Strategic Human Resource Management Assessment 1 Report

This report, a Strategic Human Resource Management (SHRM) Assessment 1, examines individual performance-related pay (IPRP) and its impact on employee motivation, productivity, and loyalty within the context of Bright Star Financials. The report defines IPRP, discussing its implementation through short-term and long-term schemes, and how it can motivate employees to achieve organizational objectives. It explores the circumstances under which IPRP is effective, such as when equity and communication are prioritized, as well as situations where it may not be suitable, like when employees prioritize work-life balance or when teamwork is essential. The report concludes that while IPRP can be a beneficial compensation strategy, it's crucial for organizations to consider its potential drawbacks, such as the focus on quantity over quality and its limited applicability to teams, to ensure its effective and ethical implementation for long-term success. References to academic journals and books support the analysis.

Strategic Human resource
Management
Assessment 1

Table of Contents
INTRODUCTION...........................................................................................................................1
ASSESSMENT 1.............................................................................................................................1
Individual performance related pay.............................................................................................1
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Human resource management is about managing people in the organisation in order to
accomplish its objectives. It helps organisation for hiring efficient people for completing tasks
effectively and efficiently. Human resource management is the process for recruiting, training and
development, inducting, orientation, motivation, compensation etc. HRM helps organisation for
managing right people at the right time at the right place. HRM makes plans for organisations for
making strategies and retaining employees. Strategic human resource management is the future
oriented process for developing and implementing HR programs. It has various functions includes
planning, organising, analysing, controlling, managing human resource for the company. It helps
for linking human resource functions with organisations strategic objectives. Human resource
makes planning for managing people, motivating them, compensate them in order to accomplish
organisations objectives. The company which is selected for this report is Bright star financials. It is
the financial distributor who specialists in residential mortgages (Bright Star Financials, 2020). It
was founded in year 2011, headquarter situated in UK. Since its establishment, the entity have
originated around £ 3 Billion in specialist to lend across key disciplines of commercial finance,
residential mortgages, unsecured loans, second charge mortgages, development finance, later life
lending and many more.
This report covers topics such as performance based payments makes employees motivated,
helps in encouraging their performance. Apart from this it also covers topics such as strategies and
approaches for the newly internationalising organisation, challenges employees faces when working
abroad, HR practices for coping these challenges for being successful.
ASSESSMENT 1
Individual performance related pay
Individual performance related pay could be depicted to a way of pay or compensation
management that is linked with salary progression to assessment or evaluation of individual
performance which is generally measured against set objectives (Parkinson 2019) . In other words,
Performance related pay refers to a process of giving salary to employees on the basis of their
performance. For example, if any employee performance is better than another firm gives higher
salary to those employees. Performance based method is the compensation method which includes
paying employees according to their works. In this types of method employees are paying on the

basis of their skills. Performance based salary helps firms for encouraging employees so that they
can If someone has more ability than another employees, firms pays higher for those. It is about
getting extra salary for their better performance. It is the process for paying additional
compensation to employees which are performs additional to their job requirements. Within Bright
star financials, Individual performance related pay is effective means to provide manpower
incentives for harder work. Through this, the managers are able to give individual employees with
monetary rewards which are linked with assessment of their contribution or work performance
including sales commission, piecework payments, bonuses to reach targets addition to financial
profit sharing.
In an organisation, there are various kinds of individual performance related pay which are
used by employers. In context to Bright Star Financial, short term schemes as well as long term
schemes are preferred to pay employees as per they perform. Short term schemes are termed to
schemes in which superiors uses commissions or bonuses for sales attained addition completed
work (Fuller and Cooke, 2018). The purpose to use this kind on Bright Star Financials is to provide
accurate incentive to employees that motivate them to improve their performances. At same time,
long term schemes are schemes that are used to boost loyalty in workforce towards the entity. It is
done through offering share options or alternatives for certain staff members.
Performance based pay motivates them for doing their tasks. Money is the essential
requirement in today's time which helps employees for working efficiently. If company pays higher
for their performance they contribute in betterment for company. For Bright Star Financials,
individual performance based pay is highly effective strategy in order to increase motivation for
employees. Financial rewards is the things which motivates employees, it will helps them for doing
their tasks. It will enhance productivity, efficiency, loyalty of employees. It motivates others for
doing better for earning higher salary. Every company wants to improve employees performance,
employees wants to increase their salary. When the company makes compensation plans, pays for
performance based it leads for low achievers in order to gain less and it helps for higher achievers
for more productivity (Isimoya, Olajide and Onafalujo, 2018). It demotivated those employees who
are not performance well. Higher the results means higher productivity for employees. Employees
plays vital role for organisations, if they are motivated it will helps firms for enhancing its
performance. If people earns extra salary it will human resource management for retaining them for

the organisations. Employees turnover is important for firms, it helps it to accomplish its objectives
effectively and efficiently.
Individual performance based pay stimulates higher performances from employees as it
helps manager of Bright Star Financials to obtain clear understanding about behaviours or
perception of employees so that they are able to act as building blocks for wider and effective
teams. It helps managers to recognise outstanding performances and it also provokes strong
together with unique dialogue among employees to that of superiors that fosters or stimulates high
performance levels among workforce. For example, use of short term and long term schemes
motivates work contribution of each manpower to business objectives. It influences their needs and
encourages them for attain expected pinnacles of their job (Jiang, Zhao and Ni, 2017). Moreover,
rewards as well as bonuses performs key role to meet social together with self esteem needs of
employees that results in performing with determination to show higher performance levels.
Within an company, there are certain circumstances in which individual performance related
pay motivates staff. In case of Bright Star Financials, one of circumstance is where efficiency and
equity of people are highly observed by the firms as it helps in motivating employees in an proper
manner and also distribute rewards in an efficient manner so that the objectives can be achieved
easily. The situation in which equity is enhanced employees they have same value in organisation
which affect them directly and communication gap is removed properly and demotivation factors is
also removed (Park and Conroy, 2020). Bright star company should motivate the employees and
help in doing the proper communication with them so that they are motivated and achieve the task
in an proper manners and helps in targeting the goals properly in an organisation. Financial reward
are visible in this the company disclose the financial rewards which helps them in motivating
employees in an proper manner so that they can do work more efficiently.
When work load is high then also the employees perform better in worst situation they gave
there full output so that they can perform better in an organisation. The awards should be given to
employees in proper manner according to there needs which helps in accomplishing the task. Bright
start company should visible there rewards so that they can perform better in an organisation and
helps in achieving the task in an proper manner so the the efficiency of the company will increase.
Compensation decisions are reversible so that the every person in organisation should get the
chance to receive the award the same person will not get award in an repetitive manner which
demotivate the other employees and helps in removing efficiency which affects the business. This

helps in increasing the motivation of the employees to perform better in an organisation and helps
in achieving the task in proper manner and helps in accomplishing the goals. Bright star company
should take the proper decision regarding the compensation so that the every person will get the
opportunity to perform better and helps in motivating them in a proper manner so that task will also
accomplished easily in the organisation.
There are certain circumstances in which Individual performance related pay not work well.
is explained as the way of motivating employees whose work is reached a required standard. It also
helps in maximising the performance of the employees which makes direct impact on the
performance and productivity of the organisation. Individual performance related pay has grown in
recent years as it helps organisation in motivating their employees to perform well and also
motivates employees to perform effectively as it helps them in getting the rewards and benefits. It
helps in improving the productivity of the individual employee and it helps arises healthy
competition among the employees to work hard towards achieving the goals and objectives. It won't
work in the situation where employees just want to enjoy their work and care about their own well-
being. This concept won't work when the employees feels more pressure on their shoulders due to
which employees morale starts breaking and extra rewards and incentives then won't help in
boosting their morale once it was broken due to extra pressure. It includes examples such as profit
sharing, bonuses, sales commission and rewards. Moreover, the other situation wherein individual
pay compensation do not work is team work as in this all the incentives are to be divided among
team members because of which incentives are paid to whole team as per team work despite of
individual performances or efforts. It helps organisation in retaining the top employees because
skilled employees are considered as the asset for the organisation. It helps in making the
relationship between the performance of the employees and rewards and helps in developing the
environment of the organisation which focuses on the high performance. It helps in boosting the
morale of the organisation which results in boosting the performance and profits of the organisation
(Unger, Szczesny and Holderried, 2020). IPRP does provides efficiency and loyalty but it is only
for the short- term and not for long-term. Bright star financial limited goals and objectives for long-
term and IPRP is only applicable for short-term. It also affects the quality of work because
employees will be more focused on getting the work done and it results in employees focusing on
the quantity over quality. Bright star financial limited have to make sure that the individual
performance related pay won't affect the nature of their business because IPRP can make the

business of bright star toxic which can affect the organisation goodwill in the market. IPRP also
doesn't apply on the team and groups as it is very hard to reward the individuals in a team for
achieving their goals because in the team every individual contributes equally and rewarding any
individual in the team will result in the conflict among the employees and team members. There is
high risk in using IPRP and can also results in the business failure when the management is
working on performance related pay scheme.
CONCLUSION
From the presented information, it have been concludes that key role that strategic human
resource management plays in an organisation is to set individual performance based pay which is a
compensation that is tied with contributions of employee in attainment of business objectives. It is
one of great compensation form as it is double edge sword which influence managers and
employee both to to perform well. It provides management and workforce an incentive for the
purpose of improving efficiency as well as productivity that results in lowering costs with
remaining profitable. With this, organisational administrators gives staff a feeling for being tied to
fortunes that makes working easier to focus on cost cutting measures. Moreover, it also motivates
morale and performance levels and loyalty of employees. There are various circumstances wherein
individual performance related pay motivates manpower and many of situations in which it do not
work so well.

REFERENCES
Books and Journals:
Al Rashdi, M., 2020. The impact of performance-related pay on employees’ performance: case
studies of Omani public and private sector organisations.
Fuller, S. and Cooke, L. P., 2018. Workplace variation in fatherhood wage premiums: Do
formalization and performance pay matter?. Work, Employment and Society. 32(4).
pp.768-788.
Isimoya, O. A., Olajide, O. T. and Onafalujo, A. K., 2018. Performance Related Pay and
Organizational Commitment–evidence from Nigeria. Journal of Economics &
Management. 34. pp.58-80.
Jiang, W., Zhao, X. and Ni, J., 2017. The impact of transformational leadership on employee
sustainable performance: The mediating role of organizational citizenship
behavior. Sustainability. 9(9). p.1567.
Park, S. and Conroy, S. A., 2020. Unpacking the evolving process of pay-for-performance system
implementation. Human Resource Management Review, p.100794.
Unger, O., Szczesny, A. and Holderried, M., 2020. Does performance pay increase productivity?
Evidence from a medical typing unit. Management Accounting Research. 47. p.100649.
Online:
Bright Star Financials. 2020. [Online]. Available through: <https://brightstarhub.co.uk/>
Parkinson. C., 2019, What is Performance Related Pay. [Online]. Available through:
<https://croner.co.uk/resources/pay-benefits/employee-incentives/introducing-
performance-related-pay/>
(Al Rashdi, 2020) (Fuller and Cooke, 2018) (Isimoya, Olajide and Onafalujo, 2018) (Jiang, Zhao
and Ni, 2017) (Park and Conroy, 2020) (Unger, Szczesny and Holderried, 2020)
(Parkinson 2019) (Bright Star Financials. 2020)