Reward System Designing for Cheesy Pizza: Objectives, Importance, and Designing Process
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This report discusses the objectives and importance of reward systems for organizations, with a focus on Cheesy Pizza. It also outlines the designing process of a reward system, including factors such as total reward, pay structure, reward mix, intrinsic and extrinsic motivations, equity, and compliance with local legislation.
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Running Head: REWARD SYSTEM DESIGNING Cheesy Pizza Singapore [REWARD SYSTEM DE
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REWARD SYSTEM DESIGNING1 Table of Contents Introduction................................................................................................................................2 Company background.................................................................................................................2 Reward system...........................................................................................................................2 Objectives of reward system......................................................................................................2 Importance of rewards system....................................................................................................2 Adapt to future change...........................................................................................................2 Comply with corporate environment of the organization......................................................2 Align and support business strategy.......................................................................................2 Align with HR practices.........................................................................................................2 Reward system designing...........................................................................................................2 Total reward system...............................................................................................................2 Programme.........................................................................................................................2 Value..................................................................................................................................2 Pay structure...........................................................................................................................2 Reward mix............................................................................................................................2 Intrinsic and extrinsic motivations.........................................................................................2 Equity.....................................................................................................................................2 Comply with the local legislation...........................................................................................2 Implementation...........................................................................................................................2 Communication......................................................................................................................3
REWARD SYSTEM DESIGNING2 Union interference..................................................................................................................3 Functions............................................................................................................................3 Role of trade union.............................................................................................................3 Line manager’s training..........................................................................................................3 Feedback.................................................................................................................................3 Recommendations......................................................................................................................3 Conclusion..................................................................................................................................3 Reference....................................................................................................................................4
REWARD SYSTEM DESIGNING3 Introduction Today organizations are expanding their business overseas to make their business global. In thisprocessglobalizationishelpingthemtoexpandeasily.Globalizationmotivates organizations for such decisions also encourages companies to innovate new products and strategies to make their business successful. The innovation in strategies is much needed in the competitive market and increasing competition of the global market is the only reason demanding for innovations in company strategies(Alfandi, and Alkahsawneh, 2014). To make such innovative change organization need a complete support from their employees and this support requires some motivation or driving force that can motivate or encourage employees to make such changes in the organization. Providing rewards is one of the best alternatives for motivating employees for enhancing their productivity and making some extra effort for the organization. This suggests that an effective reward system is much needed tool for an organization to motivate their employees. in some of the studies rewards system is defined depending on the context for which the system is designed. Other studies suggest that the reward system is not designed for a single purpose. There may be more than one motive to design a reward system. These studies diversify the definition of reward system depending upon the purpose for which a rewards system is designed (Alonso-Alonso, et al, 2015). In this context Cheesy Pizza is introducing new reward system for its employees. This reward system targets Cheesy Pizza employees to motivate them to enhance their efficiency so that organization can achieve its goals and objectives set for the future of company. This report identifies motivations or objectives of reward system and designs a rewards system to comply with different factors influencing the system. The designing process and implementation of the reward system is also discussed in this report.
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REWARD SYSTEM DESIGNING4 Company background Cheesy Pizza is a US origin company. It is a family owned company and successfully operated. Company was established in 1985, in New York. Restaurant serves homemade Italian dishes and has its speciality in its variety of chees pizzas. Restaurant is making good business but the globalization has started showing its impact on the sales of the restaurant (Cheesypizza, 2018). The impact of the globalizing competitive market demands for new innovativestrategiestomaintaincompanystatusandbusiness.Restaurantwantsits employees get motivate for making extra efforts so that the business of the restaurant can be increased. For this organization has decided to design a reward system to motivate its employees. Reward system In every organization employees are the key elements to make the company successful and even to introduce any change in the organization management needs the employees most. HRM of the organization has to understand and identify the importance of employees in any change they want to introduce in the organization. Once management understand the importance of their employees to make any change in the organization, it will be easy for them to identify the key objectives or goals of the reward system. (Bamberger, Meshoulam, and Biron, 2014). Reward systems are also the fundamental of hiring and retaining new, experienced, and talented employees in the organization for a longer time period. This diversity of reward system defines a wide range of reward that can be provided in different forms.Thisrangeofrewardscanbecategorisedasmonetary,non-monetary,and psychological incentives. In literature there are many more fundaments of reward system are discussed (Blechert, Klackl, Miedl, and Wilhelm, 2016). From all the fundamentals discussed
REWARD SYSTEM DESIGNING5 in different studies most important fundaments is recognised as implementing new strategies and achieving the goals and objectives of the organization. Objectives of reward system When an organization plans to design an effective reward system it is very important for the organization to clearly define the objective off the system they are going to design. Defining objective will make sure to fulfil the ultimate goal of system designing. Defining the objectives clearly, ensure that the rewards system organization is designing will be effective and surely will ensure the efficiency enhancement of the organization. Major objective of the reward system in case of Cheesy Pizza are ï‚·To hire talented candidates and retain the experienced ones ï‚·Toenhancetheorganizationcultureandmakingitfavourableforinnovation, participation, and flexibility of employees ï‚·To motivate employee to enhance their productivity ï‚·To strengthen the organization structure in terms of organization status and market value Importance of rewards system Rewards play an important role in different aspects of the organization. Provision of incentives or rewards is primary consideration for HR management of the organization. starting from HRM consideration rewards system attract talented candidate in the recruitment ans selection process of the company. Different studies suggest that employee satisfaction is the most important factor talented employees seek for. Being a system that satisfies the employees in some context makes the system more important to be implemented in an organization to attract and retain talented employees in the organization.
REWARD SYSTEM DESIGNING6 Individuals have their own skills and efficiency for any work or responsibility but these skills and efficiency of employees can be improved with such systems that motivate them to enhance their productivity. Such rewards or incentive provided to the employees encourage them with different motivation and ultimately lead them to make some extra efforts. Literature states that the success of an organization can be measured by the organization exploitation of their employees in terms of their qualification and skills they have. Such definitionoforganizationsuccessmotivatesscholarstoresearchindeepthathow organizations can improve their employee skills. Further organizations can understand how to attract well qualified or experienced employees to improve company status and hierarchy in thecompetitivemarket.Rewardsorincentivebeingdiversemotivatingelementfor employees ensures the skill improvement of employees. This makes it more important for organization to design and implement an effective reward system to showcase its success. There are some other aspects for which reward systems has its importance in a different context and some of these aspects are as following Adapt to future change Since provision of rewards and incentives is a common and most effective approach an organization can opt to motivate their employees, organization should design reward system in such a way that is remains effective for longer time period. This concern of organization for reward system suggests that system must comply with the changes that the organization can face or come across in the future. This makes reward system more important to the organization because provision of the rewards will enhance the flexibility of employees to adapt the changes organization wants to make in future (Chen, Flint, Perry, Perry,. and Lau, 2015).
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REWARD SYSTEM DESIGNING7 Comply with corporate environment of the organization Internal corporate environment of an organization has to be acceptable for employees working in the organization. And this corporate environment can be improved with the provision of rewards as rewards will introduce a respective competition among the employees in a positive way (Buckholtz, et al, 2010). Such competitions are good for corporate environment therefore reward system is important in this aspect too. Align and support business strategy Ultimate goal of the organization, while providing rewards or incentives, is to motivate employees to make extra efforts for improving their skills and to enhance their performance so that organization can achieve its goals and objective (Teoh, 2017). Therefore, reward system plays an important role in providing support to the organization in achieving its objectives. Align with HR practices Reward system is an integrated element of the organization that is interlinked with different managements of the organization. Reward systems influence the HR management most in a positive was as the provision of an effective reward system helps HR management to hire and retain best professionals for the organization. Although HR management play a significant role in designing of the rewards system, it gets much significant outcomes too in its favour. Reward system designing Designing process of the rewards system is difficult task for the organization management as there are number of factors that need to be considered while designing a reward system. These factors influence the designing process significantly and may lead the design to a completely wrong way (Bradley, 2017). Therefore, consideration of these factors is very
REWARD SYSTEM DESIGNING8 important and must be considered for their individual influence separately. Some of the major factors which influence the designing of reward system most are as following ï‚·Total reward ï‚·Pay structure ï‚·Mix reward ï‚·Intrinsic and extrinsic motivations ï‚·Equity ï‚·Comply with local legislation Total reward system Total reward system is defined as the provision of a reward system in which, both the monetary and non-monetary, incentives are to be provided to the employees. This type of investment made by the company to provide both the incentives retains the professionals making significant contribution to the organization in achieving its goals (Grabner, 2014). Total reward system characteristics influencing the reward system design are Programme A programme of the total reward system must be considered to be provided in the reward system to make it more effective. Programme specifically designed for the system helps the organization to make its investment effective and easy. Value Value of the reward system is must especially for employees. Greater value of the reward system among the employees makes it more effective and efficient. Therefore it is important that the reward system have a high value.
REWARD SYSTEM DESIGNING9 Pay structure If the organization is investing its money and efforts in providing rewards to motivate them then it is important to define an effective pay structure that ensures the complete satisfaction of employees. An effective pay structure includes every possible way of rewarding so that most of the employees satisfies with the system (Dreher, Kohn, Kolachana, Weinberger, and Berman, 2009). Since every employee has his individual interests or desires to be satisfied with their job, a wide range of rewards can make them all satisfied with every aspect them desire for. An example of pay structure or various rewards can be seen below in the chart
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REWARD SYSTEM DESIGNING10 Reward package Extrinsic Core benefits Basic salary Variablw pay Merit Bonus Sharing options Fringe benefits Health insurance Life insurance Pension Company Car paid education Holiday apy Company discounts Paid leave Holidays Sickness days Maternity Training Unpaid Leave Add maternity Adoptive Parental Intrinsic Job satisfaction Feedback Recognition Responsibility Autonomy Security Development Status
REWARD SYSTEM DESIGNING11 Reward mix Mix rewards are designed to promote a culture that can comply with the business strategies of the organization. This system requires some extra ordinary efforts to the consideration of various elements influencing the reward system along with maintaining the flexibility, equity, and simplicity. This consideration suggests a provision of financial and non-financial rewards and making both fixed as well as variable payments to the employees (Huang, and Chen, 2010). Mixed rewards consider the basic salary of employees as a benchmark for the provision of such rewards. Reward mix system allows the provision of incentives to both the individual efforts as well as team efforts. Intrinsic and extrinsic motivations Reward systems are designed to motivate employee and these motivation can be categorised broadly into two categories as intrinsic and extrinsic motivations. While designing a reward system the consideration of right motivation that is required for individual employees should be clearly identified to make the system more effective. As the name defines the meaning of intrinsic and extrinsic motivations explains the motivation of employees in the form of self- motivation and external motivation respectively (Ke, and Wei, 2008). Both the motivations can be understood with the help of below given table differentiating these motivations ExtrinsicIntrinsic ï‚·This is an external form of motivation ï‚·Notnecessarytogetfromother person ï‚·Thisisdefinedasmotivation provided for some specific work ï‚·Employees accomplish goals given by the management or seniors ï‚·HRmanagestheengagementof ï‚·This is an internal form of motivation ï‚·Essentially driven by desires of the employees ï‚·This motivation is defined as self- motivation of employees ï‚·Employees accomplish their goals for self-satisfaction ï‚·Employees manage their engagement
REWARD SYSTEM DESIGNING12 employees with specific tasks ï‚·Thismotivationincreasesthe employee turnove with tasks ta their own ï‚·Retention of employee increases with such type of motivation Equity Equity focuses on the fairness of the reward system which defines that the provision of reward should be fair enough for each and every employee so that they can have a feeling of equal recognition. The fairness of reward system influences the employee assessment mostly and employees are most concern about the fairness of employee assessment. Employee assessment being the most critical element of the reward system it affects employees most. In the literature it is suggested that the best way to measure the equity of a reward system in a practical way is the observation of organization workplace environment in terms of employee interaction with each other comparing their recognition with others. In an organization sometimes it can be seen that the employees are talking about the rewards given to their colleagues and they are not satisfied with their rewards (Courtney, Rapuano, Sargent, Heatherton, and Kelley, 2018). Such a scenario demonstrates that the reward system is not satisfyingalltheemployeesanditneedssomeequityconsiderationtoincreaseits effectiveness. Comply with the local legislation While designing a reward system the local legislation must be considered as the legislation defines the basic rules and regulations for the provision of such incentives or rewards by the organizations. These provisions of such rules by the local legislation influence the reward system to define a minimum amount of incentives to be provided for some specific achievements and also a minimum criterion for the organization to be fulfilled in order to provide incentives (Kawamichi, et al, 2016). This factor influences most when organization
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REWARD SYSTEM DESIGNING13 has to make a move in different locality. For example, if an organization has a reward system for its employees working in another country then it has to consider the legislation of the destination country rather than the origin country. Implementation Once the designing process is completed the biggest task for the organization is to implement the system effectively. Implementation of the system must be effective as it measures the possibility of getting success in terms of its after effects on the employees. Therefore, implementation of the system is considered the most part of the rewards system (Van Opstal, et al, 2018). To make an effective implementation of the system there are few elements to be considered while implementing the system. These elements are as following Communication Communication is the most important element in the implementation process of any system in an organization. communication is the first and most important step of the implementation process of any system designed by the organization. This communication decides the effectiveness of the implementation process as the implementation will be more effective onlyifthesystemiscommunicatedeffectively.Oncethewholesystemstructureis understood by the employees and the managers involved in the system its implementation become easier. Communication in an organization follows a channel which conveys the system information from higher authorities or management to the employees. Therefore the channel must be efficient to convey the right message (Lammel, Lim, and Malenka, 2014). This channel involves different elements like line directors, management, line managers, trade union, and employees.
REWARD SYSTEM DESIGNING14 Union interference Workers in various have their union called trade union. In this union employees are the union members and one among these employees is selected as their leader called union leader. Unions play an important role in an effective communication of reward system. Since the rewards systems are designed for the employees, the information about such system has to be conveyed to the employees. Organizations in which employees have their union get such information from union leaders. In this way organization has to ensure that the union leader has understood the system very clearly. Now it is his responsibility to pass the information to each employee. For an organization it is very difficult to inform each employee therefore unions are important and inform each employee effectively (Trost, et al, 2016). Unions also have their functions and roles in the organization and its communication channel. Functions There are different functions a union has and some of them are as ï‚·Works as a bridge between management and employees. ï‚·Ensuring the well-being and satisfaction of employees ï‚·Increasing employee co-operation ï‚·Providing all the benefits, company has provision for, to the employees Role of trade union Being the key element of communication between employees and organization trade union plays different roles in an organization. It works for both the organization as well as employees. Trade unions help organization to create a harmonious environment which benefits both organization and employees in achieving their respective goals.
REWARD SYSTEM DESIGNING15 Line manager’s training Line managers act as a mediator between management system and employees therefore to convey any information from management to the employees they plan an important role. This importance make them most critical element of the organization’s communication channel and demands for a specific training. This training of line manages is conducted to ensure that they understood the reward system completely and can convey the information effectively to the employees. Such trainings make is easy to make them clear about the every aspect of the reward system that ensures that the system will be introduced to employees in an effective way and ultimately the system will get success in achieving its objectives (Sawyer, et al, 2017). Feedback In the final stage of the implementation process of a rewards system it is important to collect feedback from employees. These feedbacks will identify the key issues as well as the key drawbacks of the system (Tumin, 2018). This type of information is can be used to improve the reward system periodically with the consistent change made in the organization systems. Recommendations From the above analysis it is highly recommended to the Cheesy Pizza that the reward system they design must consider each and every factor that influences their system. Organization management should also consider their organization objectives. Reward system designed by the company should be flexible to adjust with the changes organization may face in the future. Finally from the report it is highly recommended to the organization that once before implementation of the system management should check for any factor left unconsidered to make sure that the system has maximum possibility of getting success.
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REWARD SYSTEM DESIGNING16 Conclusion Thorough analysis provided above in the report concludes that the reward system is essential for organization in different aspects and most importantly it is used as a motivational tool. An effective reward system ensures that the employee working in the organization get motivated and increase their productivity. This makes organizations to achieve their goals easily and become successful in the competitive market. Different stages of the reward system are important individually and should be considered with equal importance. It also concludes that implementation of the system is as important as its designing process. Therefore, cheesy Pizza should consider every aspect separately and design the system according its own desires to compete the market.
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REWARD SYSTEM DESIGNING18 Chen, E., Flint, S., Perry, P., Perry, M. and Lau, R., 2015. Implementation of non-regulatory food safety management schemes in New Zealand: A survey of the food and beverage industry.Food control,47, pp.569-576. Courtney, A.L., Rapuano, K.M., Sargent, J.D., Heatherton, T.F. and Kelley, W.M., 2018. Rewardsystemactivationinresponsetoalcoholadvertisementspredictscollege drinking.Journal of studies on alcohol and drugs,79(1), pp.29-38. Dreher, J.C., Kohn, P., Kolachana, B., Weinberger, D.R. and Berman, K.F., 2009 Variation in dopamine genes influences responsivity of the human reward system.Proceedings of the National Academy of Sciences,106(2), pp.617-622. Grabner, I., 2014. Incentive system design in creativity-dependent firms.The Accounting Review,89(5), pp.1729-1750. Huang, C.T. and Chen, P.T., 2010 Do reward programs truly build loyalty for lodging industry?.International Journal of Hospitality Management,29(1), pp.128-135. Kawamichi, H., Sugawara, S.K., Hamano, Y.H., Makita, K., Kochiyama, T. and Sadato, N., 2016. Increased frequency of social interaction is associated with enjoyment enhancement and reward system activation.Scientific reports,6, p.24561. Ke,W.andWei,K.K.,2008OrganizationalcultureandleadershipinERP implementation.Decision support systems,45(2), pp.208-218. Lammel, S., Lim, B.K. and Malenka, R.C., 2014. Reward and aversion in a heterogeneous midbrain dopamine system.Neuropharmacology,76, pp.351-359. Sawyer, K.S., Oscar-Berman, M., Barthelemy, O.J., Papadimitriou, G.M., Harris, G.J. and Makris,N.,2017.Genderdimorphismofbrainrewardsystemvolumesin alcoholism.Psychiatry Research: Neuroimaging,263, pp.15-25.
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REWARD SYSTEM DESIGNING19 Teoh, A., 2017.Method and system for distance based video advertisement reward system with instant dynamic price generation for digital media propagation. U.S. Patent Application 15/392,150. Trost, S., Diekhof, E.K., Mohr, H., Vieker, H., Krämer, B., Wolf, C., Keil, M., Dechent, P., Binder, E.B. and Gruber, O., 2016. Investigating the impact of a genome-wide supported bipolarriskvariantofMAD1L1onthehumanreward system.Neuropsychopharmacology,41(11), p.2679. Tumin, M.M., 2018. Some principles of stratification: A critical analysis. InInequalitypp. 7- 20. Routledge. Van Opstal, A.M., van den Berg-Huysmans, A.A., Hoeksma, M., Blonk, C., Pijl, H., Rombouts, S.A. and van der Grond, J., 2018. The effect of consumption temperature on the homeostatic and hedonic responses to glucose ingestion in the hypothalamus and the reward system.The American journal of clinical nutrition,107(1), pp.20-25.