Significance of Performance Related Pay at Morrison's: Analysis

This report provides an in-depth analysis of the significance of performance-related pay in motivating employees, focusing on a case study of Morrison's. The study begins with an introduction outlining the background, aims, objectives, research questions, and rationale, emphasizing the importance of employee motivation in organizational success. It then delves into a literature review, exploring the role, merits, and drawbacks of performance-related pay. The research methodology section details the approach, philosophy, and design employed. The findings, analysis, and discussion chapter presents the results of the research, followed by conclusions and recommendations. The report highlights the role of performance-related pay in personnel management, its impact on employee motivation, and suggests strategies to enhance its effectiveness within Morrison's. The research uses both primary and secondary data sources, employing a thematic perception test to analyze the data and offering insights into the relationship between performance-related pay and employee motivation.

AN ANALYSIS INTO THE SIGNIFICANCE OF
PERFORMANCE RELATED PAY IN MOTIVATING
EMPLOYEES – THE CASE STUDY OF MORRISON'S

TABLE OF CONTENTS
CHAPTER 1 : INTRODUCTION..................................................................................................1
1.1 Background of the study.......................................................................................................1
1.2 Aims and objectives..............................................................................................................1
1.3 Research questions................................................................................................................2
1.4 Rationale of the study............................................................................................................2
1.5 Significance and scope of the study......................................................................................3
1.6 Structure of dissertation .......................................................................................................4
1.7 Research framework..............................................................................................................4
REFERENCES................................................................................................................................6

ACKNOWLEDGEMENT
I would like to thank my mentor for bottom of heart as they have provided me good
knowledge and effective support for conducting study effectively. I would like to express my
gratitude to friends, colleagues as well as family members who have guided me at every step of
thesis. Through their support I was able to accomplish my dissertation in an appropriate manner.
In the series I would also like to state special thanks to my team members who have assisted in
collecting data and in analyzing it further.

ABSTRACT
Performance related pay consists of the system in which organization pay to their
employees on the basis their performance and completion of targets. In the preset era,
motivational aspects of an employee’s play a vital role in achieving success in the competitive
business environment. In this, performance related pay system provides assistance to an
organization in developing motivation among their employees. The main objective of the present
study is to assess significance of performance related pay on employee motivation. In addition to
this, making assessment of the benefits and drawbacks of performance related pay is also the
main objective of research for the present study is conducted by researcher.
In order to assess the significance of performance related pay in the motivational aspect
of an employee’s researcher undertake qualitative investigation. Researcher has adopted
inductive approach and interpretivism philosophy to find out the suitable solution of problem.
For the present study, researcher has gathered data from both primary and secondary data
sources. Besides this, researcher have used thematic perception test to analyze the data gathered
by them. After making analysis of data it has been identified that performance related pay plays a
significant role in motivating employees. It can be concluded that performance related pay
system helps organization in build and sustain skilled or efficient employees for longer time
period.
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TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION....................................................................................................1
1.1 Background of the study...................................................................................................1
1.2 Aims and objectives.........................................................................................................1
1.3 Research questions...........................................................................................................2
1.4 Rationale of the study.......................................................................................................2
1.5 Significance and scope of the study.................................................................................3
1.6 Structure of dissertation ...................................................................................................4
1.7 Research framework.........................................................................................................5
CHAPTER 2: LITERATURE REVIEW.........................................................................................6
Role of performance related pay in the field of personnel management................................6
Merits and drawbacks of performance related pay in the context of employee motivation...8
Relationship between the performance related pay and employee motivation....................12
CHAPTER 4: RESERACH METHODOLOGY...........................................................................15
Research Type......................................................................................................................15
Research Approach...............................................................................................................16
Research Philosophy............................................................................................................17
Research Design...................................................................................................................18
CHAPTER 4 : FINDINGS, ANALYSIS AND DISCUSSION......................................................1
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS...................................................14
REFERENCES..............................................................................................................................20
Questionnaire.................................................................................................................................23
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CHAPTER 1: INTRODUCTION
1.1 Background of the study
In the present era, success of an organization is highly dependent upon the skilled and
efficient workforce. Employees are the main asset of an organization who plays an important
role in the organizational growth and development. Each and every organization requires highly
skilled and motivated workforce who help them in build or sustain competitive position over
others (Kvaløy and Olsen, 2015). Nevertheless, large number of enterprises is facing the problem
of less involvement of their employees in business activities and functions. This problem occurs
due to high level of decrease in the employee motivation and morale. In order to increase or
boost up the morale and motivation level of employees several companies had undertaken
different motivational tool. It includes financial and non-financial tools which provide assistance
to an organization in increasing the morale of their employees.
In this regard, it has been identifying that performance related pay plays a significant
role in the motivation level of employees. In performance related pay business units evaluate the
performance of their employees on the basis of predetermined aspects through which employees
are also aware (Lazaroiu, 2015). The present research is based upon Morrison which is largest
multinational retailer of UK. Morrison offers payment to their employees by taking into
consideration their performance and abilities. Thus, the present research study will helps in
assessing the significance of performance related pay into the motivation level of an employees.
Besides this, this research will also provide understanding about positive and negative
implication of the performance related pay on the motivational level of employees. Thus, this
research study will provide framework to business units in relation to the factors which play vital
role in boost up the morale and motivational level of an employees.
1.2 Rationale of the study
What is the research issue?
In the present era, large number of organizations is facing the problem of employee
retention. One of the main causes behind such issue is that organization fails to link monetary
benefits with employee motivation. Employee satisfaction and motivation is the most essential
element which helps in retaining the employees within the firm for long time. This, employee
retention and the awareness in relation to performance related pay is considered as an issue.

Why is it an issue?
Employee motivation and morale is highly associated with the productivity as well as
profitability aspect of the firm. Thus, high level of decrease which takes place in the motivational
level of employees is the most important issue in the present time. Moreover, employee
motivation has high impact upon their satisfaction level, absenteeism, turnover and profitability
aspects. In the present scenario, there is significant decrease in employee productivity and
efficiency so it is considered as most important issue.
Why is it an issue now?
Employee motivation is the most important aspect in now days because survival of an
organization is highly associated with such aspect. In the competitive business environment
company can attain success only when they have skilled and motivated workforce. Thus,
employee motivation is the most significant issue in today's business arena.
How and when it is going to be investigated?
The detailed investigation will be carried out by researcher in relation to the wide range
of factors which are associated with employee motivation and performance related pay. Through
this, researcher is able to frame the suitable strategies which help business units in raising the
level of employee motivation.
What could this research shed light on?
The present research study will shed light on the performance related factors which help
in managing the personnel of an organization more effectively. Besides this, it will also examine
the positive and negative consequences of performance related pay on employee motivation.
Through this, researcher is able to find out the factors which assist business units in increasing
the motivational level of their employees. Further, the present research study will help in
identifying relationship which exists between performance related pay scheme and employee
motivation.
1.3 Aims and objectives
Aims and objectives are the main part of the research study which helps researcher in
conducting research study in the right direction (Ongalo and Tari, 2015). In this, the researcher
aimed at assesses the impact of performance related pay upon the motivation level of human
resource of an organization. Further, objective of the research study are enumerated below:
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 To assess the role of performance related pay in personnel management.
 To identify the merits and drawbacks on performance related pay which has influence
upon the motivational level of employees.
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 To evaluate the interrelationship between performances related pay and employee
motivation or morale of Morrison's.
 To recommend the ways or suitable strategies which helps Morrison in increase the
effectiveness of performance related pay.
1.4 Research questions
In order to find out the suitable solution of research problem researcher needs to prepare
questions. Researcher will prepare following questions which helps him in conducting the
research study in efficient manner.
Q. 1 what is the role of performance related pay in the field of personnel management?
Q. 2 what are the merits and drawbacks of performance related pay in context of employees’
motivation?
Q. 3 define the relationship between the performances related pay and employee motivation?
1.5 Significance and scope of the study
The present research study and its findings are highly significant for the companies who
are facing the problem of employee motivation. Through such study researcher is able to assess
the factors which have high level of influence upon the motivational aspects of service
personnel. Usually, motivated employees are highly productive as compared to de-motivated
employees. In addition this, employee productivity, absenteeism and efficiency level is closely
linked with the motivational level of employees (Bellé, 2015).
Moreover, employee motivation highly affects both the productivity of an organization or
of employees as well. Thus, by undertaking performance related pay scheme companies can
easily improve the level of their employees. By setting the different dimensions company can
make payment to their employees on the basis of their skills and performance. Through this
system each and every employee makes efforts to perform their work and activities in an
efficient manner to get the financial appraisal and high basic pay (Ljungholm, 2015).
Nevertheless, performance related pay also places negative impact upon the motivational aspects
employees. If employees are unaware from the dimension which is set by an organization for
financial appraisal and basic pay then it adversely affects the morale of the employees. In
addition to this, it also may create conflicts among the personnel of the firm and there by
negatively affects the motivational aspect of the employees. Thus, the present study will help
researcher in presenting the suitable factors which help companies in evolving the satisfaction

among the customers (Han, Bartol and Kim, 2015). Through this, business unit is able to build
and sustain their employees for longer duration.
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1.6 Structure of dissertation
Chapter 1: Introduction
In introduction researcher will provide the background of the research study. Besides
this, he also states the rationale which present the reasons due to researcher have selected the
topic of research as an issue.
Chapter 2: Literature review
In the second chapter of research, researcher will critically evaluate the secondary data
sources such as books, journals and research papers. It will provide deeper insight to the
researcher about the benefits and drawbacks of performance related pay on employee’s
motivation.
Chapter 3: Research methodology
It includes the types of investigation which will be carried out by the researcher in their
study. Besides this, it also entails the sampling and data collection methods which researcher will
undertake to conduct research in an effective manner.
Chapter 4: Data analysis
In chapter 4, researcher will analyze the data by making use of appropriate data analysis
technique. It is the most important section of research study which entails the outcome of
research study.
Chapter 5: Conclusion and recommendation
In this section, researcher will conclude the findings of the research study. In this,
researcher will provide information about the extent to which performance related pay have an
influence upon the motivational level of employees. Along with it, researcher will also give
suggestion about the ways through which companies can motivate their employees and their
maximize employee productivity.
CHAPTER 2: LITERATURE REVIEW
Literature review may be defined as a process in which review of secondary sources such
as books, journals and research paper are undertaken by the researcher. By making analysis of
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secondary data sources researcher is able to represent the fair view of researcher topic or
problem. It provides assistance to researcher to evaluate the current findings and there by
represent the appropriate solution of the research problem. In this literature, significance of the
performance related pay in the context of personnel management will be analyzed. In addition to
this, the present literature also helps in assessing the benefits and drawbacks of performance
related pay. Through this, researcher is able to make analysis of result of the survey in an
effectual manner.
Role of performance related pay in the field of personnel management
Performance related pay may be defined as a system in which employer make payment of
wages to their workers as well as salaries to employees on the basis of their skills and abilities
that how they works. In this system employer sets standard and there by evaluate performance of
the employees on the basis of such standards. Through this, employer or company is able to
assess the effectiveness of their employees and thereby give them monetary rewards on the basis
of this aspect. According to the view point of Han, Bartol and Kim (2015) performance related
pay is not only limited to financial reward but also it is highly associated with the non-financial
rewards such as reward, recognition, promotion etc. As per the view point of Layton and Ryan
(2015) there are several reasons or aspects due to which manager of an organization is attracted
to introduce performance related pay system within the business unit. This system provides
assistance to HR manager of an organization in recruit and selects the skilled and efficient
personnel. Besides this, it also helps in weaken the power of trade union. For instance: When
enterprise makes payment to workers or employees on the basis of their skills and abilities then
they are very less scope for trade union. Moreover, in performance related pay system each
employee gets different pay on the basis of his work or efficiency level. Thus, by limiting the
role of trade union within the business unit can easily introduce change and thereby take benefit
from it. Performance related pay system also ensures financial control and value of money by
giving salary to their workers on the basis of their skills and abilities. Through this, organization
is able to make optimum utilization of their financial resources to the large extent and there by
achieving success in the dynamic business environment.
Saint-Lary and et.al, (2015) claimed that there are mainly two types of performance
related pay namely merit pay and incentive pay. Merit pay consists of the increment which
organization make in the salary aspect of the employees by taking into consideration the
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