Strategic Human Resource Management Report: IPRP and ALDI Performance

This report examines the role of Individual Performance Related Pay (IPRP) in stimulating better performance within ALDI, a UK-based retailing company. It begins by introducing the concept of strategic human resource management (SHRM) and the importance of IPRP in motivating employees. The main body critically evaluates how IPRP can enhance performance by linking pay to individual achievements, fostering a positive work environment, and providing feedback. It also explores the circumstances under which IPRP is most effective, such as when employees receive training and opportunities for advancement, as well as the situations where it might not work, including instances of demotivation, discrimination, and economic downturns. The report concludes by summarizing the benefits and limitations of IPRP in driving employee performance, emphasizing the need for fair and equitable implementation to maximize its effectiveness within the organization.

Strategic Human
Resource Management
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Table of Content
Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
Main Body.......................................................................................................................................3
Critically evaluate the extent to which IPRP can stimulate better performance.........................3
Under what circumstances employees would motivate their employees and why and in what
circumstances it tends by not working properly..........................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
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INTRODUCTION
The human resource management play a vital role in an organisation as it performs
numerous functions such as recruitment, selection, training and development of an employee
which ensure a vast growth in an organisation (Amarakoon and et. al., 2018). In simple words,
Strategic human resource management involve the preparation of a strategy which ensure that
they could hire the best and talented workforce which maximise the efficiency of a firm as it
assists in attainment of business objectives within a short span of time. This report is based on
ALDI which is a renowned popular retailing company in UK as it deals with different varieties
of merchandise such as groceries, food products and other household essentials. This company is
propounded by Karl and Theo Albrecht in the year 1946 as it has expanded its operations in
different parts of the country so as to gain maximum exposure of customers across the globe.
This report is based on IPRP which stimulate employees to contribute towards high performance
as it provides several ways to enable sustainable growth as it helps in accomplishment of
business objectives in a limited time.
Main Body
Critically evaluate the extent to which IPRP can stimulate better performance
Performance related pay is a term that is associated with different types of pay by judging
the performance of individual which provide better sustainability (Armstrong, 2019). There are
different schemes that are launches so as to appraise the efforts of individual’s in a workplace as
there is a linkage between the payment as well as performance. In such a competitive era,
business enterprise tries to provide better compensation benefits and monetary incentives so as to
live up to the expectation of employees.
The IPRP proves to be advantageous in a modern era as it is provided on the basis of
subordinate’s performance which improve the overall effectiveness and thus provide a greater
degree of accuracy by setting proper standards. The manager of ALDI would tend to motivate
and inspire the performance level by meeting their expectation by providing more pay to them as
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performance related pay would promote better and fair understanding of task which provide a
way to deal with fair and efficient management.
The senior authority of ALDI would create a positive environment by creating an utmost
satisfaction as it would emphasise on providing efficient reward system which enhance the level
of productivity (Bailey and et. al., 2018). The manager of a respective firm emphasises on
ensuring healthy environment in a workplace so that as it make necessary modification and
communicate about such changes among them so that they should be ready to accept it without
any hesitation. The management must ensure that it should fulfil the demand and needs of their
staff in order to improve their motivation level as it contributes towards higher performance.
Feedback play a vital role as it aid employees to realise their mistakes so that they could make
further improvement and thus result in excellence performance. But if they determine their
loopholes then they would feel irritated and create a sense of discomfort among them and thus
decline their overall performance aspect. Better and excellent communication among them would
aid in facilitating smooth operations of a business and help in attainment of targets on a timely
basis as this ensure more sustainable growth in retailing sector.
It is necessary that performance of employee could be evaluated on the basis of their
rewards and bonus which assist in achieving desirable outcomes and make them feel delighted in
a respective place (Bratton and Gold, 2017). The PRP system would enhance the motivation
level of employees so that they could work in an efficient manner and as this improvised the
motivation level of staff which in turn maximise the overall efficiency. The performance of staff
in ALDI is monitored and redesigned so that their performance could be enhanced as they would
achieve their targets in a predetermined manner. The senior authority of ALDI would encourage
their colleagues by implementing equal distribution in pay system and provide extrinsic rewards
to them which maximise their satisfaction level and enhance desired performance. Also, the
manager tends to ensure that it could provide both intrinsic and extrinsic rewards among their
staff so as to generate more productivity and facilitate proper coordination and cooperation
which create a positive atmosphere in company like ALDI. PRP is a most appropriate method
which assist employees to improvised their performance level as they would work hard by
reaching the targets as early as possible.
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Under what circumstances employees would motivate their employees and why and in what
circumstances it tends by not working properly
It has been analysed that the manager of ALDI emphasises on improving the performance
of their staff by rendering them with specialised training to them in order to accelerate their
knowledge level which inculcate confidence and determination among them. The employees in a
respective who provides best performance would get a chance to ensure greater success in their
career as they would get promotion or transfers (Brewster and Hegewisch, 2017). Other benefits
like monetary benefits and incentives are provided among employees so that they could reach
their potential in a short span of time. The senior manager of ALDI monitor and review the
performance of their subordinates by comparing the actual performance against set standards and
if it found any sort of deviations then it would take immediate corrective action which help in
achievement of predetermined goal in a shorter time. Also, they judge the accuracy of standards
by making best utilisation of resources such as manpower, material and machines so as to get
desired level of output. This determine the performance of individual by taking several factors
into consideration individual differences, type of occupation and so on. Motivation involve the
stimulation among the people so that they could contribute their best in a workplace so the
management of ALDI would tend to satisfy their employees as it has direct impact on
productivity as well as efficiency. It also emphasises on inspiring them so that the subordinates
of a concerned firm would work with zeal and enthusiasm so that they could produce extra
efforts and result in best performance which in turn accelerates greater productivity.
Motivation could be classified as intrinsic and extrinsic motivation in which the former
emphasises on rendering value among the staff as it is specified in terms of recognition,
responsibilities and on the other hand the latter focus on rewards system as salaries as well as
bonus are examples of it (Chelladurai and Kerwin, 2018). If the staff of ALDI would work with
greater efforts as it is clearly reflected in its hard work which ensure maximum efficiency and
sustainability in a long run and as persistence could be attained if they constantly do hard work
which could be depicted on the basis of reflection of results. The manager of ALDI also
appreciates their performance and tends to influence the behaviour and attitude of subordinates
so that their performance could be appraised as it provides direct effect on performance which is
related to pay. The contractual agreement is among employer and employees so that all the terms
and conditions are stated on it so that there is no sort of confusion and misunderstanding among
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them. The senior authority of ALDI believes that employee motivation would be enhanced if
there is an increase in salary as this aid in retaining them for a longer time period (Stewart and
Brown, 2019).
Individual performance related pay (IPRP) is designed in such a manner like which pull
subordinates to improve their performance by utilising their strength and eliminating their
weakness so that this could enhance their overall performance and produce maximum level of
output. This help in realising the workers about the power gaps and they are also aware of the
merit pay so they forget about innovation as well as creativity as they tend to jut focus on aspect
on the basis of which pay depends upon. Sometimes, employees of ALDI emphasise on working
only on rewards basis as they prefer more simplicity plus predictability so that their performance
is not hampered. If they are not paid salary that what they expected then it results in minimising
the productivity and they would not attain the targets within set time frame and their competitive
advantage would be affected (Meyer and Xin, 2018). The top management of ALDI take care
that they would pay their employees in a fair manner so that they would not feel dissatisfied as
pay is on the basis of performance and responsibilities that are assigned to them. Equal in pay
promote a good atmosphere which maximise the overall efficiency and enable them for higher
performance as a result improve their satisfaction level.
The manager of ALDI should emphasise to distribute rewards and recognition among
their staff in a fair and equitable manner and also their view and opinions must be considered so
that they could feel worth in an organisation which accelerates efficiency and would set
standards that tends to improve their performance level. The must be rewards and recognised for
their efforts in a best possible manner so that they could contribute towards the set standards as
this motivates them through the performance related pay. The senior authority of ALDI tends to
disclose the amount of compensation to them so that fairness could be depicted. According to
research, if employees are not rewarded for their performance this would not develop enthusiasm
in them and thus create boredom and dissatisfaction among them. Also, it has been analysed that
the standardised income of UK is approximately £29,600 and in case of retailing company
especially in ALDI it is about £20,600 which is based on average salary (Mondy and
Martocchio, 2016). The concept of IPRP is underlying on individual based performance so that
employee would be engaged and thus would accelerate desired level of output.
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The IPRP does not work well due to the reason that employees may feel demotivated and
thus affect their overall performance as there are several reason that employees might not
perform well such as inefficient management, underestimation of teamwork as it affect them and
minimise the level of productivity and lead to delay in decision making. In case of retailing
company like ALDI as it incurs it greater time as well as resources while rating employees which
create disappointments among them. In such a situation, Performance Related Pay play a crucial
role which determine the efficiency but at the same time it becomes ineffective that result in
negative consequences. There are several employees in ALDI who work to their greater potential
and efforts which results an increase in minimal pay and even they tend to quit in an unavoidable
circumstance (Nankervis and et. al., 2019). This create demotivation and affect their overall
performance which reduces effectiveness within the confines of retailing sector.
Another most significant reason of this is discrimination which is faced by the company
on the basis of staff as partiality is there in terms of pay as pay vary according to their level
which create utmost dissatisfaction among them. Other reasons like when there is downsize in
economy or in case of depression there is a huge difference in pay system and in case of inflation
the pay system seem to be little as there is just little impact on salaries of employees. When
rewards are not delivered to an appropriate person in case of ALDI, this discourage them and
thus lead to poor performance as it declines their morale. Dissatisfaction among the subordinates
would greatly affect the overall organisation goal and thus minimise the level of efficiency in
case of retailing sector.
CONCLUSION
From the above information, it can be comprehended that human resource management is
considered as worth to an organisation that ensure prosperity of success as it tends to motivate
among team members and stimulating them so that their task could be attained in a proper period
of time. Various factors such as core competencies, culture values, nature of industry and type of
employees would determine the efficiency and effectiveness of a firm which maximise the level
of productivity. As it has been analysed that the performance of an individual is worth as it helps
in shaping a better personality and reflect a success in their career.
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REFERENCES
Books and Journals
Amarakoon, U. and et. al., 2018. Learning capabilities, human resource management innovation and
competitive advantage. The International Journal of Human Resource Management. 29(10).
pp.1736-1766.
Armstrong, M., 2019. Strategic human resource management. pdf drive. Com.
Bailey, C. and et. al., 2018. Strategic human resource management. Oxford University Press.
Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.
Brewster, C. and Hegewisch, A. eds., 2017. Policy and practice in european human resource
management: The Price Waterhouse Cranfield survey. Taylor & Francis.
Chelladurai, P. and Kerwin, S., 2018. Human resource management in sport and recreation. Human
Kinetics.
Meyer, K.E. and Xin, K.R., 2018. Managing talent in emerging economy multinationals: Integrating
strategic management and human resource management. The International Journal of
Human Resource Management. 29(11). pp.1827-1855.
Mondy, R.W. and Martocchio, J.J., 2016. Human resource management. Pearson.
Nankervis, A. and et. al., 2019. Human resource management. Cengage AU.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2018. Fundamentals of human resource
management. McGraw-Hill.
Stewart, G.L. and Brown, K.G., 2019. Human resource management. John Wiley & Sons.
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