Strategic Human Resource Management: Individual Performance Related Pay

This report discusses the concept of individual performance related pay (IPRP) in strategic human resource management. It explores how IPRP can motivate employees and improve organizational performance. The report also examines the circumstances where IPRP tends to be effective in motivating employees and the situations where it may not work well. The case study of Londis, a retail organization in the UK, is used to illustrate the application of IPRP.

Strategic Human
Resource
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
Main Body.......................................................................................................................................1
Individual performance related pay.............................................................................................1
Consider in what circumstances IPRP tends to motivate employees..........................................2
Why circumstances tends to motivate employees ......................................................................4
Circumstances where it tends not to work so well and why........................................................5
CONCLUSION................................................................................................................................5
REFERENCE ..................................................................................................................................6

INTRODUCTION
Strategic human resource management is the activity which is highly required in
organisation in order to manage all activities and function in order to operate and attain the
decided goals. It is true, without managing human resources and planning a business cannot be
success and faces the many problems while operations. Strategies are formulated by a
responsible person who have special type of knowledge, practices and skills to managing people
and completing task (Armstrong, 2019). The main purpose of human resources is to improve the
organisational performance by integrating with objectives and aligning with strategies. For
organisation it is important to have a Human resource management who can identify the business
condition and formulate the planning accordingly which can help to bring improvements and
attain the business goals. To understand about this Londis has been selected that is a retail
organisation in UK, selling different types of products and services to customers. In this, all
activities are functions are managing by human resource management who identify needs and
plans accordingly. This report covers evaluation of individual performance related pay which can
be stimulate high level of performance from employees.
Main Body
Individual performance related pay
Individual performance related pay is defined as pay which varies person to person,
where it is important for management to analysis the performance of employees and make the
decision to pay accordingly. It has been defined that performance related pay and pay for
performance, are different term which influences employees and getting the work done
effectively. Performance related pay rise by considering salary and wages paid system which
bases on positioning the individual and team's performance. In organisations, employers are
using basic standard for evaluating the performance of employees and setting salaries which may
motivate to work more (Collins, 2020). In Londis, employees are the assets of organisation who
identify the goals and decided their roles and responsibilities which is required to be perform in
order to attain the business goals and objectives. The HR management of such organisation,
formulate plans and measure the performance which can help to decide their salary and
incentives which is based on performance and activity completion on time. It is important for
firm to analyse the employee's needs and requirements so they can be motivate by filling their
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needs and get complete the task. In the changing business environment, individual performance
related pay is useful to use that can increase the productive level, profitability and selling
activities with the help to employees. The employees are working more in expects of getting
higher benefits and incentives for which they have worked. This can help to attain the business
goals and higher profitability as workers get motivated and retain for long period of time. If
company is not able to provide right pays and incentive to employees for their working then they
start to feel dissatisfaction and make decisions to leave the organisations. The management of
Londis should focus on employee's performance and motivation which can influence them to
work continuously and attain the business goals. Therefore, individual performance related pay
can stimulate higher level of performance from employee by analysing their activities and
function which can help to continue the business operations and maintain higher productivity
(Hamadamin and Atan, 2019).
Consider in what circumstances IPRP tends to motivate employees
Individual performance related pay has increased in recent years so to improving the
organisational performance it is important to focus on employee's pay scale and their motivation
which can influence them to accept the challenges and complete the task in given time period.
Performance related pay is considered as monetary rewards of staff whose performance has
surpassed from a required standard and organisation is attaining the higher profits accurately. In
circumstances pay scale, motivation, bonus, rewards and other monetary activities are included
where employees performance cannot be reliably measuring by other standards. In other words,
IPRP is well designed activity that pull employees together and motivate them to move in
direction management who wants to perform and increases the profitability. From the deep
analysis and research it has been been defined that performance related pay give results of
changing in behaviour, attitudes and also improve the decisions which can influenced to work
more and become talented in their activities (Gannile, Ab Yajid, Khatibi, and Azam, 2020).
There are some circumstances where IPRP can motivate the employees that are as defined:
For motivating the employee IPRP system is relevant which can be uses by organisation
to fill the requirements of their employees who are working and completing the task timely. For
motivating employee by using IPRP the first circumstances is equity and efficiency that can be
uses by companies by pursuing organisational objectives. According to this, management should
rewarded their employees equally and in efficient manner. There should not be partiality between
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motivation to different individuals. For instance, Londis is a retailing company that is operating
business with the help of employees who understand their role and perform responsibilities
effectively. In this organisation, management treat and observed all employee equally and uses
resources to motivate them with equity and efficiently manner. This equity enhance the morale
of employees and feel that they are all valued at same level which increases their power to work
and participate in all activities effectively. Therefore, employee and employer of chosen
company achieve their set standards of performance by feel good in context to performance
related pay (Fadhil, 2019).
Financial rewards are considered as visible which can motivate the employee to work
more and attain the higher satisfaction. From the research it has analysed that most of the
organisation do not disclose their compensation and benefits but their have greater potentiality to
motivate their employee in context to related pay which can affect the staff and bring the changes
in performance. If organisation disclose the compensation then employees can actually see the
fairness of the system and make feel them that they are not under observed. Whenever
employees are working in organisation then it is obvious that they know certain rewards awaits
them so an organisation should focus on employee's performance and formulate the
compensation plans by disclosing them which motivates them at higher level and increase the
workings. For instance, management of Londis disclose the compensation which make feel
motivation and increases the fairness of the reward system. This can help to operate the business
and manage the all activities with the help to working staff (Westerman and et. al., 2020).
Effective working environment is also involves in circumstances of motivation in IPRP
where it is important for management to provide a clean, safe, healthy and friendly environment
where employee can work and share their views to others which can help to improve the business
performance and increases the profitability. If working environment is not good and effective
then it will be difficult for employees to work and they make decision to leave the organisation
which increases the cost of company in again hiring and recruiting the employees. From the
research it can be show that good working environment, safety, training and hygienic
environment is following by Londis organisation that can be considered as motivation. This
motivate employees to work efficiently and control the activities (Kim and et. al., 2019).
The another pay related motivation is bonus which is given by organisation to their
employees for their well performance which influences them to work and attain the business
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goals in changing environment. It is important for organisation to evaluate the employee's
performance and functions that states how they are working and completing task with minimum
risk which can influence the employees and increases their abilities to perform well. For
example, in Londis human resource management analysis the employee performance, build good
relations and offer the bonus which can help to motivate the employees and encourages them to
work more effectively (Duval and Pigeon, 2019).
Why circumstances tends to motivate employees
Motivation is the need of employees which is required to provide by management in
order to operate the business and complete the task timely. If employees are managing all
activities and receiving good benefits then it is considered as motivation. For organisation it is
important to have special knowledge and skills which can be used to motivate the staff and bring
improvements in workings. It is natural that every organisation is expects to connect their
performance with employees by using their skills in order to receiving payment for their work.
Employee who get ready to work have some expectation to get something in return for which
they are working which can help to develop the working and also fill employee's requirements. It
has analysed from research that employee who are working well, producing greater benefits for
company tend to get promote and motivated by using financial resources which increases their
satisfaction level and inspire them to work more. If goals and objectives of staff is clear then they
perform role and responsibilities accordingly that make easier working and helps to accomplish
the business goals.
In business environment, there are many factors and expectation which can be uses by
organisation to motivate the people who are working. Basically it has been study that employees
get higher motivation from pays and incentives which can improve the workings. In initially
organisation uses Maslow's theory to motivation in which manage fill all basic needs such as
physiological needs, safety needs, love and belonging, esteem and self actualisation which can be
motivate the employees up to limit by fill all requirements. But this theory is not beneficial for
all type of employees so it can be create challenges for organisation to motivate the people.
Londis is using Herzberg theory of motivation for motivating the staff and managing the
organisational performance effectively. This theory is also known as two factor theory that
contains motivation factor and hygiene factor for influencing the staff. In motivation factor,
achievement, recognition, responsibility, growth and advancement which are related to IPRP
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motivate the employees to work in good ways. On the other side, hygiene factors are
remuneration, relationship, supervision and companies policies which should be flexible and can
motivate the employees. This can help to manage all human resource and organisational
activities effectively by filling requirements and increasing performance.
Circumstances where it tends not to work so well and why
When the size of organisation is small and running at small level then it consume much
time and resources to give the ranking of employee performance which leads to demotivation. If
employee are receiving late feedback and motivation them they get disappointment resulting low
production and profitability. For example, employee of small organisation understand the goals
and complete their task which is assigned by management by making high efforts. But in this
case if they receive low increment in pay and salaries then it will not be considered in IPRP
motivation. This can lead the high level of dissatisfaction and reduce the organisational
productivity (Gupta and Ayles, 2019).
Moreover, if rewards system is insufficient and not rewarding the right people who had
efforts more then will not tend to work and motivation. In such circumstances, motivation do not
work so well which increases demotivation between employees who are working affected the
business activities negatively.
CONCLUSION
From the above report it can be concluded that there are some factor circumstances which
can be used to motivate the employee by using IPRP system and maintain the good performance
of staff. Maslow's theory is uses to fill the basic requirements of employees and Pay scale
motivational factors uses to give higher satisfaction which improve performance.
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REFERENCE
Books and Journal
Armstrong, M., 2019. Strategic human resource management. pdf drive. Com.
Collins, C. J., 2020. Expanding the resource based view model of strategic human resource
management. The International Journal of Human Resource Management, pp.1-28.
Hamadamin, H. H. and Atan, T., 2019. The impact of strategic human resource management
practices on competitive advantage sustainability: The mediation of human capital
development and employee commitment. Sustainability. 11(20). p.5782.
Gannile, C., Ab Yajid, M. S., Khatibi, A. and Azam, S. F., 2020. IMPACT OF
MEASUREMENT DRIVEN HR STATISTICS ON STRATEGIC HUMAN
RESOURCE MANAGEMENT FUNCTIONS ON ORGANIZATIONAL
PERFORMANCE IN INSURANCE INDUSTRY. European Journal of Social Sciences
Studies. 5(3).
Fadhil, A. S. H., 2019. Strategic human resource management and organisational performance:
an empirical examination of the relationship between high-performance work systems
and customer satisfaction in the sultanate of Oman (Doctoral dissertation, Brunel
University London).
Westerman, J. W., and et. al., 2020. Sustainable human resource management and the triple
bottom line: Multi-stakeholder strategies, concepts, and engagement.
Kim, T. Y., and et. al., 2019. Equal or equitable pay? Individual differences in pay fairness
perceptions. Human Resource Management. 58(2). pp.169-186.
Duval, F. and Pigeon, M., 2019. Individual loss reserving using a gradient boosting-based
approach. Risks. 7(3). p.79.
Gupta, N. and Ayles, H. M., 2019. Effects of pay-for-performance for primary care physicians on
diabetes outcomes in single-payer health systems: a systematic review. The European
Journal of Health Economics. 20(9). pp.1303-1315.
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