(Solution) Avado_5HR03_22_01 5HR03 Reward for performance and contribution


Table of Contents

Introduction. 3

Task One – Written Response. 3

1.1 Principles of reward and importance to organisational culture and performance management 3

1.2  Policy initiatives and practices implementation. 3

1.3 People and organisational performance impact on approach to reward. 4

1.4 Types of benefits offered by organisations and merits of each. 5

1.5 Contribution of extrinsic and intrinsic rewards. 6

3.1 Different approaches to performance management 8

3.2 People practice in supporting line managers in making consistent and appropriate reward judgements. 9

3.3 Line managers make reward judgements based on organisational approaches to reward. 10

Task 2 – Briefing Paper 11

2.1 Business context of reward environment. 11

2.2 Ways of benchmarking data gathering and measuring for developing insights. 12

2.3 Organisational reward packages and approaches based on insight 13

2.4 Legislative requirements impacting reward practice. 16

References. 18


Two sections make up the discussion that follows. Part one of the assignment entails a written response on the effects of different reward packages and methods, as well as the responsibilities of HR professionals in advising line managers on pay. The second section is made up of a summary report on benchmarked data and how it guides the reward strategies.

Task One – Written Response

1.1 Principles of reward and importance to organisational culture and performance management

Rewards are based on two main principles;

  • Ensuring alignment with the company’s objectives

A good compensation plan will take into account the business’s long-term objectives. This is most evident in the way that the company uses incentives to motivate its staff toward the achievement of its objectives (Indeed Career Guide, 2021). In order to maintain high levels of productivity, one of a company’s primary goals must be to create an environment where employees feel appreciated and valued. To reach this goal, it is essential to provide adequate incentives for everyone involved.

  • Balancing intrinsic and extrinsic rewards

According to this principle, organizations should provide all of the incentives that their workers would want (Shraddha Bajracharya, 2018). This is represented in a salary that is commensurate with the market and in other benefits, as well as in a positive work environment and recognition of employees’ efforts. For example, in addition to paid time off, after a successful review of their work they receive a certificate of appreciation from my company.

 Reward decisions must take into account the company’s culture to represent its values and ideals as evidenced by Cotton (2022).  Performance management ensures everyone is paid fairly.

1.2  Policy initiatives and practices implementation

The following sections detail the four main steps of policy initiative implementation.

Step One: Problem Identification and Data Collection

There is an issue at the heart of every policy. For instance, at Home International, the high turnover rate of people between the ages of 18 and 32 is a major cause for concern when it comes to demographics. Once this problem is identified, relevant data, such as the expectations and needs of various age groups, can be gathered to begin a solution (Sansone et al., 2019). For instance, if the high turnover rate can be traced back to unsatisfactory pay, a SMART goal can be designed to fill that pay gap and boost employee morale. Adopting the total rewards approach is one policy example in this regard.

Step Two: Planning

Implementing the first step’s agenda requires determining how to allocate resources and crafting a plan to get the job done. According to Indeed (2021), flexible work schedules and public acknowledgment should be included in the total rewards package in addition to monetary incentives.

Step Three: Implementation

Afterward, the predetermined plan and strategy are implemented, and the various tenets of the total rewards essence come into play. This is shown by the fact that we give our staff members the things that they value most.

Step Four: Monitoring and Evaluation

The final stage of the reward policies involves checking to see if the goals were achieved (Thomas et al., 2021). To do this, we need to gather enough data (both qualitative and quantitative) to find out how satisfied various groups of people are and whether or not turnover has decreased.

1.3 People and organisational performance impact on approach to reward

  • Determining the combination of the rewards.

Aarushi (2023) points out that an effective mix of monetary and non-monetary rewards, or of intrinsic and extrinsic elements, is influenced favourably by employee success. This is because each person has succeeded in meeting his or her goals as well as the company’s overall goals.

  • Reducing the quantity of the rewards.

According to Groysberg, (2021), employees cannot get better perks like profit sharing because people aren’t performing well enough to warrant it. Instead, the business must pay attention only to the salary and benefits specified in the employment agreement. Benefits are reduced even further so that other factors, such as training and education opportunities, can be taken into account.

Organisational Performance 

  • Implementing the set benefits.

Implementing all of the reward decisions as outlined in the textual and psychological contract leads to high organizational performance (Kwok et, al 2021). If a business achieves its goals and expands its financial resources, it may decide to reward its top performing team or manager with a paid trip.

  • High investment in diversity, affecting the organisational overall finances.

Given the organization’s poor performance, the external macro climate is putting intense pressure on it to boost its game. This suggests that the development and learning choice is more highly valued than the monetary advantages, which could have an impact on the organisation’s ability to function financially.

1.4 Types of benefits offered by organisations and merits of each

It is possible to divide the advantages into two categories:

Profit Sharing

A company can provide this perk by giving its employees a cut of the company’s earnings. The advantages can be referred to as a deferred profit-sharing plan as well (DPSP). As stated by Hambly et al. (2019), the worker gets part of the organisational earnings according to the yearly, quasi, or quarterly earnings. Proctor & Gamble is one company that offers these perks to its employees by distributing a portion of its annual profit to them each year.

-The chance to postpone paying taxes. -Can be used as a motivator to bring out one’s best efforts.-In other words, they are up to the discretion of the employer and thus not guaranteed. -Their success is tied to the success of the company.

Health Insurance

The company will pay for the insured person’s and his or her immediate family’s medical expenses under this reward benefit plan as confirmed by Kagan, (2022). The business may pay for all or a portion of the premiums for the employee’s health insurance. Every employee at my company is covered by medical insurance at an in-network medical centre.

-Increases inspiration and loyalty in the workplace. -Retention is improved.– Because of the high taxes that both employees and employers must pay, these plans are unaffordable (Pfeffer et al., 2020).

Both profit sharing and health insurance have a financial focus, and both require the business to make an investment and make use of its resources. As stated by WHO (2021), the primary distinction is that the terms of health insurance are specified in the job contract, while the terms of profit sharing are left to the discretion of the employer. A further distinction is that health insurance is guaranteed, while profit sharing is tied to the company’s bottom line.

1.5 Contribution of extrinsic and intrinsic rewards

Intrinsic Rewards

According to Glassdoor (2021), intrinsic rewards are the internal components of the prize package. They are psychic and intended to produce lasting behaviour. Working in a positive atmosphere and being recognized for one’s work are two examples of intrinsic rewards. Employees at my firm, for instance, are given badges and certificates to recognize their contributions to the business.

By encouraging sustainable behaviour and making sure that people have a feeling of commitment and belonging, intrinsic rewards encourage employee contribution (James, 2010). Promoting employee dedication and motivation results in sustainable organizational success.

-Result in a shift in behaviour. -Encourage drive and dedication.-They cannot live by themselves. -They may cause a worker to disregard other crucial aspects of their employment, like safety.

  Intrinsic benefits Psychological and internal. They encourage one to act in accordance with the company’s beliefs and standards. As a result, an employee’s behaviour changes for the better and they start acting with dedication and integrity. According to Manzoor et al., (2021), promoting one’s motivation and dedication to reaching the personal and organizational goals and objectives is made easier by intrinsic rewards. On the negative side, intrinsic incentives alone are insufficient. For instance, a worker cannot be motivated and pleased solely through recognition. They also require additional elements, like paid vacations. Another issue is that someone who is overly intrinsically motivated may overlook important things like their safety as they work to achieve their goals.

Extrinsic Rewards

These are typically external and financial. The salary and different benefits are some examples. A business-like Google is known for providing its workers with high rewards, particularly better pay. Employee motivation is increased by extrinsic rewards because motivated workers are loyal to employers who pay them well. Extrinsic incentives encourage sustained organizational performance by increasing employee commitment because they are conscious that they will receive specific incentives for demonstrating high performance as evidenced by Coccia, (2019)

-With emphasis on one accomplishment. -Encourage employee inspiration.-Long-term efficacy is non-existent. -Extrinsic incentives don’t foster passion.

 Extrinsic incentives, like bonuses, can be beneficial since they increase an employee’s dedication and motivation to succeed. This encourages one to focus on their successes and boosts productivity (Emmanuel and Nwuzor, 2021). Short-term gains from extrinsic incentives are not enough to keep people motivated in the long run. Getting the same bonus or commission check every year from an employer can get old after a while. A person’s enthusiasm and dedication to their work are not strengthened by extrinsic rewards, but they are weakened.

3.1 Different approaches to performance management

In order to evaluate an employee’s contributions, abilities, and areas for improvement, performance management necessitates regular two-way dialogue between the worker and upper management. The core of rewards and talent management is monitoring performance.

Coaching and Mentoring

According to the CIPD (2021), coaching and mentoring consist of one-on-one discussions aimed at improving an employee’s performance, knowledge, and abilities on the job. Hayden (2021) further claims that both coaches and mentors help their mentees discover their strengths and areas for improvement through in-depth social interactions. The mentor or coach will then work with the mentee to set goals for improvement and create a strategy for reaching those goals.

-Increases the effectiveness of teamwork. -Because of its methodical nature, it yields excellent outcomes.-Professionals and workers may not be a good fit for one another. -They may require a lot of your time.

 Coaching and mentoring’s one-on-one time helps create workplace relationships. The two parties will bond by working together to set and achieve goals. Methodical mentoring and coaching consider one’s broad talents. It comprises inventory and checking in. According to Reitman & Benatti (2014), methodical approach is needed to get significant results (Hakro and Mathew, 2020). Matching coaches and mentees aren’t always easy. Several factors can hinder mentoring and coaching.

Ranking Appraisals

Classifying workers in terms of their worth and performance is an integral part of this strategy for performance management (Marianelson0292, 2015). The process involves evaluating each worker in relation to their peers. The order is based on performance, from worst to best.

-It is simple and fast to determine which employees are the most productive. -Efficient in pinpointing where the organization is falling short of its objectives.-Negatively affects the morale of other workers, especially those in lower positions. -Because of their unique personalities, it’s hard to rank the staff.

 Top-to-bottom employee performance rankings can be used to recognize and reward targets-achievers. It’s important to know an employee’s strengths and shortcomings to determine if they need more training. Bad results might cause employee unhappiness (Dauti et al., 2020). Ranking is challenging, especially when employees behave differently.

3.2 People practice in supporting line managers in making consistent and appropriate reward judgements

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