Managing Human Resource: Concepts of Total Rewards (Essay Sample)
1. explanation OF THE CONCEPT OF TOTAL REWARD SYSTEMS AND ANALYZING VARIOUS ASPECT OF HOW THE CONCEPT LINK DIRECTLY TO ACADEMIC THEORIES OF MOTIVATION.
2. evaluation OF THE EFFECTIVENESS OF USING total REWARD SYSTEMS ACROSS TWO DIFFERENT EMPLOYMENT SECTORS.
Table of Contents TOC \o "1-3" \h \z \u Executive Summary PAGEREF _Toc496552619 \h 3Introduction PAGEREF _Toc496552620 \h 3Concepts of Total Rewards PAGEREF _Toc496552621 \h 4Total Rewards and Motivation Theories PAGEREF _Toc496552622 \h 6Effectiveness of Total Reward Systems PAGEREF _Toc496552623 \h 9Information Technology Sector PAGEREF _Toc496552624 \h 9Recruitment and Human Resource Sector PAGEREF _Toc496552625 \h 11Conclusion…………………………………………………………………….……………….12References List………………………………………………………………….…………….13
The main objective of this easy is to research and explain the concepts of total reward systems in details and provide an analysis of the link between total rewards system and different theories of motivation. It also focuses on the evaluation of the value of using Reward system within employment sectors (Information Technology and Recruitment & HR companies). This analysis will have various contributions to the business world experiencing stiff competition. The discussion shows that organizations undoubtedly benefit from total reward systems. Thus, employers must be ready to establish and take a step further to implement reward framework as a strategic to for attraction and retention of employee in business sectors.
The Total Rewards setting is going through prompt transformation as businesses are integrating employee value plan with recognition and rewards. In the present day, optimizing total rewards is of ultimate priority for businesses as they seek out to design innovative strategies to tactics to attract, motivate, maintain and absorb employees while incorporating every aspect of total reward systems comprehensively. In this standpoint, we take a look at different reward involvements by organizations in these aspects; training and career development, benefits, rewards, performance and recognition, and work-life experience. To achieve desired objectives, reward systems have to be strongly aligned with managerial strategies. Many types of recognition and rewards have upfront cost associated with them, such as gift certificates, cash bonuses and stock rewards. Other types of recognition and rewards may be less substantial but still very efficient.
Concepts of Total Rewards
In order to survive and succeed in the current competitive business setting,
(SHRM, 2017) argue that organizations should become more strategic. Operational and unit strategies have to be aligned with the overall organization strategy to improve effectiveness in the organization. As HR respond to total rewards strategies, organizations are beginning to comprehend that human capital resources can be used as a competitive advantage (Resource Management Inc., 2016). HR experts accredit an organization’s achievement to the efficiency of its employees, thus defining the fundamental objective of HR management as capitalizing on labour force efficiency. In this regard, strategic reward systems are significant to ensuring enhanced organizational performance and desired required employee behaviour (SHRM, 2017).
As argued by Armstrong, Brown & Reilly (2010), employees should be rewarded and compensated for the time utilized and hard work they put into labour. Total reward strategy involves the invention and execution of an impartial reward system that align with the strategic objectives of the organization. Total reward system is a type of strategic HR management tool that is utilized to reward and compensate committed workforce in an organization (Van Rooy, 2010). The system functions on two major ideologies; the finest practice advocates argument and the finest opinion. Basically, the goals of total reward systems are; attract and maintain talented employees, enhance performance and encourage business culture. According to Armstrong, Brown & Reilly (2010) rewards and compensation can be either intrinsic or extrinsic.
For a total reward system to be operational, Chun & Evans (2013) argue that the integration of reward tools is contained in the rewards structure. This structure could be a simple incorporation of reward tools for the entire business or it could be modified for various groups or employees in the organization as they are motivated by distinct motives. Total reward systems accounts for rewards that consists of both variable and fixed rewards. The integration of these kinds of rewards often attracts and retains talented employees without allowing unnecessary remuneration inequalities. Rewards strategy offer employee services and benefits in order to provide security required to their personal commitments (Resource Management Inc., 2016).
Total rewards also involve performance recognition (Willies & Watson, 2012). In order to recognize employees and individuals who undoubtedly make a difference to potential customers in the organization, employers present a wide diversity of formal and reinforcement for informal reward initiatives. This reward element often reinforces crucial values of the organizations such as teamwork, commitment, high performance, integrity and responsiveness. On the other hand, Van Rooy (2010) added that the total rewards provide base pay programs that present the arrangement and pay plans for the organization to attract, retain and support the development of individual skills.
The pay plan enables an organization to be competitive with the median of the major market both internationally and locally (Armstrong, Brown & Reilly, 2010). Pay rise are anchored in both growth of roles and abilities in the organization. Besides satisfying employees, total rewards ensure organizational cost effectiveness. Total rewards basically refer to fully realizing both organizational and employees’ needs, then targeting and apportioning rewards correspondingly. Although the elements of total reward have always existed in the business environment, they have been assumed and thus not aggressively governed. Under a total reward system, every aspect of work/life experience is identified and eminence is given o both remuneration and less tangible remunerations (Chun & Evans, 2013).
Total Rewards and Motivation Theories
Motivation enforces the outcome of the employees such as performance, efficiency and persistence. In addition, motivated individuals appear to be more self-esteemed and more independent-oriented relative to less motivated individuals (Resource Management Inc., 2016). Various studies shows that individuals take more roles and responsibilities when offered opportunities to develop. Motivated individuals are occupied and busy with their jobs and they might be more engaged in the work of their co-workers when compare with less motivated employees. For this reason, it is evident there is a clear link between total rewards and academic theories of motivation. Effective reward strategy increases employee efficiency and enhances their motivation all which results to enhanced business performance. According to Van Rooy (2010) there are various theories of motivation that link to aspects of total rewards.
Based on expectancy theory, he labelled his perceptions in three different assumptions; expectancy which assess whether an individual believes that hard work will lead to success; instrumentality which consider the level to which an individual believes that working is relative to successive results; and lastly the perception valence- the expected satisfaction as a result of the results. In summary, training and development can be applied to influence expectancy perceptions. Employees appreciate and embrace this training reward and feel that they are compensated (Syed & Kramar, 2017). On the other hand, showing workers that their work is rewarded will undoubtedly increase instrumentality idea. Thus, pay and other compensations to good performance using merit pay and bonuses is the initial step in enhancing instrumentality (Compensation Insights, 2017). However, high performers are highly awarded thus enhanced motivation.
According to expectancy theory, the perception of valence involves employers finding what the workers value (Syed & Kramar, 2017). Individuals are more expected to be highly motivated if they get rewarded for being attractive and presentable. Effective rewards tend to be impartial and satisfy different individuals’ varying needs. Therefore, ensuring enhanced valence for an organization involves getting to understand employees better. Lastly, providing employees with an opportunity to select between several rewards might be a good idea to enhance valence (Armstrong, Brown & Reilly, 2010).
Reinforcement theory is another theory that link with total rewards and it explains various intrusions to adjust individual behaviour (Boudreau, Jesuthasan, Creenlman, 2015). Among the intrusions are the methods of enhancing the incidence of desired behaviours and the strategies of moderating the incidences of unwanted behaviours. In summary, reinforcement theory involves rewarding individuals with desirable behaviours. On this account, Glowa et al (2016) claim that organizations plays a critical role in making employees with undesirable behaviours to change their habits to avoid demotion and also to inc...
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