Strategic International HR Management PDF

Performance management Reward Management Reward management is concerned with the strategies, policies and processes required to ensure that the value of people and the contribution they make to achieving organizational, departmental and team goals is recognized and rewarded. Aims of Reward...

Performance management Reward Management Reward management is concerned with the strategies, policies and processes required to ensure that the value of people and the contribution they make to achieving organizational, departmental and team goals is recognized and rewarded. Aims of Reward Management reward people according to the value they create; align reward practices with business goals and with employee values and needs; reward the right things to convey the right message about what is important in terms of behaviours and outcomes; help to attract and retain the high-quality people the organization needs; motivate people and obtain their engagement and commitment; develop a high-performance culture. The Philosophy Reward management is based on a well-expressed philosophy – a set of beliefs and guiding principles that are consistent with the values of the organization and help to enact them. The philosophy recognizes that, if human resource management (HRM) is about investing in human capital from which a reasonable return is required, then it is proper to reward people differentially according to their contribution. Guiding principles Operating the reward system fairly, equitably Developing reward policies and principles that support the achievement of business goals; Rewarding people according to their contribution; Guiding principles Providing rewards which attract and retain people; Maintaining competitive rates of pay; Developing more responsibility for reward decisions to line managers Financial rewards base pay pay contingent on performance pay related to service financial recognition schemes benefits: pension, sick pay and health insurance Arguments against financial rewards will not result in sustained motivation; it cannot be assumed that money will motivate all people equally; can demotivate those that do not get financial rewards; may be against quality and team work Financial rewards and financial incentives Financial incentives aim to motivate people to achieve their objectives, improve their performance or enhance their competence or skills by focusing on specific targets and objectives. Financial rewards and financial incentives Financial rewards provide financial recognition to people for their achievements, they can serve as indirect motivators Contingent pay schemes Contingent pay is any form of financial reward that is added to the base pay or paid as a cash bonus and is related to performance, competence, contribution, skill or service. Performance related pay Increases to basic pay or bonuses are related to assessment to performance. Links rewards to objectives Focuses on output not quality. Appropriate for people who are likely to be motivated by money Competence related pay Pay increases are related to the level of competence Encourages competence development. Danger of paying for competences that will not be used. Appropriate where it may be inappropriate and hard to measure outputs Contribution-related pay Increases in pay or bonuses are related to inputs and outputs Rewards people not only for what they do but how they do it. It may be hard to measure contribution Skilled- based pay Increases related to acquisition of skills Encourages and rewards the acquisition of skills. Can be expensive when people are paid for skills they do not use. Service-related pay Pay is linked to time in the job rather than performance or competence It does not need to manage at all Fails to reward those who contribute more Non-financial rewards Job enrichment - giving workers more interesting, challenging and complex tasks ✓It gives workers the chance to test themselves and use their full range of ability ✓It is more motivating than job enlargement or job rotation Non financial rewards Job enlargement - giving workers more tasks to do of a similar nature or complexity ✓ It reduces the monotony or repetition ✓ It does not increase a person’s satisfaction or sense of achievement. Job rotation - having a wider variety of tasks to do ✓It does not increase the challenge of the job. Non-financial rewards Team working ✓ meets a worker’s social needs ✓leads to greater flexibility of production Empowerment - delegation Even if managers pass down authority to their subordinates, they are still responsible for the work that is done by them.