Performance and Reward Strategy - Assignment Example

Performance and Reward Strategy Ans In the context of performance and reward strategy, it needs to be emphasized that an individual tends to compare his or her present position or status with that of others around. As the meta-process pyramid indicates, the gradual transformation in working conditions, attitudes, motivation levels depends upon the existing status of the individual. While focusing his/her eyes on the larger futuristic goal/s, the performance levels are very much affected by the job design and characteristics. The 'content' part indicates the present position of the individual and the prevailing circumstances. The 'process' part is meant to ponder over how the individual has reached to such a stage and which are the key factors affecting this journey. The influences could be positive or negative during this journey, but such influences also affect the future course as well and the spirit with which the team members are working decides the future course of the achievements as well. Ans-2: The contemporary job design theories outline a set of functions, components and tasks depending upon the organization settings, based upon the requirements of the organization and the capabilities of the individual. While the meta-process of finalizing minute details helps the organization in attaining the desired heights, it also helps in the individual by way of improving quality of work experience and greater freedom and flexibility (Dolan and Schuler, 1994). Therefore, positive motivations help in a better experience while negative motivations result in adversely impacting the work culture. Motivation in simplest terms can be defined as a means of providing motives. At times, the lack of any positive motivation by the managers often results in an automatic provisioning of negative motivation. How somebody makes use of his/ her efforts towards a goal is determined by the motivating/ de-motivating factors. It is through their behavior that employees give expression to their commitment to work, level of motivation and their attitudes. The performance appraisal and review process helps the management in motivating the performance levels of deserving candidates while providing an opportunity to the one's lagging behind. Organizational goals and objectives can also be achieved if the workforce is able to work with desired levels of motivation. Buyens and De Vos (2001) contend that, "strategic HRM is the linking of the HR function with strategic goals and objectives of the organization in order to improve business performance and develop organizational cultures that foster innovation and flexibility". It is worth mentioning here that the individual feel motivated when they find that their requisite needs are being fulfilled in the process. The Maslow's hierarchy of needs is an important tool to assess the needs of the people in general. Ans-3: Strategic HR management is supposed to align organizational targets with those of the individual and the teams. Mahy et al (2005) contend that a company designs its HR policies to maximize profits, for which the company makes use of job incentives. Such incentives play key role in influencing the attitude of the worker. Thus the incentives turn into profits for the company. If due attention is paid to the periodic feedbacks from the workers, it goes a long way in shaping the policies of the company and provides it an edge in taking on the competitors. For example, Coca Cola the leading icon in a range of beverage products clearly underlines the importance of synchronizing the career requirements of workers with the company's requirements. It states1, "Our Company, your career, together we grow." Considering its people as its greatest asset, the company comes out with a benefit statement which states2, "The Coca-Cola Company values the health and well-being of our employees and provides a variety of market-competitive benefits programs to address employees' benefits needs." It is indeed worth pointing out that company clearly finds a link between maximizing profits and the well-being of its employees, which certainly helps in motivating the workforce to perform better. While on the one hand the total benefits package of the company is designed to meet the changing needs of its employees, it keeps on changing with the changes in market dynamics as well. It proudly proclaims that the company is being built around two core assets namely, its brand and its people. Ans-4: Pay structure plays an important role in formulating the response of the worker towards the policies being adopted by the company. Adequate remuneration for the work is key to seek optimum output of the worker, because even if the company provides a decent working environment there are scores of other needs of the worker his/her family and friends which can only be taken care of if the worker gets adequate monetary compensation for the services being rendered to the company. Pay structure generally includes a basic pay with proportionate compensation for transport, housing, conveyance, inflation compensation etc. The basic pay varies amongst the employees on the basis of hierarchical structure within the company and the types of works being performed. While working for the company having a decent pay package with reasonable assurance of job security results in boosting the self confidence of the individual. This in turn reflects on the manner in which the individual tries to implement the strategies and jobs assigned to him. Pay systems in general can be broadly divided into the following two types; Job or Position Based Pay System: In such a system a General Manager is bound to get a higher pay as compared to the sales executive. Such a payment system is based on the hierarchy prevailing within the organization. In such a system employees are motivated to work hard towards achieving the higher slots in the hierarchy. This includes gaining experience, acquiring qualifications and earning excellent grades during performance appraisals. Skill Based Pay System: In such a system remunerations are paid to the workers depending upon the skills acquired by them. In today's context when outsourcing has gained momentum, such a system of payment is much more prevalent. Quite often an IT expert happens to get much more remuneration than the top level managers in the company. It needs to be emphasized that for such payments one needs to work really hard in some specialized field. That involves lot of hard-work and dedication. Ans-5: Abraham Maslow talked about five different levels of needs for an individual. the lowest level of need being the physiological needs like hunger, thirst, shelter moving upward in pyramid shape through other levels of needs like safety, social, esteem and self-actualization needs (Stephens, 2000). Rewarding the employees for good work, without any prejudice goes a long way in establishing healthy HR environment in the company. The reward can be in the form of monetary benefits, promotional avenues, obligation, certification or satisfaction for having done the duty. In fact, the nature of reward varies depending upon the needs of the individual. HR management is supposed to assess the needs of the people with the help of tools like Maslow's hierarchy of needs. A good manager could successfully motivate an individual by providing adequate opportunity for showcasing his/her abilities, so that the individual is able to contribute to the best of his/ her ability towards the completion of the task and growth of the company. Wal-Mart, for example, prefers to call its workers as 'associates' and states that3, "Wal-Mart's success is the direct result of the dedication of our associates, and we reward their hard work with benefits that work for them." Ans-6: Depending in part on previous features, the firm designs its HRM policies to maximize its profit. It has therefore to use the optimal job or bundle of job incentives to achieve the highest profit, and the workers attitude is the instrument by which incentives turn in profits, whatever the feedback effect of changing attitude on workers well-being. Incentives could vary in nature depending upon the worker's expectations and company's policies, but in general the 'recognition' and 'career development opportunities' are considered as the most valuable ones. For example, if the manager personality congratulates a worker for the good work, it also is considered as a goodwill incentive. If followed by monetary rewards or promotional opportunities, the incentive scheme becomes quite attractive for the workers. This helps in nurturing loyalty and sincerity towards the work and the company. Self respect is a key attribute which works up to the advantage of the worker. Nobody likes to work for the company if s/he is treated in a denigrating manner. For example Alcatel, a leading telecom company, takes pride in helping its employees finding their ideal balance between work and personal life4. Incentive can be provided to the workforce in different types. In today's market driven economy, companies also provide an opportunity to the employees to share from the profits and revenues or treating them as partners in the progress of the company. This can be done in the form of; Short-term incentives: Measures like profit sharing come into this category. Such measures include distributing proportionate annual bonuses to the employees or announcing periodic increments in salaries. Long Term Incentives: In such an incentive scheme, the employees are provided with attractive long-term schemes of cumulative benefits. This serves twin purposes. On the one hand the company is able to gain long term association with the employee, who feels the urge to work hard for better results. Options like Employees Stock Ownership plans (ESOP) are the tried and tested method of providing long-term incentives to the workers. Under ESOP, employees are allotted shares of the company at a discounted price, but with a lock-in period of 3-5 years. During this period the worker is not allowed to sell the shares. Thus, while the company gains the much wanted equity for operation, the worker works with dedication for fulfilling the targets of the company. Some of the companies offering ESOP are USG Insurance Company, AmWINS Group, Inc. Hull & Company, Inc. etc. Ans-7: The phenomenon called globalization has brought about different types of changes in the working environment around us. People from diverse cultural backgrounds, nationalities etc. can often be seen working towards a common goal of the organization. Dickens (1994) contends that the business case for managing diversity offers a way to operate equal opportunities as a strategic issue, a core value linked to organisational competitiveness. Irrespective of the nature and specialization of company, it can be said for sure that, 'people' form the core of its activities and therefore, the behavior and character of these very 'people' will affect the overall character of the organization. The performance level of this workforce depends upon the types of motivations provided by the organization. The prevailing work culture inside the organization, the manner in which diversity is respected and the natures of business prove to be key ingredients in shaping the overall work culture of the company. For example in case of an advertising business, the company would prefer to have creative minds, so that the company is never short of innovative ideas. Such an environment would mean better interaction amongst the workers, freer lifestyle, entertaining evenings etc. But on the other hand a disciplined organization like Army or FBI would accord higher priority to discipline. While on the one hand adequate remuneration would be a big motivation for an advertising company executive as well as a soldier, but in return both the organization would expect different types of work culture, loyalty etc. References: 1. Alcatel-Lucent (2009). Available online at http://www.alcatel-lucent.com/wps/portal (Nov 13, 2009) 2. Buyens, D. and De Vos, A. (2001), 'Perceptions of the value of the HR function', Human Resource Management Journal, Vol. 11 No. 3 3. Businessballs.com (2009). 'Maslow's Hierarchy of Needs'. Available online at http://www.businessballs.com/maslow.htm (Nov 13, 2009) 4. Coca-Cola (2009). 'Growth, Leadership, Sustainability'. Available online at http://www.thecoca-colacompany.com/ourcompany/index.html (Nov 13, 2009) 5. Dickens, L. (1994). 'The business case for women's equality: is the carrot better than the stick Employee Relations 16 (8). 6. Dolan, Shimon L. and Randall S. Schuler. (1994). Human Resource Management: the Canadian Dynamic. Nelson Canada. 7. Mahy, Benoit; Robert Plasman and Francois Rycx (2005). HRM and job performance incentives. International Journal of Manpower Vol. 26 No. 7/8, 2005. 8. Stephens, D.C. (Ed.) (2000). 'The Maslow Business Reader, Abraham H. Maslow'. John Wiley & Sons, New York, NY. 9. Wal-Mart (2009). Available online at http://walmartstores.com/Careers/7750.aspx (Nov 13, 2009) Read More