Reward Policy and Management System for Cheezy Pizza Company in Singapore

This paper discusses the implications of an effective reward management system for Cheezy Pizza Company in Singapore. It covers the significance of reward policy, objectives of a reward system, considerations for developing one in Singapore, and recommendations for designing an effective reward system.

HUMAN RESOURCE MANAGEMENT

Table of Contents
1.0 Introduction................................................................................................................................3
2.0 Plan Overview...........................................................................................................................3
3.0 Significance of Reward Policy..................................................................................................3
4.0 Objective of Reward System.....................................................................................................4
5.0 Considerations for Development of Reward System in Singapore Operation..........................6
6.0 Recommendation.......................................................................................................................9
7.0 Conclusion...............................................................................................................................11
References......................................................................................................................................12
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1.0 Introduction
Reward policy and reward management system (RMS) may be considered to be the critical
success factor (CSF) for the business organization (Camilleri, 2017). The instant paper briefly
discusses the implications of an effective RMS in an organizational context. While discussing the
same, the paper refers to the given case study of Cheesy Pizza Company which is a pizza
company and planning to expand its operations by opening 10 outlets in Singapore.
At the beginning of the study, the plan overview is provided followed by the significance of an
efficient reward policy. The subsequent part of the paper deals with the discussion on the
objective of the objective of the reward system. In addition, the researcher also attempts to
evaluate the points of consideration that should be kept in mind while developing a reward
system in Singapore of the business. Lastly, the researcher provides recommendation and wraps
up the discussion by providing a concluding note.
2.0 Plan Overview
Cheezy Pizza Company is Pizza Company based in USA. The company has been operating in
the given market for the last 10 years with the stable customer base and more than average
profitability than the market standard. The company has a good reputation in the domestic
market as employer and employees’ satisfaction index is considerably high for the firm in
comparison to its competitor. Now as part of its expansion program, the firm wants to go to
Singapore and plans t open 10 outlets therein. The reward policy of the plan needs to be
developed which forms the essence of the present paper.
3.0 Significance of Reward Policy
Reward management system (RMS) is a crucial success factor for a business organization. An
effective RMS helps the management to motivate the employees and staffs of the business
organization through financial and non-financial benefits. The core behind RMS is human
psychology. The researchers have established the fact that the effective reward policy boosts up
the employees and get them engaged in their roles and responsibilities (Swamy,
Nanjundeswaraswamy and Rashmi, 2015). Over the past few decades, there have been a number
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of researches conducted on the reward system and organizational performance and almost all the
findings have established the correlation between these two elements. It has been observed that
the well-structured reward system and policies around the performance linked bonus and
incentives significantly drive the motivation level of the workforce which, in turn, contribute
towards the operational excellence (Mustapa and Mahmood, 2016). The section below in the
report lists down some of the critical objectives behind a sound reward management system.
4.0 Objective of Reward System
Attraction and retention:
Business organization has several risk factors and the employee attrition rate is clearly among
them. There are instances where the management suffers from a huge attrition rate (Rees and
Smith, 2017). Such attrition may happen either because of the fact that the employees leave the
organization because of unsatisfactory pay package; or may be due to the termination by the
management on account of substandard performance (Hairon and Tan, 2017). In this context, an
interesting point to note is that the employee performance is also linked to the reward system of
the firm, as stated earlier also. If the business has faced consistently high attrition rate, the same
may dampen the brand value of the firm in the labor market and hence, the prospective
employees may not be interested to get associated with such brand (Pek-Greer, Wallace and Al-
Ansaari, 2016). Therefore, it becomes critical for the management to attract the new and best
talent and retain them with the business on a long-term basis. That is the reason; one of the
primary objectives of a strong reward management system is to attract and retain the talent
(Hairon and Tan, 2017).
Organizational Performance:
As mentioned previously, the reward policy is directly linked with the employee performance.
Well performing employees should be awarded so that the same effect the organization in two
ways. First of all, the well-performing employee gets motivated to continue to perform better
(Rees and Smith, 2017). Secondly, the same morally boost up other employees also indirectly to
contribute more to get awarded. RMS seeks to motivate the workforce through structured
policies and strategies and eventually helps the enhancement of quality and performance (Rees
and Smith, 2017).
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Skills and Knowledge Development:
There are companies that have structured their pay packages based on the level of skills of the
employees. For example, two employees working at a similar level may get a different salary
because of their skills and academic qualification. The companies run various sponsorship ship
program also in which employees may excel their knowledge acquire new qualification and learn
something new in order to compete in a skill-based pay environment (Nalla, Lim and Demirkol,
2015). This approach indirectly fosters the learning and development initiatives and help holistic
growth for the firm as well as o the individual.
Organizational Culture:
Reward system is one of the elements that contribute towards the development of organizational
culture. An organization may have different types of cultural environment inculcated within.
Some companies prefer an entrepreneurial culture where the employees are encouraged to take
independent entrepreneurship activities. There are firms that encourage an innovative culture in
which innovation and disruption become a priority and out of the box, thinking wins the race
(Nalla, Lim and Demirkol, 2015). Also, the business fostering the competency-based culture
promotes skills and performance in order to excel in the operational aspect of the business.
However, the reward system may have the ability to shape organizational culture and direct the
same towards the management’s objective of sustainability because the RMS has a profound
impact on communication motivation, performance, satisfaction and membership, and inclusion
also.
Organizational Structure Reinforcement:
A reward system may reinforce the organizational structure. An efficient reward system should
have the objective of uniting the employees, inculcate the bonding, and enforce the culture of
sharing and collaborating. Additionally, the efficient reward system helps to define the status
hierarchy of the business organization (Nalla, Lim and Demirkol, 2015).
Cost Optimization:
Employee benefit occupies major areas of entire administrative cost bracket of the organization.
The effective reward policy does not mean an excessive payment to employees; neither it would
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denote stringent pay structure and pay cut for the employees. There should be a balance between
the organizational performance which may be reflected through the financial health of the
business and the employee benefits. The objective of the reward system is to make such balance
and implement the same in an organizational context (Kiruja and Mukuru, 2018).
Legal Compliance:
The reward system should have the objective of the company with all the relevant la sans
regulations relevant in the country for the purpose of pay structure design. There are several
guidelines and pronouncement by the Government regarding the tax implications, and incentives
and waiver of benefits (Nalla, Lim and Demirkol, 2015). These factors should be taken into
consideration while designing a reward policy for the business.
5.0 Considerations for Development of Reward System in Singapore Operation
In order to build a strong and effective reward system, the management may need to consider
several factors. In the given case study, such considerations may be of two types. One is specific
considerations. It has been mentioned that the business intends to expand its operations in
Singapore. Therefore, it becomes utmost crucial and important for the HR managers to know the
country’s laws and regulations related to labor and workers if any (Shields, Brown, Kaine, Dolle-
Samuel, North-Samardzic, McLean, Johns, O'Leary, Robinson and Plimmer, 2015).
Accordingly, the reward policy should be developed. Specific considerations will be the relevant
implications of the country’s laws around the employees. On the other hand, there will be
general considerations which will be observed for all types of efficient RMS.
Specific Considerations:
In Singapore, all the employee benefits are governed by the Singapore Employment Act. The Act
governs the employment contracts, salary, compensation and benefits and all other related
matters in Singapore. Some of the salient features of the Act that may be relevant in designing
the reward system therein are briefly mentioned below:
Minimum Salary: In Singapore, there is no minimum salary to be paid to the employees.
However, the same should be paid once in a month and preferably within 7th of the following
month. Hence, the management may devise the policy accordingly.
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Working Hours and Overtime: The maximum working hour in a week is 44 hours. The
employees should not work for more than 6 hours without break. Also, employees should not
work for more than 12 hours per day, including overtime work. However, there are exceptional
cases which will be judged on case to case basis.
Leaves and Holidays: Though the law prescribes minimum 7 days, the common practice is that
the employer generally allows 14 days of annual leave.
Health Insurance: Singapore citizens or permanents residents employees are automatically
provided a low-cost medical insurance called Medishield.
Probation: The Act does not provide any guidelines for the probation period. The common
practice is that the employer may ask to serve for 2/3 months probation in which the notice
period is also shorter than the standard one month.
Termination: There is no notice period and separation may happen from any of the sides either
by way of paying salary or writing notice.
Training: There is no statutory requirement of imparting training to the employees, Nether there
are any practices of providing training to the staffs and workers for up gradation of their
knowledge (Guidemesingapore.com, 2018).
The other details are specified in the table below:
Features Managers /
Executives
Employees
earning >
2,000 pm
Employees
earning < 2,000
pm
Max. Hours
of Work per
Week
As per
contract
As per contract 44 hours
Max. Days
of Work per
Week
As per
contract
As per contract 6 days
Overtime As per As per contract Maximum 72 hours
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contract per month
CPF
Contribution
Required Required Required
Annual
Bonus
As per
contract
As per contract As per contract
Paid Annual
Leave
As per
contract
As per contract 1st year – 7 days
Paid Sick
Leave
As per
contract
As per contract Outpatient: 5-14
days
Paid
Maternity
Leave
16 weeks 16 weeks 16 weeks
Paid Annual
Childcare
Leave
6 days 6 days 6 days
Paid Public
Holidays
11 days 11 days 11 days
Probation
Period
As per
contract
As per contract As per contract
Termination
Notice
Period
As per
contract
As per contract As per contract
Medical
Insurance
As per
contract
As per contract As per contract
(Guidemesingapore.com, 2018)
While designing the reward policy, the HR manager should consider the following points as
these are the elements of an ideal reward system.
 Compensation: base pay and other allowances
 Benefits: non-financial benefits like holiday packages, fuel reimbursement, health
benefits and insurance etc
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 Recognition: award system, promotion (e.g employee of the month)
 Appreciation: Note of thanks, thank you card etc.
General considerations:
The performance measurement may be formed by way of the following six criteria:
 Efficiency: A measurement which confirms the output at minimum cost. The same may
be corroborated from the phrase “Doing right things” which means that a person is
efficient enough in executing particular work at minimum cost.
 Effectiveness: A measurement that assures that the output conforms the requirements.
The same may be explained by way of the phrase "Doing things right". In other words,
then a person may be efficient enough to execute a particular work, but that work may
not be required for the organization, so, he or she is ineffective for the business
(Sabharwal, 2014).
 Quality: A measurement that defines that the product o service meets customers’
requirements.
 Timelines: A measurement that defines that a product is manufactured or service is
provided to the client in a timely manner.
 Productivity: A measurement which is derived by way of dividing total value created by
a process by labor and capital and other resources consumed therein.
 Safety: A measurement which considers that the overall health of the employee and
workplace is favorable for the business and society as a whole.
6.0 Recommendation
The discussion above brings out certain points which the HR manager of the company should
consider while formulating an effective reward system for the business.
First of all, the Singapore Employment Act should be consulted with and all the reward policies
should be in compliance with the Act. However, there are certain areas where the Act is silent
and in such case, the common practice will prevail. For example, the probation period is not
specified in the Act. However, the HR manager should consider around 2 week’s time for the
probation period as common practice (Festing and Tekieli, 2018). In this context, it may be noted
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that the reward system does not only count the employee benefits in terms of pay packages
during normal contractual agreement of service. It rather also includes the compensation
structure for all types of employees, be it temporary, apprentice, permanent, probationary or even
labor forces.
Another interesting point is training and development for the staffs. The Act does not specify any
requirement. Also, the companies in Singapore do not entertain such training. This may be a
dicey area for the business intending to expand its operation in Singapore. If the employees there
are not comfortable or habituated with the training and development proposition, they may feel
awkward or even puzzled which may affect their performance. However, if the employees are
motivated through strategic persuasion, such training provision may add significant value to the
firm’s CV in terms of brand creation and sustainability approach (Debroux, 2017).
Besides, the HR manager should also consider the fact that the people working there in
Singapore operation of the company get fair scope of transfer to USA and vice-versa under
cultural exchange program whereby people of both the countries may get considerable
opportunity to explore the differences in the culture and traditions of both the societies and hence
may inculcate the same in their work practices (Greene and Kirton, 2015). The researches have
established the fact that such kinds of program significantly helps to build the team bonding and
enforce cultural diversity and inclusion within the workplace and thereby enhance the
organizational culture effectively towards sustainability (Vaiman and Brewster, 2015).
In addition, the HR department of the firm should also need to identify the common psyche of
the people in Singapore in relation to the rewards. Different societies across the world have been
built up in different socio-economic backdrop and hence, the culture and choice and preferences
vary widely with respect to the demographic profile of the people (Banks, 2015). Since
Singapore is among the developed countries, the people over there generally prefer to be
rewarded with intrinsic rewards like responsibility, development, respect and prestige and not
through extrinsic rewards like pay, bonus or overtime (Adams, Nyuur, Ellis and Debrah, 2017).
HR manager may need to keep the factor in mind while formulating reward policies.
Therefore, it is recommended to the HR manager to consider these points and chalk out a reward
system in such a way that the same adds value to the company’s relationship portfolio. It is
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needless to mention that while formulating the policies, the HR manager should be in constant
consultation with the company’s CEO and their accord in terms of consideration of both the
pecuniary and the non-pecuniary factors that may affect the employee performance and affect the
organizational operations (Desmet, Ortuño-Ortín and Wacziarg, 2017).
7.0 Conclusion
Based on the discussion and analysis performed in the preceding sections of the report, it may be
identified that the effective reward management system is a key to organizational success.
Implementation of effective RMS and its effective execution requires strategic moves by the HR
managers and the management as a whole. However, there are certain challenges in the
implementation of a new set of RMS and strategies.
First of all, the employees may be resistant to change. This is a psychological barrier which
should be methodically diminished by showing them the financial and non-financial benefits that
may accrue for them in near-term (Napathorn and Kuruvilla, 2017). Secondly, it has been
identified that the RMS fails to measure all financial and non-financial factors creating value for
the business (Park, Min, and Chen, 2016). Also, the system fails to measure the learning,
development, change, and growth in non-financial terms. Lastly, it has also been noted that
people tend to concentrate too much on the immediate benefit rather than focusing on the
achievement of long-term goals. As a result, the implementation of reward policy gets stuck
(Houlihan, Contreras and Barnicle, 2016). Hence, it may be concluded that HR managers, in
consultation with higher management, must formulate strategies and plans as to how to go about
the reward policy developing and accordingly develop the same considering all the externalities
and challenges associated with it (Dumont, Shen and Deng, 2017). A well-designed, structured
and strategic reward management system will significantly contribute towards the corporate goal
of achievement of sustainability in the long-term in a most efficient manner (Armstrong and
Taylor, 2014).
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