New and Improved Rewards at Work - Literature review Example

Draft NEW AND IMPROVED REWARDS AT WORK For Dr. Larry Byrd HRM533 (Today’s New and Improved Rewards at Work Innovations of Employee Benefits Business leaders are always in involved in activities that can offer them a competitive advantage and an increased market in the present dynamic business environment. It is evident that businesses are always keen about what their competitors with an aim of doing better than them and remaining unpredictable. Every business wants to attract and retain key experts that are sometimes said to be the engines of successful and better performance. But how are they doing this? Business leaders are on a voyage, discovering subsequent needs to establish and implement those programs that will prompt competitiveness of their workers within their industries. The most important goal for an employment compensation strategy is to offer better rewards for right employee action for the success of the company. In order to make competitive compensation packages for their employees, companies need to consider what their rivals are offering so that they do not end up running into losses by offering more than the equilibrium point in the industry or offering less than the minimum, because this will make it impossible to recruit and retain staff. Best packages are sometimes those that are preferred by the workforce while at the same appear to be competitive in the particular industry. One advantage with compensation schemes is that they are able to underpin the organizational culture, something that is highly desired by companies. The government governs every aspect of employee compensation in the public sector, usually, in many instances; this leaves no room for innovative ideas towards formulation of important compensations schemes. Companies that are highly innovative in engaging their employees record high returns that are sometimes double those of rival companies which do not engage their employees adequately (Pollitt, 2081) The first way to creatively engage your skilful employees is by putting them in a position where they can have direct contact with consumers of their products. In many industries, employees design products and dispatch them for sale, yet they have no idea about the impact of the products to their end users (Grant, 2007, 2008). A good example is the automotive industry where automotive engineers design cars of all kinds worldwide but they never gets the chance to have direct feedback from drivers of the cars, authors as well compose many pieces of literature to millions of faceless readers but never meets them for feedback. Meeting end users as a product developer has been known to enhance prosocial motivation as well as perspective taking. According to a psychological research, when exposed to people in need, a product manufacturer is able to develop empathy and prosocial motivation which is important in making tailor-made products for users (Batson & Shaw, 1991). When employees in a company are exposed to their products end users, they are able to witness how their work is impacting on their lives thus creating a stronger anxiety for assisting them (prosocial motivation). Similarly, they are able to have a stronger comprehension of their tastes and perspectives (perspective-taking). In return, this strategy has the effect of making employees work extra harder and smart and become more effective. The second way of how innovations can enhance overall competitive compensation strategy of the organization is through establishment of health benefit designs where employees can enjoy from health insurance schemes. Organizations can commit to take care of employees health care needs, this way employees do not have to be worried about their health needs and those of their families. This gives them enough time to concentrate on their jobs and improve on their overall effectiveness and efficiency. Where employees happen to use their finances to take care of their health while on holidays and vacations, organizations need to introduce arrangements for health reimbursements. This strategy has the aim of regulating expenditure on health by the employees of an organization while increasing his efficiency at work place. Alternatively, there are other organizations that have devised aimed at projecting the work place as a place of recreation besides normal routine job responsibilities. In this case, they have introduced wellness programs. Workers get a chance to engage in fitness programs before beginning their work or at the nd of the work before they retreat home. In this light, organsation may employ fitness and wellness experts to offer advice to employees on how to take care of their overall fitness. Workers may feel motivated to work hard and remain in the organization rather than move to other organizations. Benefits and Specific Jobs As far as employee compensation is concerned, most managers struggle with deciding what to offer as the best package, perhaps an easier approach to this issue should be how good the compensation package should look like. It is now evident that compensation packages are directly linked to business structure, workers recruitment and retentions, motivation at work, better performance, effective feedback and job satisfaction. Potential employees give first priority to the kinds of employment packages offered by an organization before choosing to join it. This is because, compensation in organization does not represent the way payments are better but how you value workers as an employer. One of the ways to offer employee compensation is patting them on the back for every good job done. At Command Software, a company the specializes in making antivirus software, the company manager Dyan Dyer came up with an award for any random acts of benevolence shown by its employees. One of the employees who once won the award had accommodated a new German employee, assisting him to acclimatize with the American climate. In recognition, the employee had been given a certificate of recognition and a porcelain angel designated for her desk. In rerun such awards and other kinds of recognition have the effect of increasing employee loyalty to the organization and thus contributing to the overall success of the organization (Caggiano, 2014) Different industries have different employee compensation strategies, for instance, Fiamnini; a president of a public relations company in Seattle uses a different approach to his employees to make them effective on the job. At one point in time, the president winds up business to accompany his seven employees for a movie. He says that for at least four times in a year, his employee gets an opportunity to don their pagers, Fiamini admits that this strategy enables him to remain competitive since his workers end up committing their efforts in order to get more better rewards. In addition, the company provides weekly lunches that are catered from alongside daily supplies of candy, and other beverages like juice and soda. Fiamini and associates has managed to remain relevant and efficient in a market where other established rivals like Microsoft have effectively continued to stamp authority. For some companies, having flexible work schedules has proved to be a valuable and reliable employee compensation perk. For instance Kaufer Miller Communications is an agency that offers communication services to its clients in Seattle. It founder, Mr. Kaufer realized that there was an employee that was frequently being distracted by long distance commuting. To solved this issue and help the employee manage his work obligations, Kaufer engaged the employee in designing a work schedule that required the employee to work for only ten hours a week with an off-day on Fridays. In addition he also helped set up a home office for another employee so that he could be in a position to be moving to see her fiancée who was based in Washington, D.C. (Caggiano, 2014). In most sectors one of the easiest strategies for employment motivation is availing chances for promotion or advancement. In this case, organizations do not hire different employees to fill up top level management positions; instead they fill vacancies from within. This is usually the case with Half Price Books an organization that different kinds of books and journals. The owner of the company, Sharon Anderson takes this approach, in filling up management position, she promotes from within. She says that employees who stay in the company for a long period of time gets the chance to raise and take up leadership roles. This strategy she says offers new employees the motivation to stay and remain with the company for long. Fiamini also uses almost a similar strategy, in his company, workers that are able to bill 1200 hours in a single year coupled with establishing only two new business contacts gets their way smiling due to unimaginable salary increases. Equity-based Versus Innovative Rewards Programs Most companies in the United States use equity rewards in order to encourage their employees to perform better and stay longer in the companies. This is the case with many limited liability companies. Equity compensation takes many forms, there are companies that use them as employee motivation schemes while other use them just as benefits to their long serving employees. Equity rewards entails actual issuance of company stocks. The grant is designed to look like a sale and the securities are given with respect to the time that an employee stays with the organization. There are cases where the employee taking the reward only signs a promissory note to compensate for the securities; in return the note is redeemed through payments on bonuses as long as the note remains valid. In other stances, the note may be foregone for a period of time depending on the performance of the employee in the organization. In the event of a company sale or the case of an IPO, the sale of securities by the employee represents his capital gain. As a way of rewarding employees for their efforts in enabling the company arrive at an IPO or selling point, all the securities and stocks that are unvested at that time actually vest at the period of effecting the transaction. This gives a clear distinction between equity and innovative rewards. The first difference is that innovative reward programs have a way of encouraging competition among workers instead of collaboration. Innovative reward programs giving wards to best performing employee makes employees want to outdo each other. Companies using this program do not have teamwork. On the other hand, companies that use equity compensation encourage their workers to work in teams. Workers are motivated and inspired by fellow workers who are enjoying the workers after having stayed in the companies for a long period of time. When high performing workers are compensated it fuels feeling of jealous in the work force. This strategy does not consider the fact that people are endowed differently in terms of skills and talents. Workers who give crucial inputs and remains unnoticed at the end of the day for purposes of rewarding end up feeling unvalued and unappreciated. On the other, equity rewarding offers a team or group of employees rewards after their cumulative efforts and long service to the organization(Solomon, & podgursky, n.d). The second difference is that innovative rewards can sometimes be biased. Selecting people to receive holiday packages at the end of the year can be challenging for an organization. This is practical especially in a case where a single lucrative reward is available for one employee in the end year party. Sometimes other employees whose efforts were exemplary may end up being dejected because at the end of the day, the reward is meant for one person only. This leads to demotivation and lowering of employee morale and could cause employee turnover. Equity compensation on the other hand deals with many employees at the same time. Selecting employees for equity rewarding is simple, this is because, in the event stocks are to be availed to workers who have shown loyalty and long term service to the company it’s a only a matter of records to reveal employment dates to the latter. The process does not involve personal judgments and hence it is free and fair for all workers (Solomon, & podgursky, n.d). Equity based rewards on the other hand do not encourage innovation and creativity in the work place. Workers are subjected to old practices that have been used over time. The strategy seems to be less concerned with new ways of doing things as well as individual talents. Innovative rewards encourage workers to use all means in order to attain the needed value for the company provided that it is line with the company’s policies for good practice. Workers who are compensated based on their innovativeness have a wide option for approaching work obligations. Perhaps, this is the reason why innovative rewards are mostly associated with private companies and not the public sector. Government institutions are known for red tapes procedures making crucial decisions about company performance. This kind of work environment does not encourage creative and strategic thinking towards solving and implementing policies for rapid performance REFERENCES Batson, C. D., & Shaw, L. L. (1991). Evidence for altruism: Toward a plurality of prosocial motives. Psychological Inquiry, 2, 107-122. Caggiano, C. (2014). “Perks you can afford.” Retrieved from, < http://www.inc.com/magazine/19971101/1359.html> Grant, A. M. (2007). Relational job design and the motivation to make a prosocial difference. Academy of Management Review, 32, 393-417. Grant, A. M. (2008). The significance of task significance: Job performance effects, relational mechanisms, and boundary conditions. Journal of Applied Psychology, 93, 108-124 Pollitt, D. (2008). Employee engagement “does it” for B&Q. Human Resource Management International Digest, 16 (7) 12-15. Solomon, L, C & podgursky, M. (n.d). The Pros and Cons of Performance Based Compensation. Retrieved from, < http://web.missouri.edu/~podgurskym/articles/files/Pros_cons.pdf > Wojcik, J. (2013). Large companies’ innovative benefits programs help midsize firms expand offerings. Retrieved from, < https://www.businessinsurance.com/article/20131229/NEWS05/131229948 > Read More