Strategic Human Resource Management: Performance-Related Pay Analysis

This report provides a comprehensive analysis of individual performance-related pay (IPRP) within the context of strategic human resource management, using Debenhams as a case study. The report critically evaluates the extent to which IPRP stimulates higher levels of employee performance, exploring the circumstances in which IPRP motivates employees and the reasons behind its effectiveness, as well as the scenarios where it may not be as successful, and the underlying causes. The report delves into the benefits of IPRP, such as increased productivity and employee motivation, while also acknowledging potential drawbacks, including issues of fairness, demotivation, and the impact of managerial biases. It also examines the importance of communication, feedback, and the overall design of pay schemes in achieving the desired outcomes. The report concludes by summarizing the key findings and offering insights into the effective implementation of IPRP within organizations, emphasizing the need for a balanced approach that considers both the advantages and disadvantages of this management strategy.

Strategic Human
Resource Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Critically evaluate the extent to which individual performance related pay can stimulate
higher levels of performance from employees............................................................................1
In what circumstances IPRP tends to motivate employees and why, and in what circumstances
it tends not to work so well and why?.........................................................................................3
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The strategic human resource management is a process that is used and designed by the
company so as to meet up the better requirements and demand of the marketplace. It includes the
basic detailing that has direct impact on the employees performance and productivity as like
hiring, firing, pay, administration, benefits and training (Amarakoon, 2018). The strategic
management is a process that is used to make better connection in between the human resources
and its objectives as well as goals. It is also being used to advance the working level so that
moderate flexibility and higher competitive advantage so as to manage and control the working
culture and behaviour in improvised manner. The following report is based on Debenhams that is
the British multinational retailer and have operate its business within the departmental stores in
UK and Denmark along with this having franchised stores in other countries as well. The report
includes individual performance related pay that is stimulated the higher level of performance of
employees and circumstances that motivate employee's.
MAIN BODY
Critically evaluate the extent to which individual performance related pay can stimulate higher
levels of performance from employees.
The performance related pay (PRP) is a method that has describe different aspect of
managing the pay that is associated with the progression of salary and based on the assessment of
individual performance (Performance-related pay, 2019). There are potential issues that is
developed and addressed as per the implementation of different schemes that is used by the
company as in order to explore the adequate linkage in between the payment and performance. It
is based on the overall aspect of line managers, distribution of rewards, measuring performance
and the different impact of employee and its behaviour. There is fierce competition within the
marketplace and it is also being emerged with the nations and also reflects the potential
employee and an attractive organisation (Armstrong, 2019). The businesses are continuously
tries to improvise the productivity level and it is done with the support of individual performance
related pay as in this the capability of employee's is addressed by which workers experience is
getting encouraged.
The individual performance related pay is being used to provide compensate to the
employee's so that they get easily accepted by the management practices (Nankervis, 2019). The
1

personal management of Debenhams has understand the impact and effect of performance
appraisal and rewards so as to develop effectiveness. In this the working scope and deliverables
of business is getting enhanced and increases on productive basis. Performance related pay is
worked on the principle under which reasonable changes are attained. For example, if two of the
workers get employment at similar job and also performs same working thus in this the one who
has performed its work with noticeably then they get higher level of wages as compared to the
another one. It is more obvious that performance will demonstrate the straightforwardness in
sophisticated mode. It is also being used by Debenhams so as to motivate the workers by which
their performance is getting developed as per compared to the past one (Bailey, 2018). The PRP
used to promote the trust and effectiveness so that effective understanding about the importance
of pay and rewards as per the performance is designed. In this all the employee have make better
understanding so that it is easy for them to develop certain level of believe and faith in which
implementation of performance and its management is processed.
The performance management is a logical fragmentation that is used to oppose the
discrete level of interest so that accountability is increases. In this better sense and appreciation is
created so that positive impacts on the competition and its environment is developed. In this the
managerial actions is taken that is implies by the parallel development of objectives and targets
in stipulated time period. It has beneficiary impact on the working aspect of employee's so that
they have cluster in-discriminatory impacts so that employee has felt unfair and equilibrium
within the business. Debenhams has shows utmost care to its employee's and also redesigned and
rebuild the working prospect of the business so that moderate level of modifications and induced
with more suitability (Barrena-Martínez, 2019). The management and other higher authority
make sure that its manager has worked on to fulfil the demand and requirements of employee's
but in adverse get a demand of better performance so that all the standardised target and outcome
is achieved in timely basis. In this flow of feedbacks is also be necessary for the business as in
this employee's get to know about the positive and negative aspect of working in appropriate and
adequate way. It is also being used to motivate the employee's as by conveying them affordable
and liable inputs about their working so that suitable modifications are enhanced and developed
with better perfection. There is an adverse impact as well like if employee's get to know their
loopholes then they get demotivated too so that they have felt disgruntled (Olson, 2018).
2

In this communication plays vital role as if manager and workers has better interaction
that all the required information is transmitted and collected with suitability and adequacy. It is
the most effective aspect of communication along with this feedback is also get transferred with
more easiness or in formalised mode. The communicating feedback circulate perfect scope so
that all the complications are reduced and individual behaviour and attribute of the workers is
getting enhanced (Boon, 2018). The performance is evaluated as in the form of pay and rewards
in which appreciation salary and other incentives are provided to the employee's so that they
have not only retain with the business for longer period of time but also puts all its efforts so that
achievable outcomes and its probability is getting enlarged with more perfectness. The individual
performance related pay is based on the collective efforts of rewards, objective implementation
process, feedback mechanism, performance management system, pay, reward and incentives
schemes so that employee's are always be in preference. The PRP is a system that is used to
overcome from the certain issues and in this Debenhams increases the pay schemes as it is uses
to increases the motivation level of employee's and in this organisational change is also promoted
by which particular difficulties that is developed from recruitment is reduces (Pattanayak, 2020).
In this the equality payment system is improvised in which employee's understand its
responsibility and works with better focus, concern and commitment.
In the manufacturing sector it is developed significantly by which performance of
employee's is improvise as in terms of monetary rewards by which adequate amount of sales and
benefits are achieved by the workers (Brewster, 2018). The employee's are reviewed and
redesigned the perfection within the performance as on regular basis so that standardised
compensation and facilities are accomplished. It is also being used to motivate the employee and
its relation so that working efficiency is developed in which both intrinsic and extrinsic level of
motivation is developed. In the intrinsic values is related to additional values as like
responsibility, recognition, excellent interpersonal relation, advancement etc. and on other hand
extrinsic includes bonus and salary that comes under rewards and it is provided independently in
order to satisfy the employee's.
In what circumstances IPRP tends to motivate employees and why, and in what circumstances it
tends not to work so well and why?
IPRP stands to individual performance related pay is being used by Debenhams in order
to motivate the employee's as in terms of financial aspect as in this achievement of objectives is
3

affected positively. It is used to motivate the cultural changes as in this better encouragement by
which higher level of motivation and advancement is applied in broader prospect. In this
employee behaviour is fostered by which potential development in terms of incentives is exerted
so that better recognition is praised (Collings, 2018). The deliverable of employee is based on
the performance and award that is provided to the employee's so that efficient outcomes is
achieved. It is used to build greater level of commitment and connection as in reward is paid to
the employee's. Debenhams is the retailing industry and in this they have provided suitable
income to the workers as per their job post and experience. In this sector adequate amount of
wages are provided to the workers and that in this employee's of Debenhams is in favoured that
they have worked in the leading organisation of UK. In context of occupation they have provide
values as per the economic downsizing through which more competence is developed and it is
based on the need and trends of marketplace. Occupational performance defines the potential
problems in which the ability to select, organise, satisfy the different set of problems is
addressed. The relating sector is most prominent and provide better wages to the employee's but
in return better expectation in terms of working is required. As much better salary the employee
get that much they get motivated and in this there inputs and working efforts is getting advanced.
The standardised income of UK is about £29,600 and it is of average household while in the
retailing sector of in Debenhams £20,600 and it is based on average salary (Crawshaw, 2020).
Thus in the if employee get rewards on the basis of performance than their working is getting
more productive. The underlying of IPRP is dependent on the basis of individual performances
as in this right behaviour and attribute is promoted so that employee is getting motivated. The
financial rewards are the one that is needed by an individual as in concern of sole motivation. For
example, if the financial manager of Debenhams get adequate wage but yearly basis
advancement is provided to enlarge the working standard so that productive changes is addressed
in suitable way. In this the employee put all its efforts so as to complete the timely objectives and
sales by which participation of employee's is improvised. In this more values and connection is
developed by which employee easily get retained within the business as for the longer period of
time (Stewart, 2019).
The IPRP tends not working and get demotivate the employee's as in different manner
and in this the pay equity is getting reduces, discrimination level is enlarged, contaminate the
performance review, demotivate the employee as if the achievement of goal is quite higher,
4

employee's felt more pressurised as their performance relies as per the quality of management,
underestimate the teamwork and cooperation, awards might be listed as in arbitrary, it doesn't get
work in the inflation climate, it raises the continual payment of employee's and attention of
employee and achievement of quantifiable goals is reduced (Macke, 2019). As the PRP delivers
the insufficient reward to the employee's as it is directly based on the merit based payment that
has lowers the inflation and restrained the payment. It is the biggest problem that is faced the
Debenhams and its employee's as in this it is stated that pay is the supportive aspect but not the
primary prospect. It is an aspect that is worked well as with the top performers but not with the
huge amount of staff as it is the primarily verdict is based on expense. It also didn't bought
engagement as within the lower employee's thus it used to mitigate the difference in between
lower and higher employee's. In the retailing sector as like Debenhams is has lack of support in
which only those employee get reward who's performance is higher but in this most of the time
integrity of manager affected the negative aspect and rebuild the trust so as to make decision
making (Meyer, 2018).
5

CONCLUSION
It has been concluded from the above report that strategic human resource management
is the prospect of the business with which they have motivate the enlarge the competency and its
impacts so that moderate outcome is developed in effective manner. It is used to achieve the
standardised outcome within the timely basis and in this both success and growth is achieved
with more suitability. It is being used to diversify the impact of employee and its performance by
which productive ending is processed.
6

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.
Barrena-Martínez, J. and et. al., 2019. Towards a configuration of socially responsible human
resource management policies and practices: Findings from an academic consensus. The
International Journal of Human Resource Management. 30(17). pp.2544-2580.
Boon, C. and et. al., 2018. Integrating strategic human capital and strategic human resource
management. The International Journal of Human Resource Management. 29(1). pp.34-
67.
Brewster, C., Mayrhofer, W. and Farndale, E. eds., 2018. Handbook of research on comparative
human resource management. Edward Elgar Publishing.
Collings, D.G. And et. al., 2018. Human resource management: A critical approach. Routledge.
Crawshaw, J., Budhwar, P. and Davis, A. eds., 2020. Human resource management: Strategic
and international perspectives. SAGE Publications Limited.
Macke, J. and Genari, D., 2019. Systematic literature review on sustainable human resource
management. Journal of cleaner production. 208. pp.806-815.
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.
Nankervis, A. and et. al., 2019. Human resource management. Cengage AU.
Olson, E.M. And et. al., 2018. The application of human resource management policies within
the marketing organization: The impact on business and marketing strategy
implementation. Industrial Marketing Management. 69. pp.62-73.
Pattanayak, B., 2020. Human resource management. PHI Learning Pvt. Ltd..
Stewart, G.L. and Brown, K.G., 2019. Human resource management. John Wiley & Sons.
Zaid, A.A. And et. al., 2018. The impact of green human resource management and green supply
chain management practices on sustainable performance: An empirical study. Journal of
Cleaner Production. 204. pp.965-979.
ONLINE
Performance-related pay, 2019. [Online] Available through:
<https://www.cipd.co.uk/knowledge/fundamentals/people/pay/performance-factsheet>.
7