Strategic Human Resource Management - Essay Example

Strategic Human Resource Management Introduction Innovation is the only way by which an organization or an individual might retain its image within the minds of the customers. This is because; by presenting inventive products, an organization or an individual might come up with the changing needs and preferences. As a result, the profit margin and total sale of the organization might get enhanced to a significant extent as compared to many rival players. However, in order to retain a praiseworthy image and reputation in the market, the organization need to recruit extremely talented and experienced staffs. Only then, the organization might present varied types of inventive products and services to the market so as to retain its portfolio and demand. Not only this, in order to retain these talented and experienced staffs for a longer period of time, the management of the organization need to implement varied types of performance related pay systems as well as fridge benefits. This is because; the performance related pay systems act as motivational tools that improve the dedication and inner morale of the employees towards their assigned tasks. Moreover, the level of performance and quality of work of the employees also get improved to a significant extent thereby reducing the rate of defaults. Due to which, maximum extent of the organizations desires to implement performance related pay systems in-spite of total quality management or six sigma, as it is more effective than others (Wood, 1996, pp. 912-923). This essay is divided into three parts mainly highlighting the importance of performance related pay system within an organization in this age. Along with this, it also describes the different types of performance related pay systems as well as its prime objectives. Other than this, this essay also depicts the inner strengths and weaknesses of performance related pay systems Discussion Is performance related pay system essential? For an organization to retain its competitiveness and sustainability, human resources are the most essential tool. However, in order to retain the most essential requisite of the organization, performance related pay system acts as the catalyst. This is because; performance related pay system enhances the inner motivation and dedication of the employees that amplifies their level of performance. As a result, the organization becomes successful in developing varied types of inventive products and services that may be preferred by the customers. By doing so, the total sale and total operating income of the organization might get increased resulting in amplification of its brand image and popularity to a significant extent. In addition to this, performance related pay system also helps to reduce the attrition rate of the employees that improves the portfolio and reputation of the organization in the market among others. Thus, it might be clearly stated that performance related pay system acts as a corner stone to improve the devotion of the employees and also the ranking of the organization in the market (Wood, 1996, pp. 675-687). Performance related pay systems is a motivational incentive Performance related pay system is considered as a motivational incentive. This is because; it helps to improve the inspiration and stimulus of the employees so as to present a high-level of performance. Moreover, these financial incentives help to enhance the productivity and efficiency of the organization thereby amplifying its brand value and reputation among others. Other than this, the financial incentives or performance related pay systems helps to attract the experienced employees within the organization thereby amplifying its effectiveness and popularity in the market among others. Due to these underlining reasons, the concept of performance related pay system is extremely essential and popular in this age of aggressiveness. Hence, it might be stated that performance related pay system not only enhances the motive but also the reliability and trust of the organization. Description of varied types of performance related pay systems Performance related pay system is offered in order to reduce defects or defaults of the employees. This means, by presenting these types of financial incentives, the employees become more concerned towards the rules and regulations of job. This is done only to reduce the defects and to improve the level of accuracy. By doing so, the efficiency of the employees improves resulting in amplification of the output and power of the organization. Furthermore, performance related pay system also helps in improvement in the level of performance that reduces the conflicts or clashes within the employees and the management. So, such types of financial rewards are highly preferred by both employees and management of the organizations. However, these rewards are of two types: monetary and non-monetary incentives. Monetary incentives comprises of varied types of bonuses, pension schemes, medical insurance or health insurance policies, pension schemes, salary supplements, gain-sharing, team-awards, group incentives and many others. The prime benefit behind presentation of such type of incentive schemes to the employees is to motivate the employees towards their assigned tasks. By doing so, their level of performances enhances that helps in development of varied types of inventive and creative products. Presentation of varied types of creative products in the market fascinates the customers towards the brand thereby amplifying its profitability and market share among others (Redman & Wilkinson, 2006, pp. 334-345) In addition to monetary incentives, non-monetary incentives are also extremely effective for the employees. Non-monetary incentive comprises of vouchers, appraisals, coupons etc so as to increase the self-esteem of the employees. Improvement of the self-esteem enhances the inner skills and talents of the employees to perform their assigned jobs and tasks in an effective way. As a result, the management of the organization becomes satisfied with the level of performance of the employees and enhances their scope of appraisals and promotions. Therefore promotions motivate the employees to retain in the organization for longer period of time thereby reducing the rate of attritions. Thus, it might be clearly depicted from the above mentioned facts and points that both monetary and non-monetary schemes help an organization to maintain its human resource and position in an effective way. Evaluate the objectives of the concept of performance related pay system Performance related pay system is the stimulus that helps to maintain the quality of the products in an effective way. So, performance related pay system is highly preferred and implemented by the organizations in this age. It comprises of varied types of objectives. These are: Improvement of self-esteem: the self esteem of the employees gets enhanced to a significant extent with the implementation of performance related pay systems. Performance related pay system are a sort of financial incentives offered to the employees for their good performance and high-quality of work. Moreover, performance related rewards are also offered in order to offer high-ended dedication towards the assigned tasks and jobs. Besides these, varied types of financial rewards are offered by the management to the leader or managers in order to tackle the team or group in an effective way and make praiseworthy performance among all. Therefore, by presenting these rewards the team-leader or the manager gets motivated towards his or her job roles thereby making them more and more perfect in all aspects. This is done, in order to retain his or her supremacy and dominance within the organization. Presentation of best–quality of work: performance related pay system also helps to improve the quality of work of the employees. Rather than total quality management, if the organization implements varied types of financial rewards or performance related pay systems for the employees, then the rate of defaults of the jobs might get reduced. Moreover, performance related pay system might also prove effective in reducing conflict and disagreements within the employees and management (Marsden & et.al, 2006, pp. 768-787). However, by doing so, the employees might participate or get involved in presenting varied types of suggestions or ideas at the time of decision-makings. This might prove effective for the organization in amplifying its productivity techniques, machineries, tools and HR management techniques as well. Hence, the organization as well as the employees might join hands with one-another so as to improve the quality of the products or services. Retention of the employees: retention of the employees is the most essential requirement of an organization in this age. This is because; human resources act as the tool so present varied types of inventive products and services to the customers. Moreover, it is the human resources that help an organization to retain its position and dominance in the market among many other rival players. Keeping these facts in mind, maximum extent of the organizations desire to offer varied types of performance related pay systems to its employees such as bonuses, provident fund, pension schemes, transport allowances, medical allowances, incentives etc. The prime motive behind presentation of such types of performance related pay systems is to retain or preserve the talented employees within the organization for its improvement in future era. Enhancement of productivity and brand value: human resources help an organization to improve its productivity and brand value in the market. This is possible, only by offering varied types of praise-worthy products and services to its interested customers. By doing so, the rate of consistency and dependency of the customers over the brand increases resulting in amplification of its profit margin and total revenues. Hence, it might be depicted that performance related pay systems helps to increase the competitiveness of the organization in the market to a considerable extent among many other rival players. Attracts talented employees: implementation or presentation of varied types of performance related pay systems also attracts a wide range of talents staffs. As a result, the organization attains the opportunity to improve its product lines and customer bases to a certain extent. Moreover, improvement of the product lines helps to enhance the reliability and trust of the customers that may amplify the reputation of the organization. Thus, performance related pay is described as a tool to enhance the inner expectation of the employees as stated by Vroom expectancy theory (Marsden & Richardson, 1994, pp. 243-261). The theory comprises of three elements, expectancy, instrumentality and valence. The expectation of the employees is to perform the task or job in the specified way in order to achieve the desired results. This means that the behaviour and attitude of the employees is also entirely related with the activities of the employees so that the performance of the employee might get enhanced to a significant extent as compared to other rival players. Moreover, instrumentality is also directly related to outcome. This means; in order to achieve the desired outcome, the employee gets motivated to present the required behaviour or performance (Kerr, 1985, pp. 267-277). Other than this, valence is the third element of Vroom expectancy theory. Valence means individual value. If the employees become aware about the value and effectiveness of the rewards, then he or she might act accordingly. However, presentation of desired outcome might help in attainment of the required rewards. Therefore, from these points, it might be clearly depicted that performance related pay system is directed related to the elements of Vroom expectancy theory. Evaluation of strengths and weaknesses of performance related pay systems Performance related pay systems is a technique that might be used to improve productivity of the employees of the organization. This is done, only by presenting varied types of financial rewards to the employees. By presenting these rewards, the inner skills and morale of the employees gets enhanced to a significant extent thereby amplifying their efficiency and performance (Harris, 2001, pp. 167-178). As a result of which, the profitability and total revenues of the organization also get increased that may increase its brand value and reputation. In addition, performance related pay system also helps to increase the retention of the employees within the organization. By doing so, the customers might become satisfy with the inventive product lines of the organizations thereby amplifying its profitability and operating income. In addition, performance related pay system also helps to reduce lockouts and strikes. As a result, the popularity and brand image of the organization enhances to a significant extent as compared to others (Ganster & et.al, 2011, pp. 221-235). Other than this, performance related pay system also comprises of varied types of weaknesses as well. Due to the presentation of varied types of performance related pay systems, the performance of the employees reduces. As a result, the dedication and devotion of the employees reduces significantly as compared to others. Moreover, due to the presentation of varied types of performance related pay systems, the level of expectation of the employee increases that hinders his rate of dedication. However, as a result of which, the level of performance and efficiency of the employees reduces that hampers the portfolio and prosperity of the organization. For example: the CEO of Tesco Plc, Mr. Philip Clarke implemented varied types of performance related pay systems for its employees. However, it is done in order to amplify the inner skills and morale of the employees thereby enhancing the performance (Chamberlain & et.al, 2002, pp. 31-49) Thus, it might be stated that performance related pay system proved effective for the organization of Tesco Plc thereby amplifying its popularity and brand value. Is Performance related pay system related to SHRM. How? Yes, performance related pay system is entirely related to strategic human resource management (SHRM). This is because; performance related pay system is also used to improve the motivation of the employees to enhance their performance. It is a type of strategy that might be used to manage and control the human resources of the organization in an effective way thereby amplifying its sustainability. Moreover, performance related pay systems also helps an organization to invent varied types of innovative products and services that may easily cope up with the changing taste and preferences of the customers. However, strategic human resource management (SHRM) is described as a technique to improve the business positions and image of the organization in the market among many other rival players. In addition, SHRM is the concept that helps to implement varied types of strategies for the achievement of the goals and objectives of the organization (Boxall & Purcell, 2011, pp. 123-134). Furthermore, SHRM is also a technique to improve the interpersonal relationship among the employees of the organization. This might be done, by presenting varied types of performance related pay systems such as bonuses, incentives etc. By improvement of the inter-personal relationships, the level of inner skills and talents of the employees also gets enhanced to a significant extent. This helps in improvement of the productivity and profitability of the organization (Brewster & et. al, 2001, pp. 223-232). Thus, performance related pay systems and SHRM is directly interlinked with one-another and it’s essential for the improvement of the organization. Conclusion Conclusively, it might be stated that performance related pay systems is extremely essential for an organization. This is because; its helps in improvement of the efficiency and revenues of the organization. Moreover, performance related pay systems, helps in improvement of the inner skills and talents of the employees thereby amplifying their performance and efficiencies. By doing so, the brand image and reputation of the organization enhances resulting in improvement of its supremacy and market share. In addition, performance related pay system also helps to resolve varied types of conflicts among the employees and the management. By doing so, the level of interpersonal relationship among the employees gets enhanced thereby amplifying their level of coordination and cooperation. This is extremely essential for retention of image and popularity of the organization in the market. Hence, due to these above mentioned facts, performance related pay system is depicted as a strategy of SHRM for organizational improvement in future run. Works Cited Boxall, Peter. & Purcell, James, “Strategy and Human Resource Management,Third edition, 2011”. Palgrave MacMillan: Basingstoke & New York. Print. Brewster, Chris. & et. al., “International Human Resource Management, (3rd Edition), 2001”. London: Chartered Institute of Personnel and Development. Print. 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