The need for rewards and systems Essay

The celebrated employee motive theories have worked on the employee ‘s demands and anticipations. One of the most normally known theories of motive is the hierarchy of demands theory, established by psychologist Abraham Maslow and promoted during the early 1960s.

It claims that single demands form five degrees of hierarchy. ( http: //

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order now )In the Maslow ‘s hierarchy of human needs the self-importance, self-esteem demand is at one of the top degrees of human demands. This basic demand can merely be fulfilled by accomplishment, acknowledgment, publicities and fillips. Therefore honoring employees on the footing of their good public presentation. ( Management by Kathryn M.

Bartol and David C. Martin, Third edition )Employee acknowledgment plan is a technique which wagess employees who from their work activities bring critical effects to the concern operational results. Once you recognize persons positively you expect that their public presentation should be repeated in the hereafter as to convey company benefits. A nice employee acknowledgment plan should be simple, instant, and hence should possess high reenforcing capablenesss. While working on the acknowledgment plan it should be motivated that it ‘s powerful for both the concern and the work force.

The Aims of Reward Systems

Hills, Berhgman and Scarpello ( 1996 ) specify the purposes of wagess systems as follows:To capture campaigners who possess the right qualities and making for the organisation goods to carry through. When mensurating the comparative methods of different occupations, possible appliers normally focus on wage as a mention point because informations about pecuniary wagess are more offered and seeable than other necessities in the wages bundle.To keep the work force who possess the nucleus accomplishments and competences which is required to the organisation in future.

Employees largely seek that their directors handle them candidly and rightly.Employees on the occupation public presentation and committedness are undertaken, as honoring those refine both of import issues.At some point or the other directors should be honoring their employees on their attempts.The wages should be just if organisations want them to move as a incentive for their employees.

( Storey and sissons 1993 ) , ( Harrison 1993 )Tyler and Bies ( 1990 ) note those single factors such as holding their positions taken into history when direction determinations are being made and the grounds clarified. However pay research has by tradition concentrated on distributive equity and employers` schemes of offering wage additions, fillips and other short-run redresss in an attempt to heighten the `felt fairness` of work forces towards their wagess. ( Jones, Scarpello and Bergmann 1990 )Five of import issues which should be addressed if an organisation wants their acknowledgment plan to be seen as motivation and rewarding and important for the success of an organisation.

Five Tips for Reward and Recognition

The public presentation engagement which constitutes rewardable behavior or programs should be created.All the employees must be considered while acknowledgment plan is carried out.

Actions which are being rewarded and acknowledged must be known to both employee and the employer.The acknowledgment should be carried out early as to animate the action which the employer wants from his work force.Planing awards such as “ Employee of the month ” and similar 1s should non be considered as this type of procedure is normally taken as “ favouritism ” where directors are the 1s who choose persons to accept the acknowledgment.

( Five Tips for Effective Employee Recognition by Susan M. Heathfield, Guide )

( EXAMPLE 1 ) At Mobilink GSM Pakistan employees are non seen merely as a cost but besides as a resource in which the company has invested in, from which it expects valuable returns. The company uses technique of paying its employees above the normal market criterions to retain the top endowment available, which subsequently can interpret into extremely effectual and efficient work force.

The inducement strategies and aims are openly laid out to the employees on regularly footing.

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Benefits of Wagess

Helps Increase employee productiveness.Improve work force keeping and battle.Enable greater consistence through public presentation appraisal procedure.Close accomplishments gaps with directed preparation.Increase coaction and communicating among the employees.Get a speedy return on investing ( ROI ) .

Reward Program Designing

The cardinal facets that generate ideal acknowledgment plans are as follows:Extracting information sing the actions or public presentation required from employees that will beef up the organisational ends and aims.

Roll uping informations of a group`s earlier public presentation or behaviour in footings of cardinal measurings.Planing and finding an ideal wages plan.Make an apprehension to the employees of the wages system.A reward plan must be able to place concern or group ends and the employee behaviour or public presentation for gaining benefits such as increased productiveness and motive. At times corporations on a regular basis attempts the error of honoring behaviours or achievements that one or the other floating-point operations to farther corporate purposes or may be interrupting them. The sum work allotted by a concern should non be undertaken while be aftering a wages plan if value is an indispensable issue for an enterpriser.Correctly mensurating the sum of passage warrants the plan pays off in footings of corporate marks and ends.

As wagess have an existent cost in footings of period or money, little concern holders need to O.K. that public presentation has really enhanced before honoring it. Once once more, the steps need to associate to a little concern ‘ ends. As Linda Thornburg noted in HR Magazine, “ Performance steps in a rewards plan have to be linked to an overall concern strategyaˆ¦ . Most reward plans use multiple steps which can include such variables as improved fiscal public presentation along with improved client service, improved client satisfaction, and decreased defects. ” ( hypertext transfer protocol: //hrview. )Making certain that the wagess plan N has to be effectual, the of import points should be clearly spelled out to all the employees. Motivation relays ‘ on what is asked from employees at all times and he or she is able to acknowledge it. After this process has been done, reenforce the initial original communicating with organized meetings or memos advancing the wages plan. The house should maintain their communications simple but regular to vouch staffs are unbroken up-to-date of alterations to the system. ( http: //www.referenceforbusiness.

com/small/Di-Eq/Employee-Reward-and-Recognition-Systems.html )( EXAMPLE 2 ) At Avira a new employee engagement plan covering benefits, pensions, wage, website portal, entire wages statements etc. are developed for their employees and co-workers.

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Types of Reward Systems

There are several types of wages plans which are focused at both an individual`s and group public presentation.Cash-based net income sharing: Net income sharing is the payment to eligible employees of fiscal wagess or portions related to the net incomes of the concern.

It is extra wage which recognizes and wagess corporate attempt. The purpose is to beef up the collaborative and co-operative links between employers and employees. The pattern in some parts of Nipponese industry of giving merit wage additions and big, company, performance-related fillips at regular intervals seems to hold revived involvement elsewhere.There are two chief types of profit-sharing wage strategies:The first type consists on conventional cash-based strategies where the portion of net income is considered as a signifier of fillip distinct from and extra to normal wage. The 2nd is a more late developed theoretical account which uses the profit-linked component of wage to replace some part of antecedently fixed net incomes so that normal wage can change with profitableness.The inspiration for this latter type of cash-based net income sharing came from Martin Weitzman, an American economic expert who suggested that two chief theoretical macroeconomic benefits could ensue, full employment and economic stableness.

His contention was that associating a important proportion of the paysheet to a fixed per centum net income sharing pool would take to an enlargement of employment and a autumn in cost-push rising prices, provided net income related wage was linked to revenue enhancement grants. The employment creative activity statement goes as follows:“ If a company links 20 % of wage to net incomes, basic wage rates are hence in consequence cut to 80 % of the old rate. If the company employs extra workers, the cost is the new basic rate- 80 % of the old rate.

Since the pool remains as a fixed per centum of net incomes so because it is divided among a larger figure of employees each employee receives a diluted net income related wage. Unless net incomes rise it so becomes economically advantageous to use extra workers. ( Tony Keenan and Janis Paterson )Companies likely have less ambitious grounds for presenting profit-related wage than those put frontward by Weitzman, but they expect the undermentioned benefits.Employee will go more committed to company ends.Employee will concentrate on cardinal concern aims by taking a more active involvement in the companies they work for.

Incentives for employees will go stronger as the proportion of wage which is net income related additions with lifting net incomes.Pay will fall when net incomes are low, thereby cut downing the demand for redundancies- the employment stableness statement. ( Heriot-Watt University, Human Resource direction by Tony Keenan and Janis Paterson )Employee Shareholding: Employee shareholding is a non hard currency version of net income sharing. There are several types of employee shareholding strategies, the most common being:Approved Deferred Share Trust ( ADST ) – where portions are allocated to employees in proportion to basic wage and held in trust for a specified clip after which they can be sold by the employee without incurring revenue enhancement.Save As You Earn Schemes- where employees make regular parts to a nest eggs fund over a period of several old ages at the terminal of which the money is used to purchase portions at a pre-established, favourable monetary value.Discretionary Share Option Schemes- where selected employees, normally senior executives, are granted options over portions as portion of performance-reward strategies. If these options are exercised within a specified period of clip after the day of the month of the grant they are exempt from income revenue enhancement.

( Human Resource direction by Gary Desler )( FOR EXAMPLE 3 ) BP Employee Share Plan-commenced in 1990 and provides employees with an chance to get bp portions on favourable footings. Around 85 % of eligible employees, or over 1650 employees, take part in the portion program where employees can buy up to a maximal value and measure up for a duplicate figure of portions provided freely by BT ( the bound, which depends on company public presentation, has ranged late from $ 3300 to $ 6000 ) .When employees become the good proprietors of all portions instantly, their purchased portions are restricted for 2 old ages and the free matching portions are restricted for 3 old ages.

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Variable Wage: Pay-for-performance or variable wage is such a wages plan where a little portion of an individual`s wage is considered to be at hazard. Variable wage can be connected to a company`s public presentation or an individual`s achievements or ant mixture of these.

It includes the processs as employee portion ownership, fillip plans and erstwhile awards for of import events or activities. Many organisations pay less than their challengers but on the other manus actuate them utilizing a variable wage plan alternatively. As said by Shawn Tully in Fortune, “ the testing of a just wages is simple. A reward plan must be able to pull out adequate future public presentation from employees which exceeds the excess costs of the plan. The ends must be in their range and employees should n’t be over-burdened. “ ( hypertext transfer protocol: //www.referenceforbusiness.

com/small/Di-Eq/Employee-Reward-and-Recognition-Systems.html )Bonuss: Reward plan as fillips are in long usage by many American corporations for old ages now. Its often use to animate sales representatives to bring forth added concern or to accomplish high degree net incomes for the organisation. These reward plans are besides used to place many squad accomplishments. Business public presentation at team-work, sections, or corporation-wide degree is considered so valuing persons in many organisations now.Incentives such as fillips are short-run.Awarding employee ‘s public presentation for the last twelvemonth as said by critics normally says short-run inspiration instead than future oriented accomplishments. Such plans are needed to be sagely organized to do certain they are rewarded for above and beyond a team`s regular operations.

If non it will more considered as a merit wage or entitlements instead than acknowledging exceeding work performance.Moreover, experts says that fillips are legitimate agencies of honoring employees for their exceeding work and adds as a tool to hike future attempts.

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( EXAMPLE 4 ) General Electric`s main executive doodly-squat welch recognizes the power of acknowledgment.

He motivates employees by personally passing out fillips for good work. He invariably sends handwritten notes to directors and employees thanking them for a occupation good done, proposing betterment, and showing encouragement during household crisis. ( Organizational Behavior 9th edition ; P.Robbins San Diego State University )( EXAMPLE 5 ) Pets at place employees are rewarded through fillip strategies, instant hard currency wagess, Thank you notes etc. The company has been paying out record fillip payments to hive away directors and co-workers for the last the three old ages. The company have self-generated and daily acknowledgment plan.

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GROUP-BASED REWARD SYSTEMS: In the increasing sum of squad based organisational work many employees are looking to honor squads who are able to make their aims. Wagess such as fillips, gainsharing and net income sharing are illustrations which organisations use to present their employees. A concern individual can either honor a group part or an single or any mixture of the both. Group based wagess are based on the measure of a squad ‘s overall public presentation and attempt the members put together whereas persons are rewarded for their single portion of public presentation. Such reward plan besides tend to honor fighting workers with mean and above norm workers moreover increases an inspiration of persons attempts to shared concern purposes.

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( EXAMPLE 6 ) Toyota was enthusiastic to demo grasps to its United Kingdom staff for their best-ever consequences in public presentation, threshing their German co-workers with an 11 % gross revenues addition on the earlier twelvemonth. Within yearss of acquiring this information, the Managing Director was able to publicise that all workers would be having a ‘thank you ‘ in the following twenty-four hours ‘s mail.

This was a smart gift billfold covering a Marriott encouragement award branded peculiarly for Toyota, offering two darks ‘ deluxe adjustments for two people at any Marriott Hotel in the United Kingdom. Toyota besides prearranged with Marriott that all chief supernumeraries such as breakfast and dinner would be counted in. The hotel besides set up dedicated toll-free phone reserves figure for relaxed reserve.

This employee incentive plan was kindly received by all.

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Flexible benefits: Benefits constitute the variable elements of the wagess bundle. Flexible benefit strategies offer each employee the chance to make up one’s mind within certain makeup of his or her ain benefits bundle. Schemes can include company autos, life insurance, private medical showing, child care installations and leisure nines etc. Each employee is allocated an single allowance to pass on benefits and this can be used on an one-year footing to exchange between benefits or take new 1s. ( Heriot-Watt University, Human Resource direction by Tony Keenan and Janis Paterson )( EXAMPLE 7 ) At boots employees can gain up to 40 % discretional fillip based upon degrees of client attention, gross revenues and company net income.

Further company besides gives generous vacation allowances, flexible pension strategy, wellness insurances, life manner benefits for employees and the household etc.

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( EXAMPLE 8 ) At IVRCC, India`s taking technology procurance and building company the keeping programs are extremely considered.They include vechile loan, matrimony loans, instruction loan, abroad plans, empowerment etc.

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Addition sharing: Derive sharing programs are sometimes referred to as cost-reduction plans the most widely known of these the Scanlon program. The Scanlon Plan has two primary characteristics. One is employee engagement through the formation of production commissions at section degree to develop cost salvaging suggestions for bettering productiveness and quality. These suggestions are so screened by more senior commissions to measure their viability. The 2nd characteristic is the distribution of the nest eggs originating from the acceptance of these suggestions. The suggestions are assessed in footings of an betterment in added value or other steps of productiveness such as the ratio between labor costs and gross revenues value. The value of the program lies in the acknowledgment that ‘the effectual usage of participatory direction requires congruity between the wage system of an organisation and its manner of direction ( Beaumont 1997 )Most Used Reward Tactics to Motivate EmployeesLeaderships ‘ quotation marks employee acknowledgment as the best used motivational tactic-recognition plants for maximal state of affairss within most concern civilizations.

The undermentioned chart below indicates, employee acknowledgment is the most prevailing motivational scheme, with gift certifications the 2nd most celebrated. Distinctive events, the 3rd most named scheme, encompasses planned acknowledgment plans for illustration award events, group parties or excursions, and any of a figure of particular events to honor employees for their difficult work. Clearly and supportively, although slightly unexpected, face-to-face communicating is a strong force in appealing about alterations in employee behaviour.( hypertext transfer protocol: //www.performanceforum.

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Of all the organisational intercessions, reward systems have the most influence on employee behaviour. Reward systems may include traditional strategies such as wage based on clip at work and pay by consequences and modern-day strategies such as public presentation related wage, fillips and employee shareholding. However reward systems such as non-financial wagess and indirect wage. Reward systems are used to pull, motivate and retain employees. Although there are no regulations for placing which reward systems organisation ‘s should follow, employees expect their employer to follow a just day`s work with just day`s wage.

B ) IntroductionIn the restructuring procedure many companies do a thorough occupation analysis foremost which is required to run a company`s long run programs consequently and expeditiously. Job analysis involves many stairss to run a proper execution of the program in front. It is the systematic designation of the key undertakings which have to be done in a occupation and the suited accomplishments and aptitudes required to execute these expeditiously. One technique involves circulation of questionnaires to job-holders who are to depict their occupations. This method is comparatively clip devouring for employees. A 2nd attack is to supply employees with a list from which they have to take those points which apply to their specific occupation. With more complex undertakings, one-to-one interviews between the analyst and job-holders may be preferred.

There is no charming expression for make up one’s minding which method of occupation analysis is most appropriate in any given state of affairs. Ultimately the analyst must be guided by common sense and practical experience in make up one’s minding the appropriate method for any given set of fortunes.On the other manus human resource planning includes appraisal of how many qualified people are necessary to transport out the assigned activities, how many people will be available, and what if anything, must be done to guarantee forces supply peers forces demand at the appropriate point in the hereafter.

Job analysis and Human REsource Planning

Job analysis is taken for the undermentioned grounds.

It helps take employees either from the ranks of the bing staff or the enlisting of new staff.It supports puting out the preparation demands and demands of a specific occupation.It delivers grounds to assist in pick doing about the type of tools and stuffs to be employed with the work.The grounds collected during occupation analysis, including recognized and profiled know-hows of employees in their work occupations, can be used as indicant for future staff advancement and publicity.

Last, the procedure assists placing countries of hazard and danger at work. ( http: // )

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The occupation analysis may include these activities:

Analyzing the occupation undertakings of present work forces.Working on Internet survey and detecting sample work descriptions online or offline underscoring related occupations.

Analyzing the work responsibilities, duties, and responsibilities that needed to be accomplished by the member make fulling the topographic point.Investigating and sharing with other endeavors that have related occupations, andArticulation of the most important effects or parts required from the place.

Important inquiries to be asked in the intent of occupation analysis

World: What do people make in their occupations?Percepts: What people believe people do in their occupations?Norms: What do people believe should be done in their in their occupation?Future alterations or programs: What should people be able to make in their hereafter?Job analysis is a critical starting point for an organisation as to place their hereafter demands and demands to smoothly run their operations.

Human recourse planning on the other manus plants as a 2nd of import phase which solidifies any organisation ‘s place in the on the job environment. Cardinal elements of human resource planning are as follows:

Need and importance of human resource planning:

It forecast demands of future forces needs to avoid the state of affairss of excess or lack of work force in future, it is of import to be after your work force in progress. For this intent a proper prediction of hereafters concern needs helps you to determine our hereafter work force demands. From this angle, HRP plays an of import function to foretell the right size of work force in the organisation.( EXAMPLE 9 ) Toshiba`s work analysis and support system: On the technology store floor, since the sensing of waste and betterment had been grounded on sentiment by individuals, the clip necessary for betterment was dual every bit long as the clip compulsory for observation. This encouraged Toshiba to bring forth a work analysis system for back uping the sensing of waste in assembly work and transit work by utilizing audiovisual cameras and radio tickets to observe worker motions and excerpt facets of insistent work that vary from the norm and on a regular basis happening work forms.

A bead of 70 to 75 % in surveillance and analysis clip associated to conventional methods is estimation in the instance where the attempt of four workers for one twenty-four hours is calculated. This will do likely labour salvaging and superior velocity in work upgrading activities. Currently Toshiba HA Products Co. , Ltd.

is measuring this system. ( hypertext transfer protocol: // )( EXAMPLE 10 ) Harley Davidson was supported by Accenture for their concern betterments by implementing the Accenture Human Capital Development model ; it helped the company to understand its strength and failings.

Furthermore Harley Davidson was able to back up their chase for great public presentation in the hereafter. ( hypertext transfer protocol: //

htm )Header with alteration: HRP enables an endeavor to get by with alterations in competitory forces, markets, engineering, merchandises and authorities ordinances. Such alterations generate alterations in occupation content, skills demands and figure of human resources required.Resistance to alter & A ; move: The turning opposition towards alteration and move, self-evaluation, trueness and dedication doing it more hard to presume that organisation can travel its employees everyplace. Here HRP becomes really of import and needs the resources to be planned carefully.

Other benefits:

Improved planning of undertakings to develop directors.Administration can prevent instabilities before they become unmanageable and dearly-won.Extra clip is delivered to turn up endowment.

Higher disposal has a superior position of HR dimensions of concern.A healthier chance exists to encompass adult females and minorities in upcoming growing programs.

Human resource system helps in:

Making good concern environment.

Completing organisational ends.Forecasting work force demands.Measuring manpower supply.

Matching manpower demand-supply elements.( hypertext transfer protocol: // )( EXAMPLE 11 ) Indian Oil received the esteemed range award for best patterns in human resource planning for the twelvemonth 2005-06.The award was given for their best Hour activities and committed for its employees. Indian oil has been throughout benchmarking its human resource activities.

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Once successful execution of Human resource planning has been done. Firms should seek that every component of the program runs swimmingly and consequently. But in certain instances when houses merge together and things do n’t travel harmonizing to programs there should be redesigning of occupations and processs to guarantee procedures runs usually. In times of amalgamations many employees are non capable of managing such occupations which they are non trained for so their public presentation degrees go down. Redesigning the occupation helps them to get the better of these factors.

Job redesign is a series of methods that challenge to raise the diverseness of undertakings that employees achieve in bid to come on motive and satisfaction at workplace. One method is ‘Job Enlargement ‘ which is the process on increasing the measure of undertakings are given to employees for the interest of larning new activities at workplace. An unconventional technique called ‘Job Enrichment ‘ is considered preferred as it non merely increases the figure of allotted undertakings but besides give opportunity to employees to execute some high accomplishment work. In many modern-day organisations callings have been enriched by doing employees accountable for the betterments in the occupation they do.In another instance employees are asked to execute much assortment of occupations so they move from one topographic point to another inside the organisation at several times within the operational twenty-four hours or operational hebdomad. As they have the right aptitude to execute a assortment of occupations.

Such activity of occupation motions is known as ‘Job Rotation’.This technique means that workers are to the full elastic, and it might ( although non every clip ) necessitate them to accept undertakings of assorted proficiency levels-in such occasions, rotary motion involves both expansion and enrichment.

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( Example 12 ) At Mobilink GSM Pakistan Ltd ( cellular company ) supervisors and employees create development programs that includes preparation, new assignment, occupation enrichment, self-study or work inside informations etc.

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Job analysis and human resource planning are of import factors which run together for a company`s long term growing and stableness. Analyzing the occupation foremost and be aftering human resource consequently is a cardinal factor which must be undertaken by every successful organisation. Important factors which are related to both the stairss must be kept in head while taken all the determinations for a company`s hereafter. Subsequently if the human resource planning fails to present what it promised the procedure of occupation redesign must be undertaken to guarantee organisation succeeds in the hereafter.


Heriot-Watt University, Human Resource direction by Tony Keenan and Janis Paterson.

Management by Kathryn M. Bartol and David C. Martin, Third edition

Human Resource direction by Gary Desler.

Organizational Behavior 9th edition ; P.Robbins San Diego State University.

Five Tips for Effective Employee Recognition by Susan M. Heathfield, Guide.

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