HRM742: Improving Organizational Rewards Plan with OB Theories

This report provides a detailed analysis of an organization's rewards plan, encompassing compensation, value-added benefits, work-life plans, performance recognition, and career development. It examines the purpose of each element in driving employee motivation and retention. The report evaluates the effectiveness of the rewards plan using Maslow's Hierarchy of Needs Theory, highlighting how different components fulfill various levels of employee needs. Recommendations are offered for continuous improvement and flexibility in the rewards plan, emphasizing the importance of addressing issues promptly. Specific suggestions are provided for the Wilson Bros case, including designing a satisfactory compensation plan, implementing an adequate performance appraisal system, and incorporating tools for work-life balance, performance recognition, and career development. This analysis is designed to help organizations create more effective and motivating rewards systems.

HRM742
Individual Assignment 1

Table of Contents
1. Organization’s rewards plan........................................................................................................3
2. Purpose of the organization’s rewards plans...............................................................................3
3. Effectiveness of the rewards plan using OB theory.....................................................................3
4. Recommendations to improve rewards plan................................................................................4
5. Recommendations for Wilson Bros Case....................................................................................4
References........................................................................................................................................5

1. Organization’s rewards plan
The organization’s rewards plan typically consists of several elements as briefly described
below:
Compensation: Compensation includes a fixed pay or the basic pay, result oriented variable pay
according to the performance and other incentives like stock options, bonus etc.
Value-added benefits: Various value-added benefits are provided such as health and insurance
plans, retirement plans etc.
Work-life plans: Other benefits like work from home opportunity, flexible time and paid time
off are provided.
Performance recognition: Various rewards such as retirement, peer recognition, employee of
the year etc. comes under performance recognition plan.
Career development: It includes succession planning, training and skills development programs
to develop career’s future prospect (Noe, 2017).
2. Purpose of the organization’s rewards plans
Each element of the total rewards plan is expected to derive certain perceived value.
Compensation is the pay strategy that provides incentives for the job and encourages employees
to perform their job as expected. Good compensation package helps in increasing employee
retentions while performance-linked variable pay encourages them to put extra effort in job.
Value added benefits are designed in a way that expand the overall offerings of the organisation
which helps in attracting best talent while recruitments (Shields, et al., 2015). Organization helps
employees to improve work-life balance with work-life plans. Performance recognition is a tool
to increase employees’ morale and motivate them to increase performance and loyalty to the
organization. Career development plans not only help the individuals to develop their skills to
increase future prospect of the career but also helps the organization to grow the talent pool
(Bradler, et al., 2016).
3. Effectiveness of the rewards plan using OB theory
Maslow's Hierarchy of Needs Theory suggests that employees are motivated to satisfy five basic
needs arranged in a hierarchy and that they expect them to fulfil in the workplace in that order. If

the compensation plan has adequate wages and stable income, employees’ physiological needs
can be fulfilled. Value added benefits such as pensions, health insurance are instrumental in
fulfilling security needs. Work-life balance plans helps to fulfil belongingness needs with social
acceptance in family and society. Esteem needs are related to positive self-image which comes
from respect and recognition plans. Self-actualization needs are related with achievement issues
and are fulfilled using career development plans (Tahir & Iraqi, 2018).
4. Recommendations to improve rewards plan
The rewards plan should be continuous developed and should be flexible to fix issues related to
rewards and recognition. It is recommended for organisations to not wait for annual reviews
while implementing rewards plan instead management should be in continuous touch with
employees and any issues should be fixed as they are identified.
5. Recommendations for Wilson Bros Case
Following recommendations are suggested to improve the pay strategy of Wilson Bros:
 Satisfactory compensation plan should be designed considering pay equity.
 Adequate performance appraisal plan should be in place based on having continuous
communication with employees to address performance issues.
 The rewards plan should also include suitable tools under work-life plans, performance
recognition and career development.

References
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill
Education.
Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P., ... &
Plimmer, G. (2015). Managing employee performance & reward: Concepts, practices,
strategies. Cambridge University Press.
Tahir, K. H. K., & Iraqi, K. M. (2018). Employee Performance and Retention: A Comparative
Analysis of Theory X, Y and Maslow’s Theory. Journal of Management Sciences, 5(1),
100-110.
Bradler, C., Dur, R., Neckermann, S., & Non, A. (2016). Employee recognition and
performance: A field experiment. Management Science, 62(11), 3085-3099.