Essay Strategic Human Resource Management Assignment
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Added on 2020-06-03
Essay Strategic Human Resource Management Assignment
Added on 2020-06-03
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AJStrategic Humanresourcemanagement Essay
ASSIGNMENT – 1 Management in any association always surrounds by the issue of furthering the objectivesof organization by workers performance. In one hand, there are differences in the levels ofperformance as they have different skills and abilities, on the other hand, diversified theoriesrelated to money (Andersen, 2007). Thus, the current essay will through light and examine theissue of performance based pay acting as a motivational tool to achieve the desiredorganizational performance. Here, this essay will study how individual performance related payimpacts the motivation level of the workers and thereby, achievement of the goals of the firm. Inrecent times, employees are increasingly seeking towards achieving linked pay to performance(Armstrong, 2005). Workers are nowadays highly attracted towards the job which offersperformance related pay (PRP). Furthermore, they also perform better as to earn maximumamount of revenue. Many literatures as well as academics related to PRP throws light on its roleas an incentive system.Particularly, in the private sector a discernable trend has been seen in regards with thelinking of rewards to performance of the employees. In simple terms we can say that thecompensation is tied with the act (Andersen and Pallesen, 2008). Governments are alsoencouraging this incentive system in many developed economies. Moreover, today’s societytakes into consideration compensation as a measure of justice and equity and therefore, it is rightto say “equal work for equal pay”. It is also the reflection of public turmoil againstdiscrimination of any type distribution of income (Baruch, Wheeler and Zhao, 2004). However, the Human resource managers of the organization consider compensation fromtwo perspectives, one as an expense and second as motivational strategies. If any firm employsright potential to influence the attitude and behavior of employees towards work than, it can betreated as a competitive edge (Beardwell and Holden, 1995.). There are many contextual factorsthat affects the performance based pay such as adequate rewards, geographic proximity, highlevel of trust, good performance appraisals and last but not the least level of professionalism.Talking about the research in the financial and regulatory sectors, among others, it is found thatPRP is usually perceived as a divisive (Benett, 1994). Furthermore, in the education sector theimpact of this incentive system on employee’s attitude was deleterious. Taking the example of manufacturing company in Ghana, a research was undertaken bythe human resource department of the firm in order to study the impact of PRP on employee’s1
performance and achievement of organizational objectives. Managers and non-managers wereprovided with the details of the new incentive system. After a month, it was revealed that the useof performance related pay was quite impartial as well as motivating. Additional, there were noadverse effects on the team work (Chia, 1998). It was also found that through this system, theinterdependency of the workers has drastically reduced. Hence, we can evaluate that individualperformance is very significant and should be reflected in the compensation package ofindividual. It might not increase the productivity; nevertheless it can keep employees satisfied.Individual performance related pay (IPRP) is fabricated on the grounds that reward helpsin fostering the right behavior and money is considered as a powerful incentive which can affectthe level of efforts being exerted by the workers (Condrey and Brudney, 1992). There are manytheorists who are on the belief that money can act as an objective in itself. Further, it can betreated as a symbol of internal recognition and external status. However, there are many whorevealed that early supporters of IPRP were botched to appreciate the intricacies of the wideremployment relationship (Hutchings and Murray, 2002). Need theory established by the Maslowand Herzberg also lay emphasis on the intrinsic aspects of the job. It also argues that people canachieve greater level of satisfaction from work factors like recognition, responsibility andachievement (Daley, 1987). Other critics of performance based pay restraints that such type ofincentive system are intimidating and might give birth to a wrong type of behavior like deviatingtowards individual effort as the expense of team working.Is IPRP is alive and well? There is a famous proclamation of Mark Twains that “reports of my death are greatlyexaggerated” can be applied to IPRP (Deci, 2000). This incentive scheme was primarily hailed asthe solution for motivating the workers and encouraging them to achieve high level ofproductivity. But subsequently it has suffered a reaction almost a decade later when it was quitedeceptive that it might not live up to expectations. According to Armstrong, “there has been acriticism against the performance based pay in the post- entrepreneurial 1990’s. The first-generation schemes were not living up to expectations and delivering the desired results whichwere introduced in the year 1980’s (Deming, 1996). Many researches and studies wereundertaken but all failed to exhibit the causal relationship amid the performance, pay andproductivity (Deutsch, 1985). However, as per the Brown and Armstrong, “IRPR is neither deadnor dying”, the spread in the incidence has undeniably slowed down, but it is quite enduring and2
will be applied and nurture. Moreover, the practical problems related to its implementation andoperations are well documented and recognized (Dowling and Richardson, 1997) Individual performance related pay (IPRP) and continuous challengesIPRP, an extrinsic reward that usually help in motivating the workers for efficientperformance is a real matter of dispute. Usually, it has been appealed that monetary rewards havevery short time period in order to motivate the workers (Fernie and Metcalf, 1995). Hence,extrinsic reward should be relied with the overall objective of the organization, even if they canimpact the performance. Through this, performance pay will not be consistent only with the costreduction strategy, but will underpin a motivational system wherein intrinsic rewards likerecognition, training, employee involvement etc. exist (Dun-lcavy and Hood, 1994). There aremany factors through which performance related pay fails and there are some problems andissues which are faced by the workers that flows from circumstances are as follows:Insufficient criteria – IPRP fails generally because of the insufficient criteria provided inorder to measure the performance. Further the principles that are not accepted,communicated and understood easily also lead to fail in such a scheme (Folger andKonovsky, 1989). Thus, performance related pay should be negotiated.Inappropriate appraisal system – If the performance appraisal system is inappropriate orin clear terms where the objectives of the appraisal system does not match with the goalsof the reward system (Hansen, Smith and Hansen, 2002). In fact, in order to identify theperformance based pay, normal appraisal system should not be used. Feedbacks – Regular feedbacks on the performance are necessary, in their absence IPRPfails. Organizational objective – The reward system implemented is not appropriate so as toaccomplish the organizational objectives.Knowledge workers – Another difficulty with the individual performance based pay isthat it is very tough to measure (Harris, 2001). In some of the organizations such as sales,it is quite easy to measure through the revenue of the sales and quotas. But it becomestedious to measure the performance level of a teacher and a doctor. At times, theenactment becomes difficult to evaluate and thereby, one cannot have fair access(Condrey and Brudney, 1992). This in turn leads to dissatisfaction and workers sense afeeling of inequity in the workplace.3
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