant. The feedback of encouragement form customers highly motivates the employees. It is the motivation and job satisfaction of employees that they are performing at such level where customer is getting highly satisfied with the food and services of the restaurant. Appreciation and recognition are non financial rewards that are used by the organization and the success of that restaurant chain is the justification of the good human resources management. The performance of employees and managers of the restaurant motivate the employer to invest in expanding the chain of restaurants. REPUTATION MANAGEMENT Reputation management is very important especially in the service industry. Reputation of the restaurant has a very high impact on the customer satisfaction because brand always matter for the customers. Frankie Pentangelli had become successful in building a reputable image in the mind of the customers. Pentangelli restaurant was highly famous for its innovative menus. This was the key factor that enhances the performance of the business. PROMOTIONS Promotion is another technique that was used by the Pentangelli to motivate its employees. Promotions of employees make them realize that they are moving towards the growth and development. Promotion has always been a highly motivating factor for the employees. In Pentangelli, Sean initially hired as a manager of a one restaurant and after evaluating his great performance and dedication towards the work the company promoted him as a manager of six restaurants. This is a highly motivating factor for any employee, but it was realized by the company after the promotion of Sean that he was not ready to take the position of manager for the six restaurants. He was not competently managing the chain because a great burden of work was on him and was not managing that work properly. Therefore, he became disturbed in maintaining a work-life balance. CHALLENGING WORK Challenging work is very positive reward for the passionate and dedicated employees. Big organizations create challenging environment for its employee for their growth and development in the company. The promotion of Sean was a challenge for him but it was not positively influence him and he lost the control because of the increased workload. The company needs to be evaluate properly that the employee who is has been promoting is ready or eligible for containing that responsibility or not. OPPORTUNITIES FOR GROWTH AND DEVELOPMENT Growth and development of employee is very much encouraging for the employees who want to build their career on the basis of learning and experience. Every productive employee has always been eager to get growth in his/her career and companies appreciate such behavior because it has a direct impact on the company’s growth. Companies have a great focus on this factor and create opportunities for the growth and development of its employees. The promotion of Sean was a great growth opportunity for him but that is the other thing that he wasn’t prove right person for that opportunity. Organizations have to realize that the promotion of one employee like from one manger of one restaurant to the manger of six restaurants can have a negative impact among the other mangers that have an equal position as the promoted manger had. PRACTICES OF REWARDS AND DEVELOPMENT WHICH CAN BE ADOPTED BY PENTANGELLI The rewards that can improve the performance of employees are as follows: SHARING OF PROFIT Profit sharing is one of the highly motivating factors that can highly improve the performance of employees in the organization. Profit sharing is used to increase the employee contribution in the organizational growth. The company who wants to increase its overall profits linked up the company’s managers and employees with the organization’s profits to enhance their performances (Broadbent and Laughlin, 2009). If the Pentangelli had provided the incentive of profit sharing to Sean then it might possible that Sean could have more focus on the company’s profit. Another strategy for improving the performance of the restaurants that could be formulized by the HR of Pentangelli was to rewarding the managers of all six restaurants with the incentive of profit sharing. The incentive of profits sharing for six managers could be able to improve the performance of all the restaurants. EMPOWERING THE EMPLOYEES AND DECENTRALIZED DECISION MAKING Decentralized structure of the organization it self a factor of encouragement and motivation for the employees. Decentralized structure refers to the delegation of authority among the employees of the organization. This structure improves the capability of decision making among the employees. It creates the though among the employees that their opinion is valuable for the organization and organization has got trust in their competency and capability (Ferreira and Otley, 2009). The elements of decentralized structure were missing in the organizational structure of Pentangelli. Some times it happens that the decisions by the managers or employees are not welcomed by the company’s management. PAID LEAVES A paid leaves is another factor that is very useful for motivating the employees. Paid leaves are very useful for the employees in case of any emergency with employee (Heinrich and Marschke, 2010). In case of Pentangelli, the paid leaves were not provided to Sean for its injury that’s why he worked remotely and deal with all the mangers of the restaurants. If the company provided paid leaves to Sean then after the leaves Sean join the company with fresh mind and worked harder to make a mark. The disadvantage of providing the paid leaves is that the company has to pay the salaries of employees without their returned performance. MEDICAL BENEFITS AND INCENTIVES Medical benefits and incentives is a very effective way to reward the position of employee in the company. Every employee has the right to get medical benefits in case of any injury and medical issue (Guest, 1990). Pentangelli was not provided the medical benefits to its employees. In case of Sean, Pentangelli had not given him medical benefits, so he had run the company’s operation remotely from his home. This was a very discouraging situation for Sean to work in a bed rest. Company avoid providing this benefit to the employees with the purpose of reducing the cost of production of the company. CHALLENGES FACED BY THE PENTANGELLI WHILE DEVISING A STRATEY FOR REWARD AND DEVELOPMENT The formulation of reward and development strategy is typical task for the human resource management of the company. Before designing the rewards and development packages the human resource management has to overlook all the dimension or pros and corns of the decision (Hackett, 2003). There are different challenges that were faced by the Pentangelli for designing the rewards and development system. The challenges are as follows: CHALLENGES IN PROFIT SHARING Several researches have been conducted so far to identify the impact of profit sharing on the performance of employees. It has been identified that it has a positive impact on the company’s performance. However, in implementing this reward system the company has to get through by several challenges. The initial challenge is that either the profits sharing benefit will only be shared with the top level management or all the employees in the company, because every employee in the company makes contribution in generating profits of the company (Huselid, 1995). Pentangelli was continuously expanding its operations therefore they need consistent investments. The strategy of profit sharing had a negative impact on the retained earnings of the company and the company couldn’t be able to expand its operation because of low retained earnings. CHALLENGES FACED IN PROVIDING PAID LEAVES The decision of providing the facility of paid leaves to the employees is a very difficult challenge for the management (Torraco and Swanson, 1995). Pentangelli had not assigned the paid leaves to Sean in his injury because the structure of the organization was centralized, all the authorities were in the hands of Sean therefore company did not allowed him to get a leave because the company had no one to work temporary on the position of Sean. Sean performance was highly associated with the company’s performance. Another perception of the company was that if the paid leaves being provided then the cost of the company will be increased. CHALLENGES RELATED TO CENTRALIZED DECISOIN MAKING The decentralized structure is another approach that could improve the performance of Pentangelli employees. The delegation of authority and decision making power when provided to the employees then it increases the level of responsibility among the employees. This is very encouraging for the employee to participate in the decision making process of the company or when the company asks the employees to give their opinion then employees feel respect for themselves (Haines and ST-Onge, 2012). Some times it also happens that employee decision is not acceptable for the management and management do not consider it therefore employee feel bad about the management response and he/she gets dissatisfied with the management perception. This can create a negative impact on the performance of the employees (Cox, Marchington, and Suter, 2009). CHALLENGES RELATED TO MEDICAL AND OTHER BENEFITS Medical, health and insurance benefits are also a motivating factor for the employees. It is like if the company remembers its employees in their bad time then employees will also remember the company in its bad time (Wilton, 2013). Many organizations use such benefits for satisfying the employee in the company. Pentangelli had not in a position to provide such kind of facilities, so to reduce the expenses and to retain the profits the company had not given this benefit to its employees. CONCLUSION Human resource management of the company has a significant role in the success of a company. It is the responsibility of the human resource management to design an attractive and acceptable rewarding system for the employees of the company. Reward and benefits are one of the most important factors that retain the productive employees in the company for a long term. The rewarding strategies of Pentangelli were not attractive enough for its employees therefore it became unsuccessful. If the company could apply the recommended strategies then it would have been able to achieve its goals comprehensively and competently. LIST OF REFERENCES Armstrong, M., & Baron, A. (2005). Managing performance: performance management in action. London: CIPD. Broadbent, J., and Laughlin, R. (2009). ‘Performance Management Systems: a conceptual model.’ Management Accounting Research, vol. 20, no. 4, pp. 283–295. CIPD. (n.d.). Employee Reward Standards. http://www.cipd.co.uk/NR/rdonlyres/DEA65372-D105-4A6B-A410-2C677F021155/0/employee_reward.pdf [Accessed 10 December, 2013]. Cox, A., Marchington, M. and Suter, J. (2009). ‘Employee Involvement and Participation: Developing the Concept of Institutional Embeddedness using WERS2004’. International Journal of Human Resource Management, October, vol. 20, no. 10, pp. 2150–2168. Ferreira, A. and Otley, D. (2009). ‘The design and use of performance management systems: an extended framework for analysis.’ Management Accounting Research, vol. 20, no. 4, pp. 263–282. Guest, D. (1990). ‘Human Resource Management and the American Dream’, Journal of Management Studies, vol. 27, no. 4, pp. 377–397. Hackett, P. (2003). Training Practice. London: CIPD Haines, V.Y. and ST-Onge, S. (2012). Performance management effectiveness: practices or context? International Journal of Human Resource Management, vol. 23, no. 6, pp. 1158-1175. Heinrich, C.J. and Marschke, G. (2010). ‘Incentives and their dynamics in public sector performance management systems.’ Journal of Policy Analysis and Management, vol. 29, no. 1, pp. 183–208. Huselid, M. (1995). ‘The impact of human resource management practices on turnover, productivity, and corporate financial performance’. Academy of Management Journal, vol. 38, pp. 635–672. Hutchinson, S. (July 2013). Performance Management: Theory and Practice. London: CIPD Maritz. (2007). Non-Cash Rewards Are Best for Performance Improvement. Available from http://www.rewardsdirect.com/direct/module/pdf/NonCashRewardsAreBestForPeformanceImprovement.pdf [Accessed 10 December, 2013] Torraco, R. and Swanson, R. (1995). ‘The Strategic roles of Human Resource Development’, Human Resource Planning, vol. 18, no. 4, pp. 10–21 Truelove, S. (2006). Training in practice. London: CIPD Wilton N, (2013). An Introduction to Human Resource Management 2nd Edition. London: Sage  Read More