7RWM Reward Management Assignment Example
- December 8, 2020
- Posted by: Harry King
- Category: CIPD Level 7
Formative Assessment 1
Your line manager has asked for a written report on the future of reward management. He has indicated that he believes that the reward strategy of the business should meet the environment in which the business operates.
Please produce a written report citing any references which either backs up or denies this thought. Please use no more than 1500 wordsand use any real-life examples of business cases which support your answer.
All submissions should be in the region of 1,000 – 1,500 words and references should be added in the Harvard Referencing Format. There is a Harvard Referencing tutorial in the Resources Area which outlines the formatting required.
Reward management is among the most vital role of the human resource department in any business firm. The term reward management refers to a motivational practice through which a business recognizes and rewards its higher performing employees (Antoni et al., 2017). In order to come up with an effective reward management strategy, the business must come up with clear goals and set well defined rules in which the employees are entitled to follow so as to achieve the organizational goals in the most effective manner. This means that the set rules and regulations must be made clear to all employees and the reward that is to be achieved in case the employees succeeds. Based on this approach, the employees will work extra hard to enjoy the set rewards and in return the business on the other hand will achieve its short and long term goals easily.
It has been noted that reward management serves as the major way of motivating employees. To this effect, the motivational strategy should be able to meet the environment through which the business is operating in. This means that other than making the employees happy, the organization will make to have loyal employees and in the end make to retain its most talented employees. It is through maintaining the most experienced employees in a business that little resources are used on hiring, training and orienting newcomers (Noe et al., 2017). To this effect, the business is able to use its available resources on projects that can lead to its full success. Again, through proper reward management, the business is able to attract new talents which will add to the success of the business thus enjoy a continuous competitive advantage. Based on the above compliments with regards to the merits of an effective reward management, the need to consider the future of an effective rewarding system in a business is very essential.
Most companies employ either monetary or non-monetary method in rewarding their employees. To ensure effectiveness of these strategies, the need to employ both while acknowledging their hard working employees is very essential. To this effect, the concept of putting into consideration the environment that the business operates is the key to a successful future of this approach in any company. This means that the nature of work that the employees engage in and the nature of environment through which they operate at must be the governing factors in determining the level of reward the employees are entitled to. For instance a company operating in unsafe environment should not compensate its employees the same as a company whose operating environment is peaceful. On another consideration, a company whose operations expose the employees to health dangers should draft their rewarding systems in great consideration of the safety and health of its employees. The external environment which in most instances determines the level of pay in the labor market also calls for consideration in differentiating the level of rewarding values for each group of employees, (Elmadağ and Ellinger, 2018). To this effect, the nature of the reward management system must be able to meet the environment in which the business operates.
Google is a technological company which employs the commission based rewarding strategy to motivate its employees. Toyota on the other hand is an engineering company that also employs the commission based method of rewarding its employees. Based on the nature of operations that the two aforementioned companies engage in, it is quite clear that the rewarding system is vested on its philosophy of investing on human capital. To this effect the return on investment that an individual employee generates determine the rate of reward he/she is entitled to. Commission is a monetary method of rewarding the employee and has for decades served as a success for many companies in encouraging their employees to put more efforts so as to earn more. Research indicates that Google being a multinational company has managed to succeed in retaining its most talented employees, (Podrug, Filipović and Kovač, 2017). The concept behind this success is attributed to considerations made while rewarding its employees based on the environment that they are operating at. To be precise, the employees feel appreciated and willing to work more giving the company an opportunity to register growth day after the other.
Higher sales that Toyota enjoys are attributed to the hard work of its employees. It is quite clear that employees at Toyota enjoy high commission rates that are well established on this company’s rewarding management system (Duarte, Carvalho and Alves, 2016). The philosophy behind reward management on human capital investment is well portrayed where the return on investment differentiates the value of reward for each employee. Though commission based method is employed just like at Google, the value in both companies differs based on the consideration of each business environment. To this effect, it is quite clear that the rewarding system employed is only a hundred percent effective if factors that bring in differentiation are well put in place before coming up with the final value entitled to each employee as a token of appreciation.
While considering the environment in which the business operates, the need to change the common approach like the one used by the two aforementioned companies is very essential. It is quite clear that the commission based rewarding system is effective but the need to amend the normal routine is fundamental in ensuring a long lasting effective rewarding system. To this effect, the need to lower the commission and ensure a constant retaining reward for employees is essential. This is argued from the point that some businesses may be victims of harsh working environments that may limit workers to enjoy the commission. Based on this approach, employees will always feel the need to remain loyal to the company no matter the challenges they might be facing while undertaking their tasks. On another approach, the reward system must be able to satisfy all employees without any discrimination, (Wood, 2016). For instance, employees’ hard work should not be gauged on privacy. This means that the reward system must be governed by employee’s engagement and involvement. For instance, while rewarding the most talented employee, the other employees must be given an opportunity to participate in establishing the winner. To this effect, the others will feel the need to work harder to enjoy the privilege which in this case is governed by a lot of transparency. Rewarding system is primarily directed to ensuring achievement of maximized motivation o employees. Based on the above arguments, it is quite clear that the need to reconsider the current rewarding system is essential. This is attributed to the fact that the environment in which the business operates differs thus the need to consider it for the sake of the employees as well as the future of the business in general.
Antoni, C.H., Baeten, X., Perkins, S.J., Shaw, J.D., & Vartiainen, M. 2017, Reward management.
Duarte, M.I., Carvalho, R., & Alves, S.S. 2016, Leverage of a Management System by Kaizen-Lean Methodology.
Elmadağ, A.B., & Ellinger, A.E. 2018, Alleviating job stress to improve service employee work affect: the influence of rewarding. Service Business, 12(1), 121-141.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Podrug, N., Filipović, D., & Kovač, M. 2017, Knowledge sharing and firm innovation capability in Croatian ICT companies. International Journal of Manpower, 38(4), 632-644.
Wood, S. 2016, High-involvement management. In Encyclopedia of Human Resource Management. Edward Elgar Publishing Limited.
Formative Assessment 2
With the rise of ‘Gen C’ (Booz and Co) upon us, comment on how the changing dyanimics of the demographics will impact on reward policies and practices. Comment on how these might be slightly different from more traditional practices and any internal constraints which might be apparent – discuss how you would overcome these.
All submissions should be in the region of 1,000 – 1,500 words and references should be added in the Harvard Referencing Format. There is a Harvard Referencing tutorial in the Resources Area which outlines the formatting required.
Reward Policies and Practices
Impact of Gen C demographics on reward policies and practices
The emergence of each new generation comes along with changes that are hard to ignore. Generation C is among the most powerful anticipated generation in relation to significant changes in the current market. The anticipated transformations are attributed to the massive changes on the new generations’ lifestyle and more so the technological changes in relation to their communication habits. To this effect, the workforce demands will automatically be impacted and business firms are expected to keep up with the changes. Reward management is among the many functions of human resource that must be impacted. This simply means that the traditional rewarding strategies and policies must be adjusted to cater for the incoming generations demand. Based on research, it is quite clear that retaining such a demanding workforce may cost a business firm more as compared to earlier routine (Shields et al., 2015). On the same, their contribution towards success of business firms is highly anticipated based on their higher levels of innovations and ideas thus the need to invest on this human capital for positive rewards in the future markets.
Generation C is a demographic group which comes along with new connections, communications and changes. Being materialistic is among the major characteristic of this new generation. This is clear indication that their anticipated lifestyle is quite high and demanding as compared to the current generation. Based on this generation’s technological innovations and productivity in the new markets, the social changes in all organizations will automatically be accelerated (Bussin, 2018). To this effect, this generation will automatically demand more money from their employees in terms of salaries, wages or any other term of rewarding method that the employers will be offering to their employees. This calls for organizations to adapt to the new paradigms of this digital generation which must start with adjusting the current rewarding terms so as to capture the attention of the new generation and win their loyalty in businesses. This in return may affect the financial positions of many businesses if not well thought of. Argued from this point of view, the Human resource management must focus more on staff retention a strategy that will be made practical through consideration of changes in motivating the incoming workforce. Based on the materialistic characteristic, the rewarding policies must be adjusted and be made slightly higher to ensure that the demands of generation c in terms of high lifestyle are well put into consideration.
Connectivity which comes along with the advancement in technology is another factor that is posing challenge to the current rewarding policies that are adopted in many companies. It is quite evident that generation C comes along with quite high levels of technological knowhow which may cost companies a lot to capture and maintain. Research indicates that having a generation that is highly connected not only impacts the employees’ demands but also the demands of the consumer, (Wiedmer, 2015). This is a clear indication of open opportunities in terms of market that the companies are expected to enjoy. To this effect, the companies will enjoy high returns with regard to the new demands in the market. It is through these new demands that the people facilitating to the increased returns for these businesses who in these case are the employees must also be rewarded accordingly to ensure their continued contribution to these companies. Based on this argument, the current rewarding values must be increased so as to satisfy the demanding generation and retain them in the business firms.
Generation C comes along with clear rules and regulations to their employers. This is attributed to the fact that this generation understands their worth and the skills they brings in to the company. From this point of view, it is quite clear that this group of workforce will work hard to deliver to the demands of their task and expect high returns in terms of rewards from their employees. This means that if the rewarding policies are not adjusted to meet to this generations wish, retaining them in the company will be impossible. As noted, this generation has high abilities of negotiating and aren’t afraid of expressing their needs and desires to their employers thus organizations must change to fit Gen C, (DelCampo, Haggerty and Knippel, 2017). Based on the above discussed changes with regard to the incoming generation C workforce, the need to consider some below factors is the key to overcoming the aforementioned constrains.
Ways of Overcoming Constraints
Annual appraisal which is a traditional way of rewarding employees must be changed for generation c workforce and replace it with more flexible appraisal terms, (Schultz, 2015). This is attributed to the fact that this generation demands for instant feedback thus cannot wait for quite a long time before their efforts are acknowledged. This calls for the human resource department to prepare in advance and start adjusting their traditional annual appraisals for a shorter period which in real sense may not cost the company so much. By doing this the companies will not only be prepared for this generation of employees but will also be ready to enjoy the benefits that comes along with this group of talents.
Pay frameworks and flexible working is another key area that will automatically brings in relief for many companies if well worked upon in preparation of generation C workforce. Job flexibility in this case may come along with increased period of leaves especially the maternal leave for both genders. Based on previous research, it has been noted that such leaves has become attracted a wider employee base thus ensuring such changes in the rewarding policies will automatically capture the attention of this new generation, (Noe et al., 2017). Scrutinized pay framework will on the other hand accelerate employee motivation thus also serve as the base of winning the attention of the demanding generation.
Finally, personal development opportunities and sabbaticals must be put into consideration so as to avoid any inconveniences that may arise with the emergence of the new generation of workforce. The human resource departments must take note of the current way of rewarding their employees in terms of sabbaticals and personal development opportunities, (Pregnolato, Bussin and Schlechter, 2017). Gen C comes with new need to adventure and learn more. To this effect, the employers must be ready to offer this generation this chance. The rewarding policies must not limit employees with regard to studying subjects of their choice. This means that the new generation will be able to learn more in areas of their interest. By doing so the companies will automatically be able to enjoy the employee’s contribution as well as retain them as the employees also enjoy the benefits that the employers are offering in return. Basically, though the demands of the new generations may seem quite higher as compared to the previous generations, their productivity levels are also higher as well. This is a clear indication that the organizations must prepare very well in advance to ensure that they enjoy the incoming talent so as to succeed in the demanding world markets.
Bussin, M. 2018, Reward solutions to retention questions. In Psychology of Retention (pp. 395-413). Springer, Cham.
DelCampo, R.G., Haggerty, L.A., & Knippel, L.A. 2017, Managing the multi-generational workforce: From the GI generation to the millennials. Routledge.
Noe, R.A., Hollenbeck, J.R., Gerhart,B., & Wright, P.M. 2017, Human resource management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Pregnolato, M., Bussin, M. H., & Schlechter, A. F. 2017, Total rewards that retain: A study of demographic preferences. SA Journal of Human Resource Management, 15(1), 1-10.
Schultz, J.R. 2015, To improve performance, replace annual assessment with ongoing feedback. Global Business and Organizational Excellence, 34(5), 13-20.
Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P., … & Plimmer, G. 2015, Managing employee performance & reward: Concepts, practices, strategies. Cambridge University Press.
Wiedmer, T. 2015, Generations do differ: Best practices in leading traditionalists, boomers, and generations X, Y, and Z. Delta Kappa Gamma Bulletin, 82(1), 51.
Formative Assessment 3
Critically evaluate the issue of executive pay and reward. Select a business with which you are familiar, and based upon this business, discuss this very issue and how the topic is handled. Comment on how the business deals with the issue and any good practices that you have seen in practice.
All submissions should be in the region of 1,000 – 1,500 words and references should be added in the Harvard Referencing Format. There is a Harvard Referencing tutorial in the Resources Area which outlines the formatting required.
Executive pay and reward
Executive pay is the salary given to executive employees such as the Chief Executive Officer, Chief Financial Officers, and other senior managers within an organization. The executives are also given rewards for the work they do, and this is done with the intention of motivating them. The compensation committee or team is involved in the decision making process on the amount of money to be given to the executives as their compensation. This assessment will seek to provide a critical review of the financial compensation of the executives in forms of rewards, and the non-financial compensation that is in terms of rewards given to them. Rewards may be in form of bonuses, other benefits, incentives, and other kinds of privileges. Broughton (2017) states that in addition to pay, the executives should be rewarded on short term basis, as this goes in line with the interests of the managers and the company shareholders. Nevertheless, there is need to consider all kinds of rewards that enhance proper form of executive compensation.
The executive employees seek to identify the companies that provide competitive packages in terms of salary and benefits or rewards. This is an aspect that has contributed greatly to the rise of competitive pay for these kinds of employees. However, organizations also consider the nature of the executive performances in making decisions on whether to increase their pay or rewards. The compensation committee expects the executives to increase the value of the firm, and in order for them to achieve this, they motivate them by giving them the best pay and rewards. Lazear (2018) argues that with good pay and incentives, the effort that the executive put to the organization is highly influenced, and this in turn results to the development of an organization towards ensuring that the goals are met.
The issue of executive compensation requires an evaluation of the executive’s role within an organization. For example, there are organizations where the executives are involved in risky decisions, and some of the actions taken by these people towards ensuring that such organizations operate effectively are very risky to the executive team and the organization as a whole. In addition, there are instances when some of the issues within an organization are considered to be unethical, and in some instances, the executives find themselves being involved in unlawful decisions. Therefore, the duties of these kinds of personnel are important aspects to consider when determining the compensation and rewards to be given to the executives.
Rewarding executive employees is therefore dependent on the executive’s ability to deliver according to the company’s expectations. Taking the example of Tim Cook, the CEO of Apple Inc., it is clear that he has outperformed other technology companies CEOs. Tim Cook’s base salary is $15 million, and he stared receiving this amount in 2018. Before that, Tim was receiving a salary of $12 million, meaning that the company topped his salary by 3 million. He is among the top ten highly paid CEOs in the world. Due to his improved performance, he has received stock bonuses worth $126 million in 2018. In the same year, Tim Cook received a cash bonus of $12 million, and this was the highest amount he has ever received since he joined Apple. Tim has also been given non-equity incentive awards of $682,000.
The management and board of the Apple Company believe that the pay and rewards given to the Tim Cook and other executives in the company is a reflection of the performances that they contribute to the organization. Apart from pay and the bonuses, Tim Cook enjoys different kinds of privileges as the CEO of Apple. For example, he enjoys private flights and personal security, and this is provided to him on both business and personal ravels. The purpose of doing this according to Apple is to ensure that the CEO receives security all the time because he has the biggest role in the company’s operations.
As a globally recognized individual, Tim Cook is not only recognized for his support and management of the Apple Inc. He is also recognized as an individual who supports other people and institutions. Tim Cook is known for his support to charity organizations. For example, he has been giving millions of his money to support charity programs, and in 2018, he gave $5 million to support the initiative. The world has recognized Tim Cook as one of the successful leaders who have led to the growth of the Apple Company. His influence has enhanced the nature of the company’s success with increased profit and improved performance and large customer base. With such benefits, the company finds it important to recognize the person who supports the achievement of these company benefits. Together with other executives at Apple, Tim enjoys working for the company because of the satisfactory pay and the various kinds of rewards that they receive.
Executive remuneration reflects the pay given to the other employees working in an organization. According to Magnan and Martin (2018), there is need to ensure that organizations get to use the right guiding principles to determine the pay to be given to the executives and the pay given to the other employees. Some of the benefits that employees receive at Apple include discounts on products, paid leave for mothers before and after birth, regular events and bashes, and paid time off for new employees. Even with the benefits given to Cook, he makes sure that his employees get their share of rewards. The same way the executive employees are given pay and rewards to motivate them, the same way they should consider giving the same to the other employees to facilitate improvement in the business operations and performance.
In conclusion, the talented executives are the gateway to company successes, and this therefore means that they are the gateway to enhancing business success. They should therefore be compensated satisfactorily, and also ensure that they are well rewarded to make them feel motivated to work in the organization. Shin (2016) states that the pay should however be justifiable and fair so that no excessive money and rewards is given to the executives at the expense of the company. Tim cook has done a great job at Apple making it one of the most successful Tech companies in the world. More products are being developed and increased profit is being realized at the company. This means that his effort to support the company operations have led to him enjoying the different kinds of rewards awarded to him in support of the company.
Broughton, P. D. 2017. A better way to reward CEOs. Wall Street Journal. Retrieved from https://www.wsj.com/articles/a-better-way-to-reward-ceos-1501542185
Lazear, E.P., 2018. Compensation and Incentives in the Workplace. Journal of Economic Perspectives, 32(3), pp.195-214.
Magnan, M. and Martin, D., 2018. Executive Compensation and Employee Remuneration: The Flexible Principles of Justice in Pay. Journal of Business Ethics, pp.1-17.
Shin, T., 2016. Fair pay or power play? Pay equity, managerial power, and compensation adjustments for CEOs. Journal of Management, 42(2), pp.419-448.
Formative Assessment 4
What modern techniques might a business use to inform them of the level of reward which should be associated to certain tasks and roles. Discuss what new forms of technology exist that can help a business achieve this more successfully.
Modern techniques in rewarding employees
The world is experiencing different kinds of technology changes that have influenced the manner in which things are done, as well as the nature of decisions made by the management in an organization. Employers have been experiencing different kinds of challenges in relation to making certain kinds of decisions that relate with rewarding employees. Technology can be used to solve the issues by making use of real time data. With the availability of the information on the different technology platforms, managers can make decisions on the amount of pay they should pay to their employees. Technology has led to development of modern techniques that allow managers within an organization relate with different forms of rewards that enhance the degree to which different kinds of tasks are effectively completed in an organization.
Technology enhances the development and use of pay data that is made available on the internet on a platform such as Glassdoor. Here, information on employee pricing is made available for other employees to see and for the managers to see them as well. The employers can access the data and develop competitive pay and reward structures for their employees. This also creates an environment where the managers can understand the needs and interests of certain kinds of employees working in their organizations, and hence make it possible for them to decide on what they can offer to their employees (Miller, 2018).
There are different kinds of assumptions that employers can make from using the online data made available in the internet. For instance when determining the issue of employee turnover, the managers may seek to identify the reasons why most of their female employees seek for job opportunities elsewhere. By analyzing data in the human resource information systems, the management may realize that the employees fail to come to work because they are not given enough time off after giving birth. With this in mind, the management may make changes to accommodate the needs of such employees and ensure that they feel comfortable working for the organization. For instance, Google used the engagement surveys to collect data on this issue, and when this happened, the company realized the need to expand the maternity leave of the female employees from 12 weeks to 18 weeks. This was a decision made by the influence of the modern forms of reward management that showed that women with extended maternity leave feel more satisfied than those who have fewer days of maternity leave (Miller, 2018).
Different job platforms are made available for employees to air their opinions on what makes them comfortable. Such platforms are technologies that help people explain what makes them satisfied. As a result, the employers may find ways that they can use to secure a different form of technique that they can use to make the employees feel appreciated and motivated for being part of the organization. According to Chen and Hsieh (2006), the modern rewarding techniques improve the nature of the organizations in attracting and retaining employees.
Software has also been developed where employees’ information is collected and analyzed depending on what they are expected to do. This software will help analyze the abilities of the employees, and those abilities are matched with the kinds of rewards that should be delivered to them by the management. A good example is the AI software, which is identified to be transformative in determining the nature of rewards to be given to the employees. This is primarily analyzed depending on the tasks that the employees engage in while in the organization.
The management for instance can use the software to help match the reward opportunities available in the organization, with the employee characteristics and factors that influence their performance and involvement in the organization. For example, the employee stage of career, age, and family status can help the management make decisions on the appropriate kinds of rewards to be given to the employees. With the available technology platforms, the employees become transparent on the factors that they consider important.
Web based applications such as Oracle, SAP and Workday are also considered to be forms of technologies that enhance integration of human functions and services. These create an environment of efficiency, and also result to the development of channels that enhance proposition of employee value within an organization. With these applications, the management can make different forms of procedures that can be maintained towards making sure that they reward employees in the best possible ways.
The use social media is another technological technique that has made rewarding to be easy and well understood task by the management. Most of the employees have accounts on different social media sites. The management may analyze the role of the employees in the organization, and come up with the right system to use in rewarding them especially when posting the information on social media. Apart from the management getting to reward an employee and keep silent about it, it can work by sharing the reward information on social media sites making it possible for other people and organizations realize the effort made by particular person and how that person has been recognized.
Despite the fact that technology has made it available for information to be obtained by the management, there are challenges related to the fact that some of the data may be outdated and may not be effective to be used as references to making decisions (Miller, 2018). In order to avoid using outdated information, the human resource managers in any organization should consider finding information that is well updated and that can currently be used to help in the final decision making. With this kind of challenge, the management may come up with ideas on the how to engage their current employees towards devising the best rewarding techniques for the employees.
In conclusion, it is clear that technology has enhanced development of unique design elements that help in the improvement of the rewarding processes. Different employees carry out different tasks and roles in an organization, and thus the people may have different needs and interest. As a result, they may be rewarded differently depending on what they deem important and of significant to them. Technology has been identified as the source of change to which levels of rewarding employees tend to change. With technology, the management gets to understand employee needs, get to evaluate the reasons why employees get involved in different kinds of problems such as turnover and lack of engagement. When these factors are analyzed, the management may be able to make decisions on how to reward employees and make them satisfied, motivated, and committed to the organization goals. Some of the main technologies used include software, web based applications, and the social media.
Chen, H.M. and Hsieh, Y.H., 2006. Key trends of the total reward system in the 21st century. Compensation & Benefits Review, 38(6), pp.64-70.
Chiang, F.F. and Birtch, T.A., 2011. Reward climate and its impact on service quality orientation and employee attitudes. International journal of hospitality management, 30(1), pp.3-9.
Miller, S. 2018. Get ready for the digital future of total rewards. Retrieved from https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/get-ready-for-the-digital-future-of-total-rewards.aspx
Summative Assessment (40572/35) 7RWM
- Analyse the relationship between the environment, strategy and systems of reward management
- Critically discuss traditional, contingent and knowledge bases for transactional and relational rewards.
- Design internally consistent reward structures that recognise labour marker and equity constraints
Rewarding specific to contract of employment
This report will analyze a situation within an organization where two different employees are compensated differently for the same work. Ben and Ann both work as personal assistants to the senior executives within the organization that I had previously worked for. Both of them had the same job description, and they are given the title of personal assistants in the advertisement company. However, the salaries are different because Ben earns $42,000 and Ann earns $38,000. Both employees are expected to carry out similar roles in the organization, and they in some instances work together towards ensuring that they deliver the best they can to the reporting personnel and the organization as well. It is clear that the rewards given to these employees are different.
Justifying the area of employment in relation to organizational strategy
The organizational strategy in advertising companies is related with the main role of the organization in maintaining client relationships. There are different teams working towards ensuring that the organizational goals are met, and this therefore means that different team members have to be involved in meeting the defined organizational goals. These members can only make the organization successful in the events when they are well motivated. Greene (2018) argues that employees have to be rewarded effectively as the organization assets, and they should therefore not be treated as second class citizens. With this in mind, organization management has to ensure that all kinds of opportunities to motivate the employees are considered and taken advantage of to ensure that the employees effectively engage with the clients.
Gallus and Frey (2016) go ahead to explain the effect of using rewards towards ensuring that the employees feel motivated. This aspect greatly contributes to the nature of employee performance, and thus the issue of rewarding employees should not be taken for granted. The management should not neglect the fact that organization value is attained with the help of the employees who work towards securing the best form of company production.
These are tangible rewards that an employer gives to an employee in order to ensure that they deliver the best form of compensation. Tangible rewards are always in form of monetary or financial rewards, and this is associated with the amount of money that an employee receives after offering different kinds of services to an organization. Basing on the example needed to evaluate the case analysis, it is clear that Ann received salary or financial rewards that slightly lower than that of Ben. The $4,000 difference in salary clearly shows that the compensation is different. According to Gallus and Frey (2016), rewards differ in monetary incentives, but this should not be the case especially to the employees who perform similar tasks and who are given the same title to work on the same responsibilities. The differences when realized might be the cause of many problems between the employer and the employee, and also between the employee and the colleague working on the same duties.
The relational rewards on the other hand are intangible and are meant to enhance the transactional rewards. Organizations always consider rewarding employees depending on the environment to which they operate. Thus, it is important to analyze the working environment for the personal assistants in the advertisement company. The relational rewards cannot be copied by other organizations, and they are unique to the needs of the different employees working in the different work organizations (Cascio, 2015).
Factors contributing to pay differences
The differences in pay between the employees might be as a result of different factors. One of the factors that might result to pay difference is the level of education. Some of the employees who might be carrying similar duties might relate with different education levels (DeCenzo, Robbins, and Verhulst, 2016). This means that their expertise level is different, thus the reason why they are compensated differently. Educational qualifications are one of the factors that candidates use to compete for a job position in the market. According to Lepori, Seeber, and Bonaccorsi (2015), education qualifications relate with dynamics of growth, and this therefore is an aspect that is considered to be of significance in promoting the career of an individual employee. This also acts as a determinant to making decisions on the issues of pay and rewards to the employees. Raising pay to an employee who is qualified is one of the issues that might result to the employee experiencing a sense of satisfaction. Ann and Ben have the same educational qualifications. They both have a degree in Public administration, and thus are considered fit to work in the position of personal assistants for the executives. Based on the education level, Ann and Ben should not be given different salaries.
Another factor that might be the result of pay difference is the experience that the employees have in working in that particular position. Ann graduated two years ago and has worked in the company for a period of one year and a half. Ben on the other hand has been working in the company for the past six years. Although they have the same title and engage in similar roles and responsibilities, Ann and Ben have different experiences in the number of years that they have been working as assistants. This is an aspect that might have contributed to the difference in pay between the two employees. Ben is definitely an employee who because of the experience is identified to be more qualified and can produce quality results. Some of the tasks that might be challenging to Ann might not be as challenging to Ben because he certainly is advantaged because of engaging in such tasks for a longer period of time. He is more exposed, and has the skills and knowledge that is needed to accomplish the tasks compared to Ann.
Adding to experience, performance is another important issue that has resulted to employees getting different pays for the same job positions. Some of the organizations give pay raise to the best performing employees. This is clearly a good rewarding strategy that motivates people to continue performing well. Some organizations identify with the fact that economic gains contribute to the development of better performance from an employee. Nevertheless, it is important to note that some of the organizations do not necessarily engage in a pay rise to performing employees (Perry, Engbers, and Jun, 2017). Compared to the employees who have an average performance, an employee who gets to interact well with others towards meeting the company goals, the employee who exceeds the challenges and one who makes fewer mistakes is likely to be paid more compared. The fact that Ann has been in the company does not mean that she is a poor performer, and that she has to receive less pay. However compared to Ben, her performance is slightly low because she is prone to making certain mistakes. In fact, Ben’s performance has been extraordinary, probably of his experience in the company. In fact, the management trusted him to train Ann when she joined the company. Therefore, having Ben receive more pay is an aspect that can well be understood in this case. In addition, there are some tasks that are only assigned to Ben, and the reason behind this is because Ben has the knowledge on how such tasks should be completed. Ann on the other hand has not yet been given the authority to complete such tasks. In most instances, such tasks are private, and some require authorization from an experienced and trusted person. In some instances, Ben also works for more hours than Ann does. This clearly shows that Ben is trusted to accomplish some tasks, thus the reason why he should be rewarded highly.
The other aspect contributing to pay difference is the negotiation that the employee made with the employer when she was seeking employment in the company (DeCenzo, Robbins, and Verhulst, 2016). The initial pay for Ann was $35,000, but she negotiated for a pay rise and now receives a pay of $38,000. This shows the aggressive nature of the employee towards getting rewarded for the services she delivers to the company. Ben on the other hand had started working in the company with a pay of $35,000. His employer has been increasing his pay based on performance and experience, and this is the reason why he is currently receiving a pay of $42,000. Therefore, there is no basis to argue that Ann was receiving a less pay because she failed to negotiate. Rather, she is considered to be much better because her starting salary was more than Ben’s.
Reward Strategy and Equal Opportunities Policy
Reward strategy relates with the policies, practices, and processes followed in appreciating the employees with the purpose of influencing their performances. Reward strategies within organizations are part of the human resource functions that seeks to motivate the employees towards performing well to achieve the organization goals. The human resource officers take on the role of ensuring that all employees receive the right transactional rewards depending on the skills and expertise, education, and experience. The human resource managers also identify with relational rewards, which are made unique depending on the environment where the employee is working in (Noe et al., 2017).
Personal assistants in an advertising company are very important personnel because they are the people who closely work with the executives to ensure that they effectively interact with the clients. These personnel ensure that all the plans made by the executives are effectively implemented. With these kinds of people, the organizational managers can effectively engage in business activities at the right time and in the right way (Bakker, 2017). Therefore, it is important to evaluate the means through which such employees can be motivated in order to ensure that they get the morale to continue working in the position of the executives. In addition, there is need for the compensation committee in an organization to evaluate the non-tangible rewards given to the executives, and find out which of those should be given to the personal assistants in order to ensure that they feel recognized and appreciated as the support staff to the company executives. For example, there is need for the personal assistants to be given bonuses in terms of cash and other incentives, and also receive other benefits that should make their lives comfortable in and out of the organization.
Although Ann may have related with the difference in her pay to that of her colleague Ben, she enjoys other relational benefits that create a balance on her work and her personal life. She also enjoys privileges, especially because of her position as an executive. When bringing in an argument on the expected reward strategy for the employees, the human resource managers should be willing to come up with the right tangible and intangible rewards to ensure that they meet the interests of the employees.
The Equal Opportunities Policy relates with the commitment of the organization to ensure that everybody is treated fairly. It provides guidelines on how to deal with issues of controversies, and thus should be considered while evaluating the reward strategy for the employees. The policy aligns with the organization objectives to create awareness on issues of employee discrimination and harassment. The policy provides guidelines on how to avoid victimizing employees, and propels the management to ensure that such issues do not happen (Noe et al., 2017).
With the Equal Opportunity Policy, the organizations work towards ensuring that they raise the awareness of the employees. This prevents instances when workers humiliate other workers on basis of their unique characteristics. Employees should know that issues of discrimination and humiliation are unlawful, and thus should be identified at the places of work. No person should be discriminated on the basis of any personal characteristics such as religion, race, gender, or even color and ethnicity. Any person is expected to face the consequences in the event when they engage in such unlawful behavior (DeCenzo, Robbins, and Verhulst, 2016). If in case Ann might have felt that she was being humiliated by Ben, that would be a different case that would have resulted to making Ann’s complaints viable. However, there was no any form of humiliation from Ben because Ann was receiving less salary. In fact, Ben did not know the amount of money that Ann was receiving as salary. In fact, he had made it his responsibility to help Ann become a good performer, and their relationship was very effective.
Reward is a way of increasing employee morale, and Ann was right to ask for a pay rise based on the fact that she identified herself to be in the same position as Ben whose salary was more. The equal opportunity policy seeks to identify with the aspect of increasing the morale of the employees. Employees always want to be part of an organization that identifies with fair treatment even when it comes to pay and other relational rewards. Ann was right to ask about the pay difference. The human resource managers at the company also had the obligation to explain to Ann the reasons why the pay difference was evidence. This was the gateway to creating awareness and ensuring that every person in the organization is given an opportunity to air their grievances.
Defending the difference in pay
Having analyzed the different issues that might have resulted to different pays between the two employees, it is important to note that an employee might perceive the issue to be unfair, and in some instances create a boundary between them and the other employees. For example, after convincing Ann that Ben received a higher salary because of the additional duties and the experience he had working in the company, Ann might not feel satisfied, and may even start to envy her colleague Ben. This might create tension between the two employees, who in some instances are required to work together towards meeting the company goals. This them may result to Ann having a difficult time working with Ben, and this may in turn result to the two employees destroying their value for the relationship that they had already established while working together (Gallus and Frey, 2016). In such a situation, the employer should be ready to revise the pay by ensuring that Ann feel satisfied while working in the organization and together with Ben. The reason why the employer should revise Ann’s pay is because she is a good employee and has been trained well to work for the company and fits in the position.
The fact that Ann received a slightly lower salary than Ben can be defended especially on the basis that Ben was employed six years before Ann, and he had to engage in the process of completing more tasks that Ann had not been able to accomplish in the time of her stay in the company. Ben is the person who had trained Ann to engage in all the responsibilities that she was expected to perform as a personal assistant. His experience and expertise in the position should be rewarded differently compared to the person who just joined the company and got knowledge from him. Therefore, the difference in pay can be defended based on these important issues.
Losing Ann from the company because of the reward strategies that had been developed may result to the company experiences more losses in time and finances especially when recruiting a new employee, training them, and them getting a good experience to work with clients in this sensitive environment. Aguenza and Som (2018) argue that financial rewards, which are transactional as well as career development and recognition, are some of the issues that contribute to high retention rate among the employees. Giving Ann the opportunity to grow in career to perform some of the duties that Ben perform would be a way of resolving the issue and ensuring that Ann experience a sense of satisfaction while working as the company’s personal assistant to the executive manager. Instead of revising the pay immediately, the employer should encourage Ann to continue working for the company and improve in her performance. This is because these are some of the issues that resulted to the increase of salary for Ben from $35,000 to $42,000. Thus, Ann has to learn to be patient and work smart in order to receive the same salary as Ben does.
The human resource and the compensation committee at the company apprehend the equal job opportunity policy, and also focus on ensuring that there is gender equality (Cascio, 2015). Therefore, Ann should not at all think that the pay difference is as a result of gender discrimination just because she is a woman. She should also not expect the employer to immediately increase her pay, but rather she should understand that the pay difference is as a result of different factors. In order to prevent tension between her and Ben, Ann should relate with the management effectively to get a clear picture of the situation and not bash around with claims that is being paid less.
The performance of employees within an organization is dependent on the rewarding strategies implemented to ensure that the employees feel motivated to work for their employers. However in some situations, some employees may lose the morale of effectively becoming part of the group working towards attaining the company goals. For example in a situation when an employee receives less pay compared to the colleague, the chances of losing the morale to work are very high especially because of the pay difference. However, there are factors that help describe the pay difference, and in some instances, the aspect of discrimination in realized. However in some situations, the pay difference is sensible depending on a nu be of characteristics. In the case of Ann and Ben, Ann received less pay because she was inexperienced compared to Ben. Ben had worked for a longer time and was given more tasks to perform because he had gained the trust of his employers. In addition, Ben’s salary was not $42,000 at the beginning of his career, but his salary has increased progressively due to performance and career development. Ann cannot therefore argue against the salary given to her colleague just because they were given the same title and carried out similar roles.
Aguenza, B.B. and Som, A.P.M., 2018. Motivational factors of employee retention and engagement in organizations. IJAME.
Bakker, A.B., 2017. Strategic and proactive approaches to work engagement. Organizational Dynamics, 46(2), pp.67-75.
Cascio, W.F., 2015. Managing human resources. McGraw-Hill.
DeCenzo, D.A., Robbins, S.P. and Verhulst, S.L., 2016. Fundamentals of Human Resource Management, Binder Ready Version. John Wiley & Sons.
Gallus, J. and Frey, B.S., 2016. Awards: A strategic management perspective. Strategic Management Journal, 37(8), pp.1699-1714.
Greene, R.J., 2018. Rewarding performance: Guiding principles; custom strategies. Routledge.
Lepori, B., Seeber, M. and Bonaccorsi, A., 2015. Competition for talent. Country and organizational-level effects in the internationalization of European higher education institutions. Research policy, 44(3), pp.789-802.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Perry, J.L., Engbers, T.A. and Jun, S.Y., 2017. Back to the future? Performance-related pay, empirical research, and the perils of persistence. In Debating Public Administration (pp. 27-65). Routledge.
In your organisation or one with which you are familiar, identify an area of employment where employees who do similar work are paid differently. Differences in pay for similar work arise for a number of reasons – status, performance, age (over 25 and under 25), competency, experience, etc. For the purpose of this assessment, pay means ‘all contractual terms under which a person was employed whether concerned with pay or not’. It covers both transactional and relational rewards that are specific to the contract of employment.
When you have chosen the area of employment for consideration produce a 3000 word written report that includes the following tasks (each task is equally weighted):
- Justify your choice of area of employment in relation to environmental change and/or organisational strategy and compare and analyse the differences in pay between these employees within the area of employment (this should include data on all contractual rewards).
- Considering your Reward Strategy and Equal Opportunities Policy, evaluate how the differences in pay between employees in the employment area can be defended taking into consideration HR processes and practices and legal compliance.
In conclusion, outline and justify your defence for the difference in pay providing clear evidence to support your case. Where the differences in pay cannot be defended, explain the potential discrimination in pay and how it should be resolved. Your report should be cogent, articulate and focused, yet draw on as many sources of worthwhile and authoritative evidence that you can find. All such sources should be properly identified.
All submissions should be in the region of 3,000 words plus or minus 10% and references should be added in the Harvard Referencing Format. There is a Harvard Referencing tutorial in the Resources Area which outlines the formatting required.