The Reward strategy - Essay Example

REWARD STRATEGY CASE STUDY and/or ID # Teacher In the case ic Travel we see a typical reward system based on simple merit scales and financial remuneration. Little emphasis is based on morale building or creative reward processing. Supervisory reviews are directly linked to any pay increases and from the staff’s point of view they have felt the supervisor did not know them well enough. The supervisor in this case probably has a paper relationship with the staff member based on client data and a financial baseline. The subsequent low morale of the team is a direct result of an accountant’s viewpoint of bonus and rewards systems rather than a Human Resource perspective with staff performance and increased retention rates as the goal. It is important to conceptualise any reward system with strategic gaols in mind. If Classic travel wants to position itself in the global marketplace as a competitive employer they will need to design a reward system specifically designed to foster the types of behaviours, attitudes and results from the staff they are looking for. This also must correlate with the vision of the organisation as a whole. While many studies have indicated that reward system can effectively influence staff behaviour (Lawler 1990) it is vital that these rewards are linked to boosting moral and teamwork, as well as salary. Salary progression payment systems have traditionally been a notable feature of white-collar employment, particularly for those in large public and private sector organisations. The nature of these systems has, however, been subject to change in the last twenty years. … Furthermore, faced with increasing global competition, private sector employers embarked on wide-scale organisational restructuring which had implications for the traditional systems of pay and reward. (Thompson 2000:126) As part of the reward strategy, supervisors at Classic Travel need to start providing recognition to the employees. It has been recognised that typically more than 90% of employees in any company want to have recognition from their seniors (Conlow 2001: 27). However, recognition is not just about giving perks, incentives, bonuses or awards for employees. In fact, it may have little to do with any kind of material offering. It is simply about words and it can be delivered easily by the supervisors without sacrificing anything. Employees want to be seen – sometimes literally. When anyone higher up the organisational ladder greets an employee by name in the hallway, typically that employee will view the greeting as a form of recognition. Why? Because there are the people who employees most want to be seen by because they have the most influence over their careers (Ventrice 2003:16). Recognition from the supervisor builds up the confidence level of the employees. Since they are their immediate superiors, any recognition from their side adds value to the work the employees have been doing. Besides confidence, it also enhances team spirit. Ask one hundred employees what their favourite form of recognition is, and you will get at least fifty different answers. Ask the same one hundred employees who they most want to receive recognition from, and the majority will say they want it from their manager or supervisor (Ventrice 2003: 49). Conlow lists out the principles of recognition for supervisors, which include simple gestures and words such as “Thank You,” “Good Job,” etc. delivered at no cost (2001: 27). These principles are: the supervisors while recognising the work of the employees should “be specific, be as immediate as possible, relate the recognition to the activity/result, relate the recognition to the person, be sincere and genuine, give weekly recognition and praise progress, not just accomplishment” (Conlow 2001: 27). Conlow also mentions about some no-cost and low-cost rewards that can be offered to employees as part of the company’s recognition and retention processes (2001: 28). These no-cost items could include saying thank you for the work done, praising an employee in front of others or giving recognition to the employee in the company’s newsletter. Perhaps even sending a letter of praise to the family of the employee, providing encouragement and even sending the letter of appreciation about the employee to the top management may be other no-cost options. Other low cost items could also be used to recognise the employee by buying him or her lunch, a donation to their favourite charity, or honouring with gifts or certificates. Motivations can be divided into two basic types. On the one hand, we can wish to do something for its own sake, for the joy and satisfaction that the activity itself affords. On the other hand, we can wish to do something as a means to an end, for its desirable consequences it promises. In the former case, we are said to be intrinsically motivated, in the latter, extrinsically motivated…Now, if you wished to encourage somebody to do something, you could focus on increasing either their intrinsic or extrinsic motivation. The question is: Which strategy would serve you best? (Abelson, Frey & Gregg, 2004, p. 91) The development of a talented pool of personnel and the retention of those personnel is now becoming one of the primary focuses of the HR department in any sound business. Classic Travel need to put systems into place that attract, retain, and develop talent. These systems also have the double-duty of keeping the job itself interesting and exciting for the staff. Programs such as those that rotate employees between different kinds of units within the organisation, that encourage directed learning as well as promoting interagency communication across the entire company are becoming an integral part to any business unit. Furthermore, the HR department must develop a system of recognition and reward for the staff in regards to their contributions to the agency (Mohrman, 2007: 34-35). Furthermore, on a practical level Classic Travel, nor any company, can give out reward without some return on that investment. They would need to examine the overall cost of the reward system as compared to the overall benefits not only to the employee but to the company as well. Being a travel agency which provides exclusive city breaks and short holidays to all major European countries. Classic Travel may be able to combine work and reward in one package. For instance a yearly training session could be held in Morocco, or some other vacation site where a three day training could also provide some much needed fun and even team building experiences. The company could pay travel training expenses and even base accommodations on a reward basis. Those staff with more customers or bigger increases in their overall business may get a private suite, and so on. Classic Travel would also be able to foot the bill at a discounted cost as well so their bottom line for this type of reward would be well expensed. Whichever reward system Classic Travel decides upon the feedback on the system should be constantly monitored by both the Human Resource and Finance departments. Several crucial questions need to be asked in order to fine-tune the reward and retention strategy for success as well as its overall connection with the ongoing business strategy of Classic Travel. This can start straight from hire by ascertaining whether new staff has come aboard based on the reward systems offered. Do these systems reflect the overall business ethic as well as the individual staff member’s personal values? There must be frequent evaluations of the satisfaction level of staff, not just at annual reviews where answers may not always be forthcoming or honest. As with any new system, it must also be flexible enough to chagne and adapt guided by the answers to the above questions. List of References Abelson, R. P., Frey, K. P., & Gregg, A. P. 2004. Experiments with People: Revelations from Social Psychology. Mahwah, NJ: Lawrence Erlbaum Associates. Conlow, Rick. 2001. Excellence in Supervision: Essential Skills for the New Supervisor. London: Cengage Learning 19-44. Lawler, E. 1990. Strategic Pay. San Francisco: Jossey-Bass Publishers. Mohrman, Susan Albers. 2007. ‘Designing Organizations for Growth: The Human Resource Contribution.’ Human Resource Planning 30.4: 34-47 Thompson, Marc. 2000. "6 Salary Progression Systems." pp. 126-151 in Reward Management: A Critical Text, edited by White, Geoff and Janet Druker. London: Routledge. Ventrice, Cindy. 2003. Make Their Day!: Employee Recognition That Works. San Francisco: Berrett-Koehler Publishers. Read More