Total Reward Management: Impact on Employee Performance

This assignment delves into the critical area of Total Reward Management, focusing on its influence on employee performance. It defines total reward as a comprehensive approach encompassing compensation, benefits, development opportunities, and work environment. The analysis highlights how effective total reward strategies can enhance motivation, engagement, and productivity among employees, ultimately contributing to organizational success. The assignment also discusses the challenges associated with implementing successful total reward programs.

Human Resource
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Total Reward System and its link with academic theories of motivation...............................1
2. Evaluate the effectiveness of using Total Reward systems across two.......................................4
different employment sectors...........................................................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
In business process, human resource management is the process of recruitment and
selection of staff members for vacant positions. After recruitment and selection of the
employees, proper training is being provided and orientation is done so that performance level
can be increased in an effective manner. Maintaining relations with everyone including
employees, trade union and uplifting working environment according to the laws is another
major factor present in human resource management. It is highly important and present in every
organisation due to crucial factors like performance, compensation, safety, training and others.
Company chosen for this assignment is Marks and Spencer which was established in 1884. In
this essay, crucial elements like total reward system and its linkage to academic theories will be
briefed (Crook and et. al., 2011). Apart from that, evaluation of effectiveness in using total
reward system between two various employment sector.
1. Total Reward System and its link with academic theories of motivation
Total reward system is the process in which rewards are offered to employees who has
great working performance and they are given rewards in the form of monetary and non
monetary terms. Monetary terms can be said as rewards like in money or something valuable
whereas non monetary terms is something which is not related to money and it can be said as
intangible like promotion, increment in salary and many more. In simple words, it can be said
that tool and technique which is present to an employer for attracting, motivation and retain
employees. For an employee or candidate who are into employment sector for the notion of total
rewards including high value for employment relationship. Its importance can be determined by
its advantage as it constitutes all the things which a business needs to attract staff members like
salary, bonuses and incentive pay along with employee’s growth opportunities like personal and
professional development (Ployhart and Moliterno, 2011). Total reward system consists of four
elements which are employee retention, employee performance, controllable expenses and
program administration. In employee retention, whenever employee joins a firm on total reward
basis system and thus employees are told about things they will getting like bonuses, pay raises,
vacations or sick leaves. In short, incentives are being provided to employees on the basis of
their performance. This increases communication skills especially in small business and thus,
comfortable environment can be created between managers and employees. In employee
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performance, direct incentives are being given to the employees. These incentives come up with
some terms and conditions. Certain scales are set up and performance of employees is measured
on that basis and thus incentive are produced. If an employee is not able to produce more
effective work and incentives then special training and development sessions are being organised
so that new set of skills can be developed and thus can improve knowledge criteria. In
controllable expenses, long term and scope of total rewards allows a small scale business to
create accurate estimates of money which has been spent on the employee during the tenure of
his\her working (Gruman and Saks, 2011).
There are various components of total rewards by which managers can retain high performance
level which can create effective productivity and profitability. First one is compensation in which
employees are secured as if anything goes wrong then apart from their salary company will bear
the monetary charges and will compensate the employee for the loss occurred. Another way of
compensation is that apart from salary short and long term incentive payment can be done in
order to attract and motivate employees whose performance level is high and on the top as these
will give morale boost and and enhance confidence level. Another component is recognisance
which has advantage and drawback as well (Glick, Stein and Edelson, 2011). In this component
employees need to feel that their hard work should be recognised by authorities and thus
appreciation should be given so that employee can be motivated and thus can show high level
performance but if this thing is not done in an organisation employee might get demotivated and
performance level can be reduced. Third component is benefits which needs to be provided top
existing and freshers who have joined the organisation in recent. This will give boost to the
performance level of an employee. Fourthly, major component is life balance in which an
employee needs to be more flexible as possible to accommodate for employees who may have
irregular schedules due to demands of family. Fifth and last component is development which is
the most important as development is highly required so that interest should be remained in the
job specification of employee and they wont leave the job in short span of time (Sanders and
Frenkel, 2011).
Motivational theory was firstly coined by Abraham Maslow in 1943. Motivational theory
basically works on the motivation part. It has highly focused on the needs of the employees
which should be met in order to achieve high level of needs (Helmreich and Merritt, 2017). This
hierarchy is made up of five levels which are physiological, safety, belonging, esteem and self
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actualisation. In Physiological factor, needs must be met in order to survive such as food water
and shelter. Second one is safety in which components like financial security and health are
being measured. Thirdly, there is basic need of love through friendship, relationships and most
essential is family. Fourthly is respect which is must for every person so that it can provide
motivational. In last, fifth one which is self actualisation in which achievement of the desires
(Fulton and et. al., 2011).
(Source: Motivational Theory, 2016)
This all can link to the total reward system because motivational theory and total reward system
works for single aim and this providing motivation to the employee so that efficiency which
company expects from the employee can be extracted through various ways. An individual's
morale is most important factor for M&S because if the morale and confidence level are low then
productivity will be reduced which will directly affect company. Thus it can be said that total
reward system is much linked to the academic theory of motivation and both works to attain
aims and objectives of business in effective and efficient manner.
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Illustration 1: Maslow's Theory

(Source: Total Reward System, 2017)
2. Evaluate the effectiveness of using Total Reward systems across two
different employment sectors
In today's modern scenario, every business process has adopted this system of rewarding
employees according to their respective performance level because this provides motivation into
the employees and gives confidence to staff member so that high performance which is expected
by both organisation M&S and Hotel Hilton. Both these organisation supports rewarding system
to make employees work for long period of time and their tenure should be effective and
satisfactory level. M&S known as Marks and Spencer was established in 1884 by two brothers
and till now they have more then 1000 retail stores all over the world in which approx 615 stores
sells food products (Clark and et. al., 2016). M&S has several sectors in which they sell their
product like food, clothes and other small sectors. In 2016, their turnover was approx 180
million. M&S highly promote the total rewards system as their employees work in every sector
and every country they have established in and there are some certain reports that M&S
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Illustration 2: Total Reward Management

employees are not much dedicated towards achievement of task due to various factors like low
salary, bonus are given rarely and not much growth. So this lead to employees leaving the
companies and thus it affect productivity and cost of company. So to minimise this, company
introduced total reward system in which they made some scale and standards on which
employee's performance is being measured and thus according to it incentives are produced and
another way is doing overtime which came along with total reward system. It is highly effective
in Marks and Spencer as now employees are more dedicated towards their work and thus in
results customer satisfaction is improving and ultimately productivity level of M&S. Moreover,
advantage of reward system is that company need not to apply cost on training and development
because now employees are sticking with company and just not only sticking but also showing
dedication towards their respective work so that company can achieve their aims and objectives.
Another effect of reward system is that effective communication and cooperation skills has been
established which in turn is increasing comfort level within organisational environment and thus
goals are achieved in ease manner (Batt and Colvin, 2011).
Another company which is taken is Hotel Hilton which was established by Conrad
Hilton. This company is a global brand in which full service hotels and resorts with flagship of
Hilton. In 2017, current scenario it has around 570 hotels and resorts properties in 85 countries
and territories across six continents. Main focus of Hilton hotel is to provide both business and
leisure services to customers in major countries and major cities and their location are basically
near big landmarks like airports, convention centres, popular vacations destinations. Hotel Hilton
is basically about providing hospitality services to customers. Their productivity and profitability
directly depends on the satisfaction level of customers which can be only given by their
employees who are representing hotel and attending customers. So it highly essential that
employees should be happy so that customers can get effective services and goodwill can be
increased and thus markets share can be gained. To make staff members work in effective
manner Hilton Authorities have appointed various methods through they can be motivated and
can perform on the expected platform. Major method which has been applied in the organisation
environment is the reward system management and the aim behind applying this method is
motivation level of employees can be improved because now-er days feedback which they are
receiving across the globe is not up-to the mark and thus it affecting their reputation in
marketplace in negative manner (Objectives and Importance of Human Resource Management,
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2017). So to resolve and avoid in future, rewards system has been introduced. Reward system
has components which are bonus on occasions, incentives and overtime. So basically these
factors assists system to work. Fore example: If a customer gives feedback in 5 stars to the
employee who is serving them and this thing is repeated 5 times then certain amount will be
added into their salary as incentives. So by this example it is clear that reward system has
motivated much to the employees an has enabled organisation to be more productive and thus
achieve the goals and objectives in efficient and effective manner.
Thus it can be said from above statement that by using total reward system both organisations
has developed their employment sector has achieved satisfactory level into their respective
sectors.
CONCLUSION
From the above mentioned report, it has been concluded that human resource department
is the most essential apart for every business organisation. It helps managers to manage
workforce diversity in an effective because if employees will be well managed and coordinated
then any firm can easily achieve its goals and objectives in a certain time period. Under this
report there is a discussion upon important of total reward system in a business organisation. The
concept is adopted by firms in order attain and employees for long time of span. The reward
strategy refers to invest in workforce so as to get higher level of performance. Total reward
system is an intermixture of various components, i.e. compensation benefits, work life balance,
training and development. Managers have to provide various rewards and voluntary benefits in
order to improve employees' efficiency. It also helps a firm to achieve its goals and objectives.
The core concept of total reward involves all these essential things which are used by an
employers in order to attain, retain as well as motivate employees so as to get better future
results.
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REFERENCES
Books and Journal
Crook, T. R. and et. al., 2011. Does human capital matter? A meta-analysis of the relationship
between human capital and firm performance.
Ployhart, R. E. and Moliterno, T. P., 2011. Emergence of the human capital resource: A
multilevel model. Academy of Management Review. 36(1). pp.127-150.
Gruman, J. A. and Saks, A. M., 2011. Performance management and employee engagement.
Human Resource Management Review. 21(2). pp.123-136.
Glick, P., Stein, B. A. and Edelson, N. A., 2011. Scanning the conservation horizon: a guide to
climate change vulnerability assessment. Washington, DC: National Wildlife
Federation. 168 p.
Sanders, K. and Frenkel, S., 2011. HR-line management relations: characteristics and effects.
The International Journal of Human Resource Management. 22(8). pp.1611-1617.
Helmreich, R. L. and Merritt, A. C., 2017, November. 11 Safety and error management: The role
of crew resource management. In Aviation Resource Management: Proceedings of the
Fourth Australian Aviation Psychology Symposium: v. 1: Proceedings of the Fourth
Australian Aviation Psychology Symposium. Routledge.
Fulton, E. A. and et. al., 2011. Human behaviour: the key source of uncertainty in fisheries
management. Fish and Fisheries. 12(1). pp.2-17.
Clark, W. C. and et. al., 2016. Boundary work for sustainable development: natural resource
management at the Consultative Group on International Agricultural Research
(CGIAR). Proceedings of the National Academy of Sciences. 113(17). pp.4615-4622.
Batt, R. and Colvin, A. J., 2011. An employment systems approach to turnover: Human
resources practices, quits, dismissals, and performance. Academy of management
Journal. 54(4). pp.695-717.
Online
Objectives and Importance of Human Resource Management, 2017. [Online]. Available through:
<http://www.yourarticlelibrary.com/hrm/objectives-and-importance-of-human-resource-
management/28000>. [Accessed on 9th November 2017].
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