Managing Workforce Engagement and Commitment - Assignment Example

Managing Workforce Engagement and Commitment Introduction Management of employees’ engagement and commitment is a critical aspect and a major consideration for an organisation’s success. Any successful organisation recognises that proper human resource management is directly related to an organisation’s performance. Most of these organisations are highly sensitive to their workers’ welfare and are totally dedicated to ensuring a highly committed and motivated workforce. This is achieved mostly by putting in place proper compensation and reward schemes that majorly encourage high performance by rewarding employees who achieve their set targets. This paper will evaluate and discuss employee reward activities and their impacts on employee engagement and commitment. Task 1: Discuss what an organization needs to do to achieve a reward management approach that ensures that reward activities are integrated and they make a positive contribution to attract, retain and drive high performance. Market position An organisation can attract and retain highly skilled and competent staff by placing itself in a market position above the rest in the industry. Behaviour and performance can as well be influenced by an organisation’s placing in the industry. A comparison between the reward scheme of an organisation and the rest gives employees an indication of how serious a company is with employee welfare. In order to boost an organisation’s performance, the human resources management has to ensure that the employee turnover rate is as low as possible. Companies with reward structures that are above the rest are viewed as elite and therefore employees will want to work for them for longer hence reducing the employee turnover rate. One aspect of market position is when such reward structures are based on the job levels such that job levels that require moderately and highly skilled personnel have rewards that are competitive and attractive. This ensures that such employees are highly motivated so as to give their best and they remain in the company. However it is important to note that such reward schemes might not work for job levels that require little or no skill at all as this would end up increasing the company’s wages and salaries budget without any significant economic benefit. This means that in developing a reward scheme aimed at boosting an organisation’s market position, the human resource must first identify the very important and specific skills required for certain jobs. The other aspect of such a scheme involves boosting the organisation’s market position which is done comparatively to other organisations. It is important to note that how an organisations position’s itself in terms of its employee reward structures significantly influences the organisation’s culture. Human resource personnel are very keen in ensuring that the organisations culture is one that is performance based and thus utilize this effect of reward schemes to achieve this goal. Pay mix A pay mix involves the reward elements included in an organisation’s reward structure. These may include cash, non-cash items, medical and other insurance covers and off-duty vacations. According to Nearly, the different kinds of rewards have different impacts on different kinds of employees. This means that some employees may value some non-cash reward items such as shopping vouchers than others who may prefer cash rewards (Nearly, 1963). The effect of this is that a given reward scheme attracts and motivates workers differently. It is inherent upon the human resources department to carry out thorough analysis and research so as to come up with a perfectly balanced rewards scheme that will contribute towards high performance and eventual achievement of organisational goals. In his research, Nearly realized that cash is commonly used as an incentive in reward schemes because it has value in the face of many employees. However, he further finds out that in most instances reward structures are highly determined the culture of an organisation as well as its structure. Alternatively, an organisation can decide to let its workers determine the kinds of rewards they want. This trend has become common because it is mostly pegged on employee performance in that an employee sets their targets that are approved by management and selects the kind of benefits they want upon achievement of the set targets. Another reason for its popularity is because it makes most employees feel that they are in control of their welfare. This boosts employee moral as well as maintaining a highly motivated workforce (Lawler and Ledford, 1992). Basis of job value reward focus There are some organisations that evaluate and determine the rewards for a specific job by evaluating the tasks and skills required for the job. This methods works where there are set guidelines on how to determine the value of a specific job. Once the evaluation is done and the job value is determined, then the next step is to equate the value of the job to the value of the individual employed to do it. It is in this way that the rewards for such an employee are determined. This method is mostly favoured by organisation for the one reason that job evaluations make comparisons possible. This means that this method is closely related to the market position concept. This method is also closely related to the reward scheme where an employee’s compensation is related to the skill that they possess for a given job. This essentially means that an employee is rewarded for their skills and level of competence to do a given job (Lawler and Jetkinns,1992). The advantage associated with this method is that it can be used to boost performance of a worker who would earn much less under a different reward structure. This method can be used strategically where the management of an organisation wants to have a highly knowledgeable and effective staff. It therefore creates a culture where employees always want to learn and acquire more skills so as to earn bigger rewards. Its main disadvantage is that it cannot be used on entry level staff as most of them do not have the required skill that is actually rewarded. Structure The structure of a reward scheme is determined by several factors. These factors range from organisational culture and structure, the organisation’s objectives and the job levels involved in the compensation scheme. However there are some key considerations for the structure. A proper reward structure should be squarely based on the organisation’s objectives. Its sole aim should be to improve workers’ commitment and engagement towards achieving the set goals. This is mostly done by motivating workers to give their best and sensitize them towards organisational goals. Administration Administration of reward schemes majorly involves communication of information concerning the reward structures and making decisions with regard to what works and what does not work for the organisation. As far as communication of rewards structures is concerned, there are two types of organisations. The first type includes organisations that share very little or no information at all concerning the payment structures for their employees. They regard issues of employee compensation as very a very private and confidential matter that should only be known by the individual employee themselves and the human resource personnel only. Information about how such organisations carry out employee performance evaluation and how they design their reward structures is highly secret. The other type of organisations includes those that share freely and openly information about their compensation structures. The open information structures are easier to manage as they require little administrative efforts unlike closed information reward systems that are open to manipulation due to their closed nature. The aforementioned types of reward systems subsequently form two types of decision making processes. The first type usually has a closed decision making process where all the authority rests on few individuals in the top management level. The second type has an open decision making process where all-inclusive decisions are made. This is possible because there free flow of information and administrative functions are open. The advantage of the pen system is that it makes workers feel appreciated by being involved in designing structures and systems for their welfare. Strategic approach to reward Employee rewards have a relationship to other functions of an organisation. In order to objectively evaluate their impact they should be viewed as part of a larger system. This larger system which is the organisation has its organisational goal. Thus the effectiveness of reward systems should be viewed in terms of their contribution towards achieving organisational goals. Reward systems should be strategically designed with the sole aim of achieving organisational goals. Reward schemes improve employee engagement and commitment so as to achieve higher performance levels. They can as well be used to change the behaviour of the employees so as to set in a manner that favours faster achievement of economic goals. There are instances where there exists more than one reward system and each reward system has a strategic objective. Once the desired organisational culture is identified, then an appropriate reward scheme is put in place so as to motivate employees to adopt that particular behaviour. Where multiple reward schemes exist, it is important that a balance is maintained so as to ensure each reward scheme achieves its targeted objective. Monitoring and evaluating a chosen strategy Monitoring and evaluating a reward strategy involves checking the reward scheme to determine whether it is actually giving the expected results. These results could include organisational behaviour or performance levels. When a reward strategy is laid down it is designed to achieve specific objectives. Monitoring a reward system involves putting the system to practice and observe its operation and the results it gives. Employee motivation, commitment and engagement are some of the major results that are monitored and used to give feedback. This feedback can then be used to make adjustments to the system. Evaluating a reward strategy involves determining its level of impact on the employees. This in effect will give the strategies effectiveness. Task 2: Contribution of reward practices towards motivation, commitment and engagement of employees Process of motivation and its support to reward practice An employee reward scheme is used strategically to achieve organisational objectives. Most of the impacts of reward schemes are performance based. An organisation can decide to develop a reward scheme in order to attract and retain employees. These schemes are carefully designed to attract a targeted group of people and subsequently keep them for as long as possible working for an organisation. It is these reward schemes that essentially determine who works for which organisation and who is wants to keep working for the same organisation. This effectively means that reward schemes determine an organisation’s employee turnover rate to large extent. Another impact of reward schemes is employee motivation. Reward schemes have the effect of encouraging people to work harder as they will expect better pay. This concept is borrowed from the expectancy theory (Lawler, 1973). This theory states that a normal human being always decides to behave in particular way because they motivated to act in that by the result they expect from their action. This theory is applied in workers performance in that they are motivated by the reward schemes as they expect better pay. This is a concept that is hard wired into the mind of every individual. In some instances the motivation to the workers could be out of the attractiveness of their performance. The third impact of reward systems is that it motivates employees to improve their skill and knowledge of their jobs. It is obvious that for a worker to be effective in their job and achieve commendable results, they need to comprehensively understand all the functions involving their jobs.This especially happens when rewarsd schemes target to reward specific skills. The four impact is on organisational culture. Reward systems have been used allover the world to change or influence organisational cultures in certain ways. This is effective especially when there is need to change the organisational behaviour and align it with the organisation’s objectives. Another impact of reward schemes is cost. Reward schemes constitute a significant part of an organisation’s costs of operation. This is in view of the fact that the wage bill forms a large part of an organisation’s budget. With this in mind, developers of reward systems should ensure that they are used for strategic purposes so that the benefits form their costs is spread over a long period of time. Performance related reward A performance based reward structure is one where the amount of reward to an employee is based on their results and merit. An example of a performance related reward scheme is a bonus plan. In most instances, this involves targets and performance levels. The main challenge in designing performance related schemes and managing them is determining the desired performance levels. Most organisations have succeeded in attracting and retaining employees who achieve high performance levels using performance related reward systems. They do this by identifying the overall company objectives and then they use this to determine individual objectives for the employees. When this is done performance of an employee towards these organisational goals can then be clearly related to the kind of rewards they get. When rewards are used to motivate employees towards better performance, it is upon the management to ensure proper handling of the system so as to avoid any backfires that might occur (Milkovich and Wigdor, 1991). Organisation or group based performance related pay A variant of the performance based reward system is the organisation or group based pay where the workers’ pay is related to the entire organisation’s success and not individual success. This system works perfectly where the management’s objective is to enhance team spirit and co-operation among the employees. Under this scheme, every employee shares in the success of an individual employee. Group based performance pay is based on the assumption that when employee share in the success of others they become encouraged and motivated to work harder and effectively too. However, it is common to find employees are under two or more reward schemes. For instance, workers may be included in individual performance based pay and group performance related pay. This motivates and improves commitment to their jobs more. Some of the demerits of performance related pay is that workers pay is determined by quantifiable and measurable success. This mostly has the effect of making workers focus more on the short term objectives that earn them their next expected pay and forget long term organisational objectives. Conclusion As learnt in this paper, employee reward schemes can be effectively used to achieve organisation’s goals as well as shape an organisations culture. Management of reward systems is the most part as it will determine the effectiveness of the reward systems. Proper and sound management will ensure that workers are highly committed and motivated to improve their performance and eventually ensure organisational success. References Lawler, E. (1973). 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