-50%
Solution
1.1 Reward
CIPD (2023) defines Rewards in organisations refer to any form of compensation or recognition provided to employees in exchange for their contributions. Rewards motivate desired behaviors and improve attraction, retention, and engagement of top talent. They can be financial such as salaries, bonuses, or commissions, or non-financial like praise, opportunities for growth, or additional responsibilities.
Principles of rewards
Transparency
A transparent reward system communicates all aspects of the incentives to employees. According to Devon (2023), this includes detailing the specific criteria or metrics by which employees will be evaluated for rewards. For example, explicitly outlining expectations for performance levels, sales targets, work quality standards, etc. that are tied to various bonuses or promotions. Transparency also means sharing how the reward amounts or titles are determined based on meeting those criteria. For instance, disclosing the formula used to calculate incentive pay or commission. When employees understand upfront what they need to achieve for different rewards, it eliminates confusion. They can properly focus their efforts on aligning their work to the published metrics. Transparency builds accountability on both sides and trusts that employees are being assessed based on predetermined goals rather than arbitrary judgments (MacGuire, 2023).
Fairness
A fair system evaluates and rewards all employees in an equitable and unbiased manner based on the same published expectations and metrics as evidenced by Wales (2024). It acknowledges equivalent efforts and results regardless of one’s attributes. For example, implementing consistent processes to appraise different employees tasked with similar work roles and responsibilities, while disregarding gender, age, race, or other unrelated characteristics. Additionally, a fair system provides proportionate and competitive rewards relative to peers in the same or similar circumstances. Fair treatment ensures compensation accurately reflects individual merit and contribution.
Importance of culture and performance management on rewards
Culture- a Company’s culture represents its core identity and priorities. According to Benify (2023), by tying rewards to demonstrated cultural attributes and competencies, the reward system incentivizes building and sustaining the desired culture. This strengthens employee alignment with the organization’s vision and values through their daily contributions.
Performance Management-Regular performance reviews provide a transparent, consistent framework for evaluating employee contributions and quality of work. Abdul (2017) point out that linking rewards directly to performance management ensures compensation corresponds proportionately to individual merit and progress on goals. This fosters a culture of accountability, motivating superior performance.
1.2 Implementation of policy initiatives and practices
Policy implementation is taking a policy from paper to action by developing strategies, assigning resources and taking steps to accomplish policy goals within an organisation. The following are key steps;
- Consultation
The consultation stage is vital for gaining early feedback from stakeholders. According to education.sa.gov.au. (2022), this allows leadership to understand all perspectives before finalizing the policy, helping identify any issues or unintended impacts.
- Planning
During planning, feedback from consultation is evaluated to refine the policy details. Training and communication strategies are also developed to effectively educate all impacted groups on the requirements.
- Rollout
The rollout stage involves broadly announcing and notifying employees about coming changes through multiple communication channels. Training then helps ensure comprehension and addresses any lingering questions.
- Trial Period
The trial period is when the live policy is tested in real world application for a set timeframe. Close monitoring allows assessing actual results and identifying any adjustments needed before full implementation.
- Review
All collected data is analysed during the review stage to evaluate if objectives are being achieved. Governance is also established for ongoing compliance. Regular audits help ensure continued strategic alignment over time amid changing conditions (Khamneian, 2023).
Best Practices
Best practices for managing the policy implementation process and benefits for Home International considering different demographics include;
Thoroughly executing each stage of the implementation process is critical to achieving smooth adoption of new policies at Home International. Careful consultation, planning, rollout, trial and review will aid comprehension and buy-in across diverse global offices and manufacturing sites. Younger factory operatives aged 18-32 will particularly benefit from clear communication and training opportunities during rollout to address higher turnover. Meanwhile, engaging experienced office employees aged 48-68 through their stage of life enhances retention. Jones (2024) point out that adhering to best practices for policy management can help streamline compliance, cut costs and strengthen the business amid industry changes by ensuring diverse stakeholders are supported.
1.3 Impacts of People Performances on approach to rewards
People’s performance can positively impact Home International’s rewards approach. High performance shows employees are engaged and valuable. This could lead to rewards like bonuses, promotions, and raises to retain top talent (Criterion, 2024). For example, efficient factory workers who exceed production quotas could earn rewards or those who increase online sales through innovative marketing. However, performance can also negatively impact rewards. Poor performance signals issues that lower morale and productivity. For instance, inefficient factory processes or quality control issues could reduce profits and limit bonus pools.
Performance can also negatively impact rewards if not monitored properly. Subjective performance reviews risk bias and favoritism impacting rewards unfairly as evidenced by Felicity (2021). However, performance also provides opportunities to positively impact rewards through programs recognising improvements. Staff who enhance processes saving money or resolve recurring problems could receive special recognition awards.
Impacts of organisational performance on approach to rewards
Fatima (2021) point out that an organisation’s performance can positively impact rewards by allowing greater budget flexibility. Strong financial results provide more scope to reward employees through profit-sharing bonuses or generous pay rises. For example, increased online sales during the pandemic has boosted profits, enabling better rewards. Meeting sustainability targets is also rewarded as it increases positive press and customer loyalty. However, poor performance threatens rewards. Budget cuts may be needed if targets are missed, limiting reward budgets.
Organisational performance issues can negatively impact rewards by damaging staff morale (Vaid, 2021). Persistent factory delays may discourage retention bonuses aimed at experienced workers. Reward programs also risk lacking credibility if based on difficult-to-reach targets. However, addressing underperformance positively impacts rewards. Successful turnaround efforts inspiring staff commitment could be rewarded through recognition awards or special perks. Resolution of turnover problems might restart bonuses for all factories. By tracking key performance indicators like monthly sales figures, customer satisfaction ratings, and production quantities, Home International can confidently determine whether organisational goals are being met to appropriately influence its reward strategies.
1.4 Types of benefits offered by different organisations
Benefit 1: Performances Related Pay
Performance-related pay is a type of compensation linked to an employee’s success in meeting pre-set individual and/or company objectives and targets as evidenced by CIPD (2022). Organisation such as Google offers bonuses and stock options tied to overall company performance. Employees who help grow revenue and usage see direct financial rewards in their annual compensation (Google’s Equity Comp 2023). On the hand, LinkedIn links a percentage of employee pay to achievement of individual goals (LinkedIn, 2023). Staff receive a pay increase at year-end if they meet or exceed metrics in areas like sales numbers or new features implemented.
Similarities
Both Google and LinkedIn tie a portion of employee pay to performance, whether of the overall company or achievement of individual objectives. The goal is to directly reward and financially motivate staff through compensation that is linked to metrics in areas like increased revenue, usage, sales or implementations.
Differences
While Google’s performance-related pay is linked to overall company growth through bonuses and stock options, LinkedIn ties a percentage of employee salary to accomplishing set personal metrics. This allows Google to reward contributions to corporate success but LinkedIn can incentive achievement of individualised yearly targets.
Benefit 2: Profit sharing benefit
A profit-sharing benefit is a compensation program that provides employees a portion of company profits, rewarding all for collective success through increased pay or supplemental retirement payments. Google shares overall company profits annually with employees through generous bonuses even during less profitable years, allowing staff to directly benefit from the business’s performance (Bianchi, 2023). Also, Ford Motor Company awards employees a percentage of profits through a 401(k) matching program, distributing extra funds into retirement accounts when automotive financial goals are surpassed (Freds, 2019). This incentivises excellence.
Similarities
Both Google and Ford Motor Company provide profit-sharing benefits that reward employees financially when company goals are met. The profits are distributed either through bonuses tied directly to profits or contributions to retirement accounts, strengthening employee incentives and aligning interests with organsational success.
Differences
While Google shares profits annually through generous bonuses paid even in less profitable years, Ford awards profit sharing only when specific automotive financial targets are exceeded through 401k matching contributions. This provides Google staff with more consistent sharing but Ford focuses on exceeding defined performance goals.
1.5 Contributions of extrinsic and intrinsic rewards to improving employee contribution and sustained organisational performance
Extrinsic Rewards
Extrinsic rewards are external motivators such as money, recognition, and prizes that encourage employee performance as evidenced by Hajduk (2017).
Contributions-
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