EZDV 202: HRM Reward Systems Lecture One PDF

EZDV 202: HRM Reward Systems Lecture 1 Learning Outcomes By the end of the chapter students should be able to demonstrate the following: Discuss how organizational strategy influences the development and implementation of remuneration strategies. Evaluate how each stage of the busi...

EZDV 202: HRM Reward Systems Lecture 1 Learning Outcomes By the end of the chapter students should be able to demonstrate the following: Discuss how organizational strategy influences the development and implementation of remuneration strategies. Evaluate how each stage of the business life cycle impacts remuneration policies and practices. Recommend appropriate remuneration strategies for each stage of the business life cycle. Define total rewards and describe its components, including compensation, benefits, work-life balance, recognition, and development opportunities. Outline the steps involved in developing a remuneration strategy. Predict future trends in remuneration and how they may impact organizational practices. Assessment Info  Review Questions Name three organisation strategies, and give an example of how each works What key Rem activities would an organization be involved with in the “Maturity Stage”, of the business life cycle? Identify three components of a total rewards strategy Briefly explain the strategic management process as it relates to remuneration Mention two performance management trends  What do you think your degree will be worth when you graduate? How much do you want to earn upon leaving university? Consider the Which city would you like to work in? following… What will attract you to work in an organisation? Organisation strategy Organisation Strategy Operational excellence: a price/cost-based strategy that can include a combination of price, quality, ease of purchase, Organisations typically place primary focus on Customer intimacy: a one of three areas: solutions-based strategy Product/service leadership: an that focuses on creating innovation-based results for carefully strategy that focuses on selected customers by product development building bonds to meet and market exploitation, or exceed customer creating the best needs in order to build products, loyalty  Business life cycle Start up phase; new product development Less emphasis on transactional rewards (salary, benefits) Embryonic Stress on non-financial rewards Business life cycle has a significant Acquire market share; find new markets impact on the Remuneration Strategy Continue to emphasis on long term incentives adopted. Growth Catch up with salary and benefits Depending on where the organisation Become low-cost producer is on the curve, the remuneration Attention is given towards keeping salary and perks competitive strategy may be different. Mature Bonuses are orientated to productivity improvement Cost reduction phase Huge emphasis on benefits and salary Ageing Little attention give to long term, growth orientated incentives  Multi-dimensional construct of rewards Some elements of a reward system are described as follows: Policies- guidelines on managing rewards and Practices or systems- provide for financial and non-financial rewards and outcomes (for example, increases) Processes- concerned with assessing individual performance (performance management). Procedures- ensure that it operates efficiently and flexibly and provides value for money. Reward criteria- are the bases on which organisations determine and distribute rewards. Reward strategy- what the organisation intends to do in the longer term, Multi-dimensional construct of rewards The reward strategy informs all employees of the direction the organisation wishes to take on reward management, as well as the types of reward that are offered to support accomplishment of the organisational strategy. The strategy provides a well reasoned and actionable framework for developing reward policies, practices and processes. It further differentiates the components of total rewards and is based on the needs and values of the organisation and its employees. Multi- dimensional construct of rewards Multi-dimensional construct of rewards Strategic process Vision Vision Mission Mission Strategic objectives Strategic objectivesFunctional / operational strategy Operational Strategy HR strategy HR strategy Reward strategy Strategic process Vision Mission Strategic objectives Functional / operational strategy HR strategy Reward strategy Strategic process Vision o Analyzing- internal and external environment, existing reward arrangements, the needs of the Mission business o Understanding the individual needs and preferences of employees Strategic objectives o Formulating a reward philosophy o Creating a ‘total package’ that ensures that financial and /non-financial rewards are brought Functional together operational strategy o Ensuring alignment with your HR strategy o Planning and delivering successful implementation- (consistency NB!) HR strategy Reward strategy  Key trends Vision Mission Many organisations want to know what is Strategic objectives happening nationally and sometimes internationally as input Functional / operational to the strategy and strategy policy process. HR strategy Reward strategy Summary  Review Questions Name three organisation strategies, and give an example of how each works What key Rem activities would an organization be involved with in the “Maturity Stage”, of the business life cycle? Identify three components of a total rewards strategy Briefly explain the strategic management process as it relates to remuneration Mention two performance management trends Next week Chapter 2-3: Job roles and Competence- Job Evaluation