Managing Human Resources: Definition, Theories, and Analysis of Total Rewards Models

This essay discusses the definition, theories, and analysis of total rewards models in managing human resources. It covers the advantages and disadvantages of each model, best practices, and approaches to reinforce higher levels of performance. The essay also includes an analysis of Tesco and Unilever regarding fairness and equality in their total reward system. Subject: Human Resource Management, Course Code: HRM101, College/University: Not mentioned.

Managing Human Resources

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Definition and theories................................................................................................................3
Theories, practices and approaches.............................................................................................6
High level of performance...........................................................................................................7
Analysis of Tesco regarding fairness and equality......................................................................8
Analysis of Unilever....................................................................................................................9
Reward system.............................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Managing human resource means to handle all the issues and problems within an
organisation. It is the responsibility of manager to solve issues of employees and manage all the
activities properly so that there will be no issue and it will be beneficial in growth of company
(Kerdpitak and Jermsittiparsert, 2020). Unilever is a public limited company founded in 1929. Its
headquarter is in London, England. It serves all over the world and provide products such as,
food, cleaning agents, ice cream, wellbeing vitamins. Tesco is a retail industry founded in the
year 1919 by Jack Cohen. It headquarters is in England, UK and serves Ireland, Hungary, Czech
Republic Slovakia. In essay, definition, theories and analysis of total rewards models, advantages
and disadvantages of each is discussed. Applicability of theory, best practices and approaches to
reinforce is described. Higher levels of performance with ever changing environment are
discussed. Further, critical analysis is being done regarding fairness and equality in organisation
total reward system is described.
MAIN BODY
Definition and theories
Total reward system refers to a system which is implemented by a business to motivate
employees. In every organisation it is important to give reward to employees so that they can
work efficiently and it helps in boosting confidence of members. It is the responsibility of
managers to evaluate performance of employees and make plans according to that. Training
should be provided to members so that they can understand what work is to be done and how to
do. Reward system helps in increasing efficiency of employees and boost their confidence
(Cascio, 2021). It will help in reducing absenteeism among workers and members will work
efficiently. It is duty of managers to measure performance of employees and take steps according
to that.
There are some benefits of reward system such as, it helps in motivating employees and
they feel engaged, improves relation between employer and employee, improve worker retention
and helps in boosting confidence. Reward system help in creating positive environment at the
workplace and increases employee engagement. This will reduce absenteeism and workers will
work efficiently. When training is provided to employees, it helps in developing interest and they

will learn new things. Reward system increases overall productivity of organisation and helps in
employee retention. There are two forms of rewards which are generally used by companies i.e.,
monetary and non – monetary (Rao and Singh, 2017).
In Tesco company rewards are given to employees according to their performance and
there is no discrimination among workers on any basis. All employees are treated equally and
have equal chance to get opportunity. Managers of company are setting standards for every
member and they take feedback from all workers present in the organisation. After evaluating
performance of workers, managers decide rewards or other benefits which should be given to
members for performing well (Fei, 2018). This helps in boosting confidence of employees and
develop interest among them. Rewards are given to workers so that they feel engaged and
motivated, help in creating positive environment in company. Employees are working hard so
that they can get benefits and feel motivated. It is important to apply some reward system to
maintain equality among workers and they will feel motivated.
In Unilever company, generally non – monetary benefits are provided to increase
productivity of firm and to boost morale of employees. It is important to give some non-
monetary benefits such as, holidays, extra amount is paid, trip for one week or any other way.
Managers of organisation make plans or strategies to evaluate performance of employees and
according to those rewards should be given. It is important to provide some additional benefits to
workers so that they feel motivated and relaxed. Holidays are given to members and to motivate
them bonus, increments and gifts are provided. This will help in reducing absenteeism and
employees will enjoy working. It will also reduce burden of employees and they can work
efficiently. Managers of company measure performance of every worker and give rewards
accordingly. When rewards or benefits are given to employees then it helps in boosting their
morale and they will feel motivated (Petrick and Furr, 2017).
Theories
Intrinsic and extrinsic
Intrinsic reward refers to benefits which employees get in the form of promotion, getting
career growth opportunities, appreciation, change in designation or any other benefit which is
intangible. This helps in increasing confidence of employees and boost their morale to perform
well. An employee is working efficiently in an organisation so that they can get promotion and it
will help in satisfying needs of workers. When they get promotion or their position level is

changed then they feel motivated and it will help in increasing efficiency of employees and
overall productivity of organisation will be improved (Dangmei, 2017).
Extrinsic rewards are tangible such as, pay raises, bonus, increment or other benefits in
terms of money. It is beneficial because it helps in creating positive environment in the company
and employees feel motivated. Some workers are happy when they get money or benefits such
as, bonus or increment, salary is increased. This will help in increasing efficiency level of
employees and they will work hard to accomplish goals and objectives of organisation.
Non- financial and financial
Financial reward means to increase salary of employees, give bonus to them, paid extra
amount for work they have done. This helps in employee retention and helps in motivating them.
This creates good working environment at the workplace and employees are satisfied (Uppal,
2020). Non- financial reward refers to benefits other than money like, holidays, trip or short
picnic, gifts, surprises or anything else. It will help in boosting morale of employees and they
will work efficiently.
Sometimes, rewards are given in groups like, group tour or picnic, teams which perform
well are given extra amount or some gifts. This is to appreciate work done by all team members
and other employees will perform well next time. It increases competition among workers and all
give their best to get rewards (Wass, 2019). It is important to motivate workers so that they can
improve their performance and it will help in completing work on time. Reward system helps in
building good image in market and satisfy needs of employees. They feel motivated and relaxed,
it helps in improving overall efficiency and productivity of company.
Meritt total reward model
Meritt total reward model is a model which helps in providing benefits to employees so
that they can perform well and it will help in achieving goals and objectives of company. It is
important to satisfy needs of workers because it will help in increasing overall productivity of
organisation and more revenue can be generated. There are four points in this model,
compensation strategy, job evaluation, performance measurement and market benchmarking.
Advantages of this model is it helps in measuring performance of employees and better plans can
be made, evaluation is done, strategies are applied which is beneficial for company. Performance
of every employee is being measured and according to those rewards are given. Disadvantages of
total reward model are, employees feel compensation is not accurate and they are not satisfied. It

creates negative environment in organisation and morale of employees decreases. Workers are
not satisfied and this has negative impact on the organisation (Tătar-Vîstraş, 2017).
Towers Perrin model of total reward
Tower Perrin model has four elements such as, basic pay, bonuses, long term incentives,
working environment and leadership. These are some components which help in satisfying needs
of employees and rewards are given to them. This help in increasing efficiency and productivity
of company. It is important to make plans or strategies for growth and development of firm, this
will help in earning more profit and helps in building good image in market. This model help
manager in identifying which employee is performing well and in which area training is
required. It will help in achieving goals and objectives of company. Disadvantages of Towers
Perrin model are, creates issue among employer and employee, conflicts among members,
workers will not able to focus on work (Vigli and et.al., 2019). So, manager should take
decisions after analysing all points and make plans for growth of company.
Theories, practices and approaches
For every organisation, it is important that employees should be motivated so that they can
perform well and it will help in completing the work on time. There are many approaches which
can be used by managers to improve performance of workers and provide them training which
will help in achieving goals and objectives. Managers of a company should make plans or
strategies to improve performance of employees and motivate them to work efficiently. This will
help in earning more profit and boost confidence of workers (Tasie, 2018). It is essential to apply
some theories and approaches like, performance management software, feedback should be
taken, use peer reviews, set regular meetings, use peer reviews etc.
In Tesco company, managers are using feedback scheme and set regular meetings to
measure performance of employees. They set standards for every employee according to their
specialisation and after work is done, managers evaluate performance of employees by
determining that whether they have achieved goals or not. It is important to measure
performance of employees so that training can be provided to improve their work and motivate
employees in achieving goals. Feedback is taken to give rewards or punishment to members for

their performance. If they perform up to the standard then rewards are given to them and if
performance is not good then punishment is given so that they can improve their work. This will
help in improving overall productivity of organisation as well as members (Fath and Jorgensen,
2020).
In Unilever company, managers set regular meetings with employees and measure
performance by giving task which workers have to compete within time frame that is given. It is
important to set meetings with employees and discuss issues they are facing and try to solve
them. This will help in increasing efficiency of employee and boost their confidence. When
members are involved in meetings then they feel motivated and it will help in improving their
performance. Managers are giving task to workers in groups or individual to check that whether
they are able to work properly or not. It is essential to focus on motivating employees because if
they are satisfied then they will work efficiently.
There are many ways by which performance can be improve and better plans can be
made for accomplishing goals and objectives. It is important to focus on performance evaluation
so that strategies can be made and training will be provided to improve performance of
employees. For motivating employee, appraisal should be given and some other non- monetary
benefits should be provided. This will help in reducing absenteeism among workers and increase
competition among workers. Provide safe and healthy working environment to employees so that
they can perform well and there will be no issue. Meetings should be conducted by managers and
involve all employees, ask them to give suggestions. Some training sessions must be provided to
members to enhance their knowledge and help in developing skills (Zhao, 2018). So, it is the
responsibility of managers to provide good facilities to employees and evaluate performance so
that improvements can be done.
High level of performance
Performance improvement plays a crucial role in every organisation and managers
should measure work done by individual employee. It is essential to determine performance of
workers and give them feedback. This will help in improving efficiency of workers and overall
performance of organisation will be improved. If performance of employees will be good then

good quality products can be made and needs of customers are satisfied. High level of
performance identifies right employee for promotion. In Tesco company, managers are
evaluating performance of workers by setting standards for individual employee and analyse
work done by employees. Rewards or additional benefits should be given to employees to
motivate them and this will help in increasing profit of company (Agarwal and Lenka, 2018).
When feedback is taken from colleagues or senior persons, then it is easy to determine that in
which area training is required.
Analysis of Tesco regarding fairness and equality
It is important that all employees should get equal treatment in an organisation. There
should be no discrimination among employees on the basis of gender, caste, race, religion,
colour, income or any other basis. All workers must have equal rights and opportunities within
the workplace. It is essential to treat everyone properly and all employees should be involved in
decision making process and they must have right to give suggestions. Sometimes, employees
are having better ideas which will be beneficial for growth and development of company (Chang
and Milkman, 2020).
In Tesco company all employees are having equal rights and opportunities, they are
involved in decision making process, having right to share their views and give suggestions
which will help in attracting more profit. There are some benefits of equality such as, it promotes
innovation in the company because employees are having new ideas which will help in earning
profit. Equality and fairness will help in adding new skills to teams and workers will perform
well and it improves overall performance of organisation. It opens ways for Tesco company to
expand their business in new markets and helps in making new products. Equality helps in
improving brand reputation because all employees are having equal rights and opportunities.
When rules and regulations are applied in an organisation then it will help in satisfying
needs of employees and they will perform well (Hebl and King, 2019). In Tesco company, laws
are applied which will help in improving overall performance of employees and goals of
company can be achieved. It is important to make equality among members so that they can
work in a team and understand each other emotion, language and culture. So, managers of Tesco

company treat everyone equally and involve them in decision making process and other meetings
which are being conducted. This will help in improving performance of employees and motivate
them to work efficiently. Equality helps in maintaining good working environment within the
workplace and helps in attracting customers.
Analysis of Unilever
For every organisation it is essential to apply rules and regulations, laws, policies and
procedures which has to be followed by every member within the company. This will help in
creating positive environment in the organisation and satisfy needs of employees. When rules
and laws are applied the workers feel safe and secure, it improves their efficiency. They will
work hard to accomplish goals and objectives of company. It is the responsibility of manager to
provide safe and healthy working environment to employees and solve their issues (Ud Din,
Cheng and Nazneen, 2018). This will help in boosting morale of members and has positive
impact on employees. In Unilever company, managers make rules and regulations, policies and
procedures, laws to maintain equality among members and it will help in improving overall
performance of company.
There is no discrimination among workers on the basis of gender, caste, colour, income
or any other basis in Unilever company. It is important to maintain equality among employees
and fairness while giving rewards. All workers are having right to receive rewards and all
employees should be given equal opportunities. It is necessary to follow rules and regulations so
that all employees feel safe and secure. Employees of Unilever company are involved in decision
making process and suggestions are taken from workers (Périvier and Verdugo, 2018). When all
members are getting equal treatment then it will help in building god image in minds of
customers and this lead to increase in profit. It will help in boosting confidence of employees and
reduces absenteeism.
Reward system
In every organisation it is important to give rewards to employees so that they can get
motivated and perform well. Rewards are given on the basis of performance of workers and it is
decided by managers. Members of an organisation improves their performance if they get
rewards and work efficiently. In Tesco company, rewards are given in the form of non- financial
system such as, recognition, increased job responsibility, increase position, holidays are given or

trip for a week. These are some non- financial benefits which help in satisfying needs of
customer and help in boosting their confidence (Halilbegovic, Celebic and Idrizovic, 2018). It is
important to enhance confidence level of employees so that they can work efficiently and it will
be beneficial in increasing overall performance of company. When rewards are provided to
workers then they complete their work effectively and efficiently, competition increases among
members because all want to receive rewards. It helps in improving performance of employees
and they will learn how to work efficiently.
This helps in increasing overall performance of company as well as of employees. It
creates positive environment at the workplace and employees feel motivated. It helps in retention
of employee and boost their confidence. Sometimes, non – monetary benefits also play a crucial
role in motivating members. In Unilever company, both financial and non- financial reward
system is being applied which help in boosting morale of workers and retention of members.
Rewards are distributed on the basis of performance of employees, managers of company divide
work among workers and set standards for every worker (Ngwa and et.al., 2019). Time limit is
given and all employees have to work as per the instruction given by leader.
After finishing work, managers measure performance of every employee, feedback is
being taken from leaders, juniors and all people, present in company. After taking feedback,
managers decide to whom reward should be given and employees who did not perform well are
given training to improve their work and boost their confidence. Rewards must be given to
employees because it helps in improving efficiency and it will reduce absenteeism among
members. When benefits will be provided to workers then they will work hard to get rewards.
CONCLUSION
From the above discussion it can be concluded that, there are different theories and
reward system which can be applied by an organisation. Advantages and disadvantages which
help managers in deciding theories that can be used to run firm. Reward system models which

are used by organisations to motivate employees. Theories, best practices and approaches such
as, intrinsic and extrinsic, financial and non- financial to reinforce and manage employees.
Higher level of performance with changing environment is described. Further, analysis of
organisations is being done on the basis of fairness and equality, total reward system, models for
reward system like, merit total reward and towers perrin model to motivate employees.

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