Reward Management - Assignment Solution

Added on - 19 Feb 2021

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REWARD MANAGEMENT
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK...............................................................................................................................................11...................................................................................................................................................1A. External and internal factors considered while performance management and evaluation onbusiness strategy..........................................................................................................................1B. Relationship between human capital theory and internal labour market................................32. Approaches for pay structure and its evaluation.....................................................................43 Evaluation of performance of employees in relation to pay structure.....................................74.................................................................................................................................................10A. the impact that performance related pay might have on the employees..............................10B. Factors that determine reliability and validity of market in deciding pay structures...........11CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................15
INTRODUCTIONReward management is formulation and implementation of the policies and strategies thataim to reward people who are capable for fair, consistent and equitable with the organisation(Perkins, White and Jones, 2016). Its objective is to motivate employees, recruit and retainemployees maintain equity internally and externally with strengthen phycological contracts andmake financially sustainable with the effectiveness in the organisation. Hiscox is an insurancecompany founded on 1901 its headquarter are situated in Hamilton, Bermuda. The companyearned revenue euro 2,658.5 million in year 2018. the company net income in 2018 was euro128.0 million. The started its business as underwriting marine insurance at Lloyd's market in1901 and now the company is listed on London stock exchange.In this report the study will be done on reward management in organisation that is relatedto external environment,government policies and strategies in direction of business. The studywill include the impact of legal regulation and makeequality among the employees. Further thediscussion will be based on the theories of reward in which efficiency theory, wage theory andsocial psychological theory on the basis of equity and psychological contract.Last but not leastthe study will signifies the impact of reward on the performance employees. Lastly it will discussthe factors that affects pay structure of employees in relation to market rate data.TASK1.A. External and internal factors considered while performance management and evaluation onbusiness strategyTwo internal and external factor that need to be considered seeing the performancerelated pay:Internal factors are those factors that exist in the organisation and it also affect the pay structureof company(Antoni and et.al., 2017). Some internal factors are:1)Paying capacity of company:Paying capacity of the company needs to be high if thecompany wants to give rewards to its employees. The paying capacity of every companyincreases over time. If a company is earning good then only it will be able to pay rewardto the employees. Reward motivates the employee to work more and this will grow thecompany and the paying capacity of the company will increase(Rose, 2018). Hiscoxcompany developed and now it started to reward its employees so that they perform1
better. Company invest more in other businesses rather than in the employees. Ifcompany invest properly in their employees by paying them incentives and bonus then itwill be very beneficial for company in future.2)Business Strategy:If the business strategy of the company is to pay equal to all theemployees then company will grow at slow pace. But if company will give reward to itsemployees then they will initiate more and they will perform more efficiently. Thebusiness strategy of a company changes from time to time and it depends upon variousfactors that effects the business to change its strategies(Shields and et.al., 2015). Goodstrategy is very important for a company to grow and more reward will motivate theemployees to do more. The company should pay more to employees so as to remove thecompetition because if company will pay more and reward properly then no employeewill leave the organisation. The companies nowadays are makibng those businessstrategies which focusExternal factors are those factors which affect the company from outside. There are variousfactors which affect the business like Labour market, cost of living, competition etc. Some morefactors that affect are:11Government policies:Government policies affects the company very much . In aninsurance company government play a very important role. It decides what the companyshould maximum charge from customers. Rewards play a very important role here. Ifgovernment policies are lenient then more people will invest in insurance and this willincrease the number of customer of a company(Rondeau, 2018). The reward willencourage the employees to bring more customers and spread the working of thecompany. Hiscox company is affected by changes in the government policy. Changes inthe interest rate charged by the company has been changed by the government and thishas affected the working of the company. The company will pay less rewards to theemployees if these rates are reduced.11Cost of living:Prices of different amenities are increasing at a rapid rate. People are notable to afford the basic items. It is important for companies to increase the salaries ofemployees. If the company gives reward to employees then they can do some additionalactivities and they will be loyal for the company(Simosi, Tomprou and Rousseau, 2019).The population of the world is increasing very fast and companies need to change their2
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