In every business, reward plays an immersive role in accomplishing the desired goals and objectives. Reward is considered as significant part of performance management and organizational culture system. Strategic and total are the two types of rewards. The strategic rewards help in developing the formal and written strategy (CIPD, 2023). Reward helps in offering the incentives and motivations for the workforce to accomplish the objectives and goals. By understanding the various principles of rewards, Home international can design the reward system in a way that encourage and recognize the employee’s behaviour. In addition, consistency is regard as one of the significant principle of reward and it directly affects the performance management and organizational culture (Lindström et al, 2021). In this principle, it is crucial for the organization to manage the rewards consistently. According to this principle, it is significant for Home international to provide similar rewards to the employees for their same level of performance.
This principle of reward influences the workforce to strive for better performance since they know that company will reward and recognizing their efforts. Along with this, transparency is another significant principle of award that can be implementing by the organization. According to this principle, home international can require to communicate the reward criteria and system to the employees clearly and openly. Apart from this, both principles are crucial to the organizational culture and performance. Consistency makes sure that the entire workforce to receive rewards and fair treatment, on the other hand, transparency allow the workers to understand the method they will reward (Silver et al, 2021). Both principles of rewards can help Home International to create the positive and engage working environment which positively impacts the business performance.
1.2 Implementation Of New Policy Initiatives And Practices Of Reward
In every business, it is important to implement the policy practices and initiatives regarding rewards in order to achieve the particular goals and objectives. The reward policy initiatives and practices are aligned with the overall business strategy. It is responsibility of Home International to implement the initiatives effectively and communicate to the all the employees reliably. There are wide ranges of reward policy and practices that can be execute by the company (Laplane and Mazzucato, 2020). The initiatives and practices consist of providing employees with flexibility and choice, mixture of financial and non-financial rewards, monitoring and assessing the effectiveness of reward system and ensure that rewards are transparent and fair. It can be crucial for the organization to incorporate reward practices and policies to consider that, the pay policy can be competitive enough to the market of external labour from which they can retain the best talent. At the time of executing the reward policies and practices, it is important for Home International to consider the level of pay because it is directly related to job evaluation (Hu et al, 2020). It can be vital for given business to implement the policies which are based on the lawful requirements and all the reward payments and policies can fulfil the legislations including minimum wage and statements concerning discrimination. Regarding the pay awards, the major factor is to evaluate the budget for annual pay and framed the policy that includes approaches related to performance.
1.3 Impact Of People And Organizational Performance On Reward Approach
The reward approach is based on the particular needs or requirements of the business and its employees. In every organization, the performance of the people has massive impact on the reward approach. If the employees are not able to perform their job up to expectations, then the company may require updating the system of rewards. Similarly, if the workforces are above expectations then the approach of reward can encourage and recognize their efforts. Along with this, organizational performance is also regard as one of the significant element at the time of designing the reward system for employees (Anwar and Abdullah, 2021). It can be beneficial for Home International to design the reward system effectively because it helps in achieve the goals and objectives successfully. By assessing the performance of employees, the organizations can pinpoint the enhancement areas and develop the incentives to motivate and improve the performance of employees. By offering workforce rewards or fulfil the targets the company can ensure that it is motivate to operate and accomplish the goals and objectives. This can increase morale, productivity and improve the organizational as well as employee’s performance.
However, if company is developing the poor reward system then it leads to decrease productivity and increase the labour turnover which ultimately negatively impacts the organization’s and employee’s performance (Griffin, Phillips and Gully, 2020). Along with this, considering the opinion of individuals the employee are engage, influenced and retained in working appropriately by diverse forms of financial and non-financial rewards. On the other hand, from business perspectives, some workforces considering the performance as a significant element for the development of reward system.
1.4 Different Types Of Benefits Offered By The Organizations
The organizations can provide wide range of benefits to their employees from which they feel motivate and encourage to do work which ultimately positively impacts their performances. A financial reward is one of the common types of benefit that is provided by the company to its employees. Implementation of this type can be beneficial for Home International because it helps in boosting the employee satisfaction, encouraging team work and improving productivity. Financial reward can take the form of commissions, bonuses and salary. Additionally, another significant type of benefit is non-financial reward that is providing by the business to its employees (Malek, Sarin and Haon, 2020). This type of reward does not have monetary value and it includes flexible working arrangements, paid time off and company cars etc.
Non-financial rewards also help the organizations and employees to improving performance, motivation and productivity as well as retention. Intrinsic and extrinsic are another type of benefits which can be provided to the employees. Intrinsic reward includes sense of accomplishments, purpose and satisfaction (Emmanuel and Nwuzor, 2021). The external rewards include medals, trophies and awards which help in motivating the employees and improving their performance. The intrinsic rewards are providing long lasting benefits to the employees. Furthermore, extrinsic rewards provide workers with an inner drive to follow an activity that makes them feel satisfied and happy.
1.5 Benefits And Drawbacks Of Extrinsic And Intrinsic Rewards
Extrinsic and intrinsic rewards have major contribution in improving employees and sustained organizational performance. Extrinsic rewards are recognized to be the financial tangible rewards that are provided to employees including bonuses, pay increments and other type of benefits. Extrinsic rewards are regard as significant tools to motivate or encourage the employees for improving their performance and showing their contribution. Additionally, intrinsic rewards are regarded to be psychological reward and that are achieved by the workforces on doing something meaningful (Karayanni and Nelken, 2022). Extrinsic reward is regard as one of the effective way of increasing motivation and creates the foundation for the survival. Extrinsic rewards can be considered as powerful motivator which can create a sense of right among workforces. It can be crucial for Home International to consider the type of rewards according to the organization and its workers. Most of organizations are likely to provide intrinsic rewards to the employees because it provides various benefits to them.
Workforces with intrinsic rewards are more probable to persistent in their work. Intrinsic reward helps in increase the engagement of the employees from which they feel motivate and encourage as well as likely to retain with the company for long period of time (Wollbrant, Knutsson and Martinsson, 2022). Intrinsic reward encourages the employees to put reliable efforts into their jobs which creates better work. Intrinsic rewards helps in improving the satisfaction of employees in order to promote greater loyalty and contribution.
1.6 Performance Management Approaches
Organizations are adapting wide range of approaches in order to manage the performance of the employees in the effective manner. Performance review meeting is regard as one of the significant approach of performance management. The key purpose of this approach is to inform the administrative decisions like bonuses, pay, promotion etc., and to support the professional improvement and growth. This approach is effective for both employees and managers within the business (Moynihan, Baekgaard and Jakobsen, 2020). Performance review meeting helps the workforce in increasing their understanding regarding what they are doing and what can be enhanced. Implementation of this approach can be beneficial for Home International because it helps in developing the personal development goals, improving skills and performance of employees. Performance review meeting helps the workforce to grow in their professions, specifically if they are looking to ultimately advance with the organization to a higher role.
Reviewing the performance of employees on continuous basis helps enhancing their performance and productivity. With the help of this performance management approach, the employees can receive feedback regarding their job behaviours and deliberate improvement areas. This can assists the workforce to grow within their roles and build the professional skills. Furthermore, 360 degree feedback is also regard as one of the crucial performance management approach that is adapt by the organization to assess the performance of employees. It is a method for people to understand their personal weaknesses and strengths by using the constructive feedback (White et al, 2021). Adaption of this performance management approach can be valuable for Home International because it helps in increasing self-awareness, reduce workplace bias, enhance decision-making, creates open culture, improves work relationships and promote team building. This performance management approach aids in fostering the self-awareness by determining the improvement areas which facilitates professional and personal development for people. However, this approach includes input from several people which can incorporate biases into the feedback. This tool helps in addressing the growth areas which ultimately positively impacts the productivity and performance of the employees. This tool also assists in creating the personalized development plan which are relied on the feedback and promoting the growth initiatives as well as practical training.
1.7 Role That People Practice Professionals To Ensure The Judgements
It has been depicted that employers are experience several issues to manage their pay of their workforce. Conservatively, the employers make all the efforts to motivate, attract and retain the workers in order to meet the organizational goals and objectives. Generally, the employers are depending on the line managers for offering the judgements on the workforce’s capabilities and performance. To accomplish the target goals and objectives the line managers require a support from the people professionals for suitable reward judgement. For instance, it is vital for the line managers to provide essential training to the employees for better management, developing potential communication skills and handling the comprehensive challenges and making suitable decisions (Kehoe and Han, 2020). Moreover, it is essential for Home International to develop the appropriate environment from the senior management that facilitates the culture of reward among workforces. From the CIPD it has been determined that to support the line managers it can be crucial for Home International to build their capabilities, setting the standards and connecting the community (CIPD, 2023)
1.8 Line Managers Can Make Reward Judgements Based On Organisational Approaches To Reward
The line managers can make the judgements related to rewards in various methods which are based on the organizational approaches. Firstly, the line managers can actively influenced in a quarterly or annual assessments where they can meet the workforce and know their capabilities and evaluate the performance. The line managers also collect the data about the workers through various tools and resources that are relevant to performance appraisal. For example, the line managers can evaluate the employee’s performance through key performance indicators which helps in gauging their productivity towards planned goals (Mamun and Khan, 2020). The line managers can also use another several tools such as performance review meeting and 360-degree feedback that provide complete and holistic review of workforce’s employees. Along with this, the line managers can also provide the feedback to their employees on the continuous basis which is significant for providing relevant judgements regarding rewards. In every business, the line managers are also indulged to offer coaching, building and planning the specific goals for the workers. On the other hand, during this process it is essential for the employers to have strong trusting relationships with the line managers in contrast to senior managers (Rodríguez-Sánchez et al, 2020).
Part 2: Future Reward Approaches At Home International
2.1 Influence Of Internal And External Factors On Reward Environment Within Home International
In every organization, the internal and external factors have significant impact on the reward environment. These factors have massive influence on the policies and strategies related to reward within the Home International. The reward environment will be affected by the characteristics of company regarding its processes, goods and services as well as culture. Additionally, company’s culture can make an immersive impact on the policies relevant to the reward (Bluyssen, 2020). The internal factors include compensation policy, employers’ affordability, worth of employee and job that have critical impact on the reward system of organization. An organization’s policy regarding pay i.e. assertiveness to be a leader of industry in pay or desire to pay the market rate identify the structure of pay.
Employer’s affordability is another significant internal factor that will have immersive impact on the reward environment of Home International. The company which has larger market share, earn high profits and large business multinationals than they will afford to pay higher rewards to its employees in comparison to others. The capability of the organization to pay higher will be reduced by the acute competition and sector-specific economic recession. The organizations base the level of their pay on the job’s worth. The salaries and wages tend to be higher for jobs including the exercise of creativity oriented and technical jobs (Tirta and Enrika, 2020). Apart from this, labour market conditions, prevailing wage level, globalization, cost of living, union’s influence etc., are the significant external factors that will have massive impact on the reward environment of Home International. In every organization, the reward system is generally depends on the supply and demand. If the supply is high, than the company pay higher rewards to its employees due to some rules and regulations regarding minimum wages.
Economic condition is another external factor that will have significant impact on the reward environment of Home International. It will be crucial for all the organization to follow the standards of salary structure to set the rewards for the employees (Victor and Hoole, 2021). Over the time, the economic conditions of the UK can be changed so it will be important for Home International to modify the system of reward according to the individual idea because they will need to retain within competitive market atmosphere. Moreover, cost of living is another factor that will have significant influence on the reward environment of Home International. The cost of living differs from areas to area within the country. Consumer price index shows changes which take place in the average price level.
2.2. Uses Of Unemployment And Payroll Data To Develop The Insights While Developing Reward Packages
It is significant for all the companies to contrast their general performance in comparison to the competitors. For comparing the general performance to the competitors Home International will use benchmarking. When the benchmark is completed then the organization will gather the appropriate data form the all sector that helps in available of all information. This data will be significant for the Home international in order to compare its general performance from their competitors. From this, it will develop the effective strategies which help them to make the potential decisions which ultimately positively impact the overall operation and efficiency (Noorazem, Md Sabri and Mat Nazir, 2021). The most suitable method is to utilize the payroll and unemployment data with the help of competitive benchmarking process. Along with this, it will be challenging for the organization to collect the data through benchmarking process because it involves several activities of competitive organizations for evaluation, analysis and assessment. Competitive benchmarking research lays more focus on casual communication which is performed through formal interviews.
Develop the standard of remuneration will be considered as one of the effective method for application of payroll and unemployment data. It will be significant for the organization to make sure the wages of employees are competitive enough within the labour market or reflective to the workforce’s values. It will be essential for the organization to consider the wider picture about the how payroll and unemployment data impact the reward packages. It will be simpler for Home International to identify the areas for improvement in process of recruiting and developing the staff by contrasting the unemployment rate. The manger can establish their own perceptions regarding practices and policies of incentives of benchmarking in home international with the help of data visualization. It will be vital for the company to gather the data concerning to unemployment and payroll in order to assess the situation of labour region in particular region.
Unemployment data will be considered as valuable indicator for Home International to develop a reward package because it helps in provide the correct and broader picture of local labour market from which it can make effective decisions regarding incentives (Sarkar, Jena and Sahoo, 2023). The local labour market is consist of number of unemployed individuals, their level of experience and education as well as kinds of jobs accessible which helps in making the effective decisions relevant to the rewards.
2.3 Organizational Reward Package
It is impossible for the organizations to explaining the significance of wages and its advantages in order to attract, retain and hire the workforce. There are various methods demonstrate to recognize and reward the workers. Fair and reliable incentive programmes will be regard as best option that successfully support the planning of business. In reaction of the employees can modify on the basis of situations surrounding the payments and its type. It will be crucial for the organization to offer its employees an appropriate structure for compensation and other kinds of advantages. Constructed on the benchmark data from the CIPD and other sources, it will be possible for Home International to develop the reward package. The appropriate reward package represents the significance financial and pay in kind rewards in present times (Gray et al, 2021). The proposed rewards consist of salary advancement based on performance, increase of pay rates based on prorate and performance basis as well as pay awards.
Based on the insights, the proposed reward package also includes development of benefits that covers business apprenticeships and mentoring programmes. The significance of pension still persist a significant tool of the reward for current generation and hence integrated for reward package. The average market rate for the role of HR administrator within Home International will be £30,467 per year in the UK. In every business, the HR administrator plays an immersive role in the business and they are responsible for managing employee benefits, developing HR policies and ensuring all the information of business will be legally compliant. So the HR administrator will be entitled to equal rewards according to the market rate. On the other hand, in the UK, the average market rate of manufacturing operative in the Home international will be £11.59 per hour or £22,592 per year. In every business, the manufacturing operative are perform significant roles such as operate production equipment, quality control, preparing goods for shipment, monitoring the product shipment and maintaining the environment.
2.4 Legislative Requirements that impact Reward Practice
Working hours are the sum of time that employee gives to the company for completing their work. On the other hand, minimum wage is to an amount of money that is provided by the companies to their workforce for the completion of tasks within a particular amount of time. There are numerous companies such as pay councils, tribunal or labour court, governments are set the working hours and minimum wages for the workforce. The development of minimum wage system assists the employers to avoid from the manipulation of employees. It will be helpful for the employers of Home International to paying the wages to the employees for completing the work within the particular period of time. However, planning the working hours and minimum wages will have adverse impact in the incentive structure of business which causing workers to paid only when they complete the work (Sarter, 2022). Most of companies are firmly follow the rules and regulations to control the working environment in effective way. The legislation of the UK offers clear direction for the employers to make sure that workforce are given equal pay and rewards. For example, Home International can need to follow all the rules and regulations of the Equal Pay Act 2010 in order to pay the minimum wages to the employees without discrimination. According to this act, the men and women are entitled to equal pay for performing equal work in same employment.
The works are relevant equal if it has been rated under same after the evaluation of job. It will be crucial for Home International to comply all the regulations and policies of The National Minimum Wage Act 1998 that states the minimum wages according to the individual’s ages. Employment Rights Act 1996 is another legislation of the UK which are implementing by the organization to provide equal rights to all the employees. This act includes redundancy payments, unfair dismissal, zero hour contracts, flexible working etc. Furthermore, the rewards and pay are also persuade by the other legal requirements such as The Pensions Act 2008 and The Income Tax (Earnings and Pensions) Act 2003.It will be necessary for all the employers within Home International to meet the requirements of legal minimum wages and report on the executive pay ratio and gender pay gap.
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References
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Online
CIPD, 2023. Strategic and total rewards. [ Online]. Available through:< https://www.cipd.org/uk/knowledge/factsheets/strategic-total-factsheet/#the>. [Accessed On: 20th January,2024].
CIPD, 2023. Championing better work and working lives around the world[ Online]. Available through:< https://www.cipd.org/asia#gref >. [Accessed On: 20th January,2024}.
