Managing Human Resources

As we know human resources are the most important resources of any organization. It is vital to manage those human resources in order to grow and progress. If an organization loses human resources, it will eventually lose everything. That is why, it is necessary to manage human resources and for that purpose different strategies are adopted.

Managing human resources need active participation of HR department and certain reward and other strategies. These things gives extra benefits to the employees and they then prefer the company which are offering them more benefits then the others.

Evaluate what are the key elements of a total reward strategy considering, alignment with current business goals, future business intent as well as considerations to overall costs

Total reward strategy

Either small or larger scale business, both need best talent to available to grow and succeed in the market. In order to attract and the best talent, it is necessary that the organization should offer something extra to them. It is the only way those talented people will come to your organization and you can hire them with a little extra benefit offered to them. The next important task is to retain those talented people who are asset to your organization and contributing in its progress and growth, then again total reward strategy comes into action and help us out to retain those talented employees of ours.

Strategic reward takes a long term approach to how an organisation’s reward policies and practices can balance and support the needs of both the organisation and its employees. The concept of total reward covers all aspects of work that people value, both tangible and intangible, and may form part of an overall reward strategy (Cotton, 2021). It means that reward strategy is a strategy that covers almost all needs of the organization and it employees. It plays on both side of the pavilion. It gives benefits to the employees and in return employees work for the company and make money for the company. In the end, both the parties get something out of it.

Following are the reward strategies to fucus more:

Performance and recognition

Performance based bonus can help to enhance employee’s retention and also helps to improve the quality of their work. When an employee works really good, he/she deserves to be rewarded and when companies takes care of their wishes it makes them happy and they work for the company with more loyalty and passion.

On the other hand, there is recognition reward strategy. It more powerful then performance reward strategy. As money and bonus can bring one time joy but recognition among co workers and colleagues can have a longer effect on the work and on the other workers as well. Most of the employees needs recognition and when they get it directly from the manager or the authorities they think themselves as an asset for the company and they work even harder for the growth of the company.

41% of companies that use peer to peer recognition have seen positive increases in customer satisfaction and Companies with recognition programs that are highly effective at improving employee engagement have 31% lower voluntary turnover (King, 2021). These facts and figures shows that the companies that use performance and recognition as their reward strategy shows high level of positive customer satisfaction rate. The companies that are using recognition programs are highly good at employment engagement.

Work/life balance

Work/life balance is crucial for the employees working in the indoor business set ups. They need to have balance in their work and their out side life. If they forced to spend extra time at the work, their social and family life will eventually get interrupted due to this bad routine and they will have to face the consequences in the long run. That is why, it is essential for the companies to give necessary room to the employees to maintain their work and life balance.

There is another aspect to look at this problem. Family and social life has a huge impact on our emotions and psychology and so do the business and workplace environment. If one is not complementing the other, then surely there will be problems. If a company wants to retain its loyal and hardworking employees then it must invest on their work/life balance. Otherwise, they will taken away by the negative energies and it will be the company that will suffer in the end.

We need to accept on more thing that there is no perfect work/life balance. There is only struggle to maintain a balance between both of these things. Company as well as the employees can give their best to maintain this balance but they can not achieve 100%. It is a hard truth we all must acknowledge, otherwise, we will lost the path and it will not be good for us.

Organizational culture

The key to a successful organization is to have a culture based on a strongly held and widely shared set of beliefs and norms  that are supported by proper strategy and strong structure. There is no doubt that talented employees prefers those organization with best organizational culture because it is easy to work in such a culture. It is not always about money, there are people who believes in mental peace and they prefer to have a peaceful organizational culture. Good organizational culture improves organization’s over all performance leading to increased productivity and more profits.

The organizational culture in which employees feel comfortable are considered the best cultures in the corporate world. The size of the organization does not matter at all. large organizations such as Amazon is said to have a bad organizational culture within the company and many small organizations have better organizational cultures and their  employees feel comfortable working in those environment and the most interesting part is that the become loyal to those companies only because of the culture they are getting in there.

Employee development and career opportunities

Employee development — often referred to as professional development — is the process during which employees, with the support of their employer, go through professional training to improve their skills and grow their knowledge (Heinz, 2021). On the employees is the best of the investments. The big and sensible organizations invest on their employee’s training because they know that employees are the true asset of their organization and their skills matters the most to the organization.

It is important because the world is evolving. The change is the only constant in this world. In order to meet that change and keep the pace up with the change, it is necessary for the employees to get necessary training to enhance their skills. Everyday a new language is being introduced in the IT and Software field, that is why, training is necessary for the employees related to the IT sector that they learn these new languages that can help them to develop more efficient software and in order to do so their training is a must.

Career opportunities comes after employees development. It emphasis on the career goals of the employees. Everyone wants to progress in their life as well as in their career and this is what employees of any organization wants too. But most of the time they do not have opportunities even if they have necessary skills and knowledge. In order to over come this problem, good organizations arrange career opportunities for their employees can give them chance to come forward and take part in the decision making body of the company. The strategy really encourages the employees can they work hard to come forward and wants to be recognized as good and hardworking employees so that they can have that change to get promoted.

It sometimes, aims to develop a single employee that the company and the authorities thinks is intelligent and hardworking and can contribute in the progress of the company. In this way, organizations use these two tactics as their reward strategy based on their present and future goals.

Business strategy

Strategic human resource management involves a future oriented process of developing and implementing HR programs that address and solve business problems and directly contribute to major long term business objectives (shrm.org). business strategy is a comprehensive plan that includes company’s future goals and it need human resource management to align its plan with it. Both the department working in collaboration with each other can really change the game for the company.

Business strategy basically is the set of actions or the decisions that management take or set to help the organization to achieve its future goals and objectives. For this purpose, every segments of the organization need to cooperate with the other one. The question arises that how it can be a reward strategy? The answer to this question is, when the organization achieves its goals, everyone get its benefits eventually. All they need is to cooperate with each other and work hard for the progress of the company.

Compare and contrast different types of total reward models and analyse the relative advantages and disadvantages of them for both employers and employees

Time rates

Time rates is the simplest and to the point payment system. People are paid according to the time the spend working. These can be hourly, weekly or monthly wages depending upon the organization and culture in organization is operating. It is extremely popular payment method till now, despite having so much talk about performance based payment systems and incentive schemes. Its popularity is because of the fact that it is simple system and it is easy to understand.

It favors the employer that such a system should be created that ends discrimination between employees. When the employers wants its employees works together they will provide them with such a competitive environment that will enhance the collaboration and it also leads to increased productivity. The most important thing is that the pay roll must be sufficient to fulfil the basic needs of employees. If it is not sufficient that it will demotivates the work force.

Advantages

1. It is a simple process
2. They reward experience
3. The calculation of wages is much easy
4. Lead to a stable workforce and workplace environment

Disadvantages

1. There are no incentives for working hard
2. Accusations of age discrimination
3. There is no incentive at the top of the scale

Individual payment by results (piecework)

The main ingredient of this is individualism. It is based on the rational belief that some people work harder than the other, so they deserve more. The difference in the pay would encourage them and draws a boundary line and it will also encourage others to worker harder to earn more. It is a clear criteria and there is strong relationship between hard work and earing.

The main advantages to the employer

1. More effort more earing
2. There is a strong emphasis to increase effort
3. Results in lower costs for employers

The main disadvantages are that

1. Less effort less earning
2. It can cost to much to maintain the balance
3. Compromised quality
4. It can cause in many disputes about pay rate and hour of work

Group incentives

This approach is based on individual payment system but it is adopted by those organizations that are no loners interested in the former system. It is used when company want to focus on teamwork or teamwork is needed to achieve the goals of the company. Workers work together in a group and try to achieve the desired results or meet the deadlines and if they achieve the goal then they are given the incentive.

In large organizations it would be very difficult to achieve goals and objectives if every employees focuses only on his/her promotion and incentive that is why they choose this approach to take everyone together. Furthermore, The size of the group may vary depending upon need and the nature of the task

Advantages

1. Employees value the team work
2. Employees see how they contribute to the whole organisation’s effectiveness.
3. Productivity may increase
4. It develops the interests of employees in the management of the company

Disadvantages

1. Failure of one will be the failure of whole team
2. It can create confusion in the mind of employees
3. It can be difficult to understand schemes in this process

Cafeteria Style or Flexible (Flex) Pay Reward Model

A definition provided by Stredwick and Ellis (1998), “it is a formalised system that permits individual employees to influence the make up of their pay and benefits package, so that they may select certain items and reject others to match their personal requirements.”

This model also provides flexible benefits to the employees. It gives scope to the decision of employees regarding their salary. It benefits employees in terms that it gives their emotions a voice and encourages them to speak in their own favour. The model is in the favour of employees.

It also allows employees to choose those benefits from the specific list that suits them. They can obtain those benefits. That is why, this model is called as “Cafeteria Style” or “Flex”. What can be more good for the employees to choose the benefits of their preference.

This model allows employees to select benefits within the pre defined limits. There is boundary that employees can not cross. Giving free hand to employees do not means that they can have what they want.

Cafeteria Style or Flexible (Flex) Pay Reward Model

The basic benefit for all the employees are same. The employees of the same grade will get the same salary and they will have the same pension contribution for all the employees of the same grade. The difference lies in other packages offered by the company. employees can choose the package of their interests and the one that suits their needs from the list and in doing so they are totally independent.

Tier 1 Benefits (Employee chooses 1)

1. Oyster Card: £1,500
2. Mileage up to 3,000 miles: £1,350
3. Contribution to car purchase: £1,250

Tier 2 Benefits (Employee chooses 1)

1. Private Medical Care: £750
2. Life Insurance: £600
3. Gym Membership: £480

Tier 3 Benefits (Employee chooses 1)

1. 5 days additional paid leave: £500
2. 100 hours Childcare Vouchers: £500
3. Staff Discount Vouchers: £400

There are some packages given above. Employees have the liberty to choose one package. They can choose the one that suits their needs. For example, if an employees needs to buy a car then he/she can choose tier 1 and company will assist him in purchasing car by giving him £1,250.

Advantages

The main advantage of this model is that it can fulfil the needs of a diverse work force. It has the ability to take care of the needs of all whatever their gender and their grade at the organization.

It assists employees to purchase the goods of their choice.

They can have medical insurance in case of health emergency.

It also offers life insurance to the employees of the company.

Disadvantages

It requires robust and active administration to make things happen and to control everything as well. Otherwise this model will bring problems of the company.

It can confuse employees to choose from the menu. The increased confusion can leads to frustration.

Examples of practice to demonstrate how and what type of total reward methodologies, tools and techniques are being used to suit the unique organizational environment

Both Apple and Amazon are big names and big brands. They are the leading companies in the world in their sector. Amazon is an e commerce giant and no one can match its achievements. On the other hand, Apple has made its name in technology and IT. MHR played an important role achieving the current position for both the companies. But they have different strategies when it comes to reward and recognition. Both have different approaches towards their employees needs and bonuses as well.

Apple

Apple believes especially in offering employee rewards for independent thinking. The company compensates its executives by giving them a bonus of 3 to 5 percent of salary. Last year according to media reports, Apple gave out restricted stock units to a majority of its more than 100,000 employees (Employee Benefits, 2019). It is the strategy Apple believes in. Actually, Apple is following the legacy of its CEO Steve Jobs. He believed in innovation and so do the Apple and still believing.

Apple also gives discounts on their products to its employees to boost its sales within its work force. It also motivates the employees that they can have the products of their company on discounts and it gives them a sense of belonging to that company. It adds to the positive organizational cultural value. Furthermore, it will look odd that an employee of the Apple working in the office having an Android phone in his/her hand.

Steve Jobs himself set when he gave his team their mission “to create a phone that people would love so much that they would never leave the house without it.”

‘I think what Apple gives the employee is the opportunity to be part of something really, really meaningful,’ says Joel, Vice President of Human Resources.

Amazon

Amazon believes in long term policies when it comes to rewarding their employees. They do not immediately give rewards to their employees. Amazon’s CEO Jeff Bezos set out his vision in the company’s first ever letter to shareholders, he said that we can not realize our potential as people or as a company until and unless we do not set the mode of our planning on long term.

Amazon also gives discounts to its employees on its products. They also get their usual benefits as well. But one thing is important to mention that is has been reported the organizational culture within the ware houses of Amazon is not good and employees suffer because of this. Company should take measure to improve the organizational culture and solve this problem.

Bezos explains his logic in the 1997 letter: “We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.”

Following their long term policy vision, Amazon offers stock to its employees rather then cash. And here is the twist, if an employees works for from one to five years in the company only then stocks can turn to rewards. It can be regarded as their retention policy or rather their retention tactic.

Amazon is offering skill development sessions for the employees. It is valid for those employees who have worked for the company for at least one year. The company is ready to pay 95% of the fee. Company is also not concerned about the relevancy of the courses to their organization.

References

Cotton, C., 2021. Strategic & Total Reward | Factsheets | CIPD. [online] CIPD. Available at: <https://www.cipd.co.uk/knowledge/strategy/reward/strategic total factsheet#7379> [Accessed 7 June 2021].

Employee Benefits. 2019. Employee Rewards: who would you rather work for – Amazon or Apple? Employee Benefits. [online] Available at: <https://employeebenefits.co.uk/employee rewards who would you rather work for amazon or apple/> [Accessed 7 June 2021].

Heinz, K., 2021. Employee Development: What It Is and Why It Matters. [online] Built In. Available at: <https://builtin.com/company culture/employee development> [Accessed 7 June 2021].

King, S., 2021. How Recognition and Rewards Impact Employee Engagement and Performance. [online] Growthforce.com. Available at: <https://www.growthforce.com/blog/how recognition and rewards impact employee engagement and performance> [Accessed 7 June 2021].