Total Reward System: Advantages, Disadvantages, and Examples

This assignment discusses the concept of total reward system and its five elements: recognition, work-life balance, professional development, benefits, and compensation. It explores the advantages and disadvantages of implementing this system, along with budget concerns. The internal and external factors that impact the total reward system are also discussed. The case study of Marks and Spencer is used to illustrate the practical application of the total reward system.

Managing
Human
Resources

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION ...............................................................................................................................3
REFRENCES...................................................................................................................................4

INTRODUCTION
Total reward system is considered as all efforts which an employer can adopting for
recruiting, retaining and motivating employees (Abbasi and Rana, 2012). This will include five
elements i.e. benefits, professional development, compensation, work life balance and
recognition. Organization selected for this assignment is Marks and Spencer which is a public
limited company operating in retail sector. It is founded by Michael Marks and Thomas Spencer
in year 1884 at London, United Kingdom. It is operating at the worldwide level. Topics include
in this report are overview, advantages, disadvantage, example, budget concern and internal and
external factors related to total reward system.
MAIN BODY
 Total reward system is defined as a efforts which are conducted by a company's
management in order to retain, recruit and motivate their employees. There are main five
elements of respective reward system i.e. recognition, work life balance, professional
development, benefits and compensation which help in retaining as well as motivating
employees effectively (What Are the Elements of a Total Rewards System?, 2019). This
will include both financial as well as non financial reward that motivate staffs to
accomplish their work effectively so that company attain their goal. In respect of Marks
and Spencer, by adopting this reward system they able to resolve their issues related to
downturn in productivity, customer satisfaction and profitability.
 Total reward system is one of the effective reward system as it help Marks and Spencer in
gaining various advantages such as it help management in enhancing employees
engagement at the workplace. Along with this, by adopting this reward system respective
company able to increase staff retention as well as it will also enhance performance of the
employees that directly lead increase in quality of work. This will also help in conducting
controllable expenses through which firm able to predict their expenses on each and
every employees (Holston and Kleiner, 2017). These are the main benefits or advantages
which are gain by Marks and Spencer by adopting total reward system.
 By adopting as well as implementing total reward system at Marks and Spencer,
management able to address specific motivating need of employees because it will help
in focusing both financial as well as non financial benefits. In respect of financial benefits
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it will also sun divided into two types i.e. directly which include finical motivational
needs like salary, bonuses and incentives. Another subfactor is indirect which are related
to benefits need like holiday, medical treatment, child care, insurance and so on.
Moreover it will also provide non financial motivational benefits which motivate
employees such as interesting work, challenges, recognition, responsibilities, competent,
safety and security and so on.
 Along with various benefits, there are numbers of risk or disadvantages which are
allocated with total reward system that may faced by Marks and Spencer when they
implement respective reward system at the workplace (Karami, Dolatabadi and
Rajaeepour, 2013). Such as it lag the market due to budget constraints, time consuming
method because it required evaluation of each and every person. Along with this it will
also have several other limitations like it enhance self focus situation and competition at
workplace because every person think about themselves and their work which also
impact on team work as well as company productivity and profitability.
 Budget is consider as procedure in which firm management develop a plan of expenses
according to their money. It is also known as spending plan which help in determine
management in understanding whether they have money or not and then accordingly they
will conduct their work. In respect of Marks and Spencer there are number of budget
factors which management need to consider such as, understand purpose of budget so that
plan can develop effectively. In addition to this firm also need to consider other factor
like number of employees, reward which can be given to them and so on.
 There are numbers of factors which impact on the total reward system of a company and
these factors can be internal as well as external. Internal factors are those which are
present within a company whereas external factors are those which impact working
practices externally (Shields and et. al., 2015). In respect of Marks and Spencer there are
several internal and external factors which impact on the total reward system. Such as
internal factors are employees need and expectation, pay, company profit, firm theoretical
foundation. Along with this external factors are labour market price, government rules
and regulations, supply and demand of labour market and so on.
 There are also various companies who are using total reward system successfully and
impressively at their workplace that help them in conducting work more effectively as
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well as retaining employees for long time. For example Nestle is also using total reward
system for recruiting, rewarding, motivating and retaining employees at workplace.
Along with this they are also using this as a technique of gaining competitive advantage
because it help in motivating employees that enhance their quality of work as well as
productivity (TOTAL REWARDS AT NESTLÉ: MORE THAN JUST A POLICY, 2019).
Moreover this will directly link to enhancement in customers satisfaction and increase in
competitive advantage at potential marketplace.
 There are numbers of key reasons of adopting total reward system at the workplace of
Marks and Spencer such as it will help in enhancing flexibility of both employers as well
as employees because through this method both of them feel motivated. Along with this,
it will also help respective company management in resolving issues related to employees
turnover because it improve recruitment and retention. Through total reward system firm
able to reduce its labour cost as well as cost of turnover and it will also help in enhancing
productivity of staffs (Tsede and Kutin, 2013). Through which Marks and Spencer can
generate more and more profit for gaining competitive advancement.
CONCLUSION
By evaluating above discussed point it can be summarise that total reward system is one
of the most effective reward techniques because it help a company in gaining numbers of
benefits like increase in productivity, flexibility, retention and so on. But it also have some
limitation which is essential to be consider before adopting total reward system at workplace
such as it is time taking process. Moreover there are some factors which impact on respective
reward techniques like government legislation, pay, expectation of staff and so on.
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REFRENCES
Books and journals
Abbasi, A.S. and Rana, A.H., 2012. Impact of Islamic work ethics, reward system and
organizational environment on citizenship behavior of employees. Science
International-Lahore. 24(4). pp.513-519.
Holston, C. and Kleiner, B., 2017. Excellence In Reward Systems. Global Education
Journal, 2017(1).
Karami, A., Dolatabadi, H.R. and Rajaeepour, S., 2013. Analyzing the effectiveness of reward
management system on employee performance through the mediating role of employee
motivation case study: Isfahan Regional Electric Company. International Journal of
Academic Research in Business and Social Sciences. 3(9). p.327.
Shields, J. and et. al., 2015. Managing employee performance & reward: Concepts, practices,
strategies. Cambridge University Press.
Tsede, O.A. and Kutin, E., 2013. Total reward concept: A key motivational tool for corporate
Ghana. Business and Economic Research. 3(2). p.173.
Online
What Are the Elements of a Total Rewards System?. 2019. [Online]. Available
through:<https://bizfluent.com/about-5484256-elements-total-rewards-system.html>.
TOTAL REWARDS AT NESTLÉ: MORE THAN JUST A POLICY. 2019. [Online]. Available
through:<file:///home/user/Downloads/total-rewards-at-nestle-more-than-just-a-policy-
europe-2013-mercer.pdf>.
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