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Human resource planning and organizational strategy
Human resource planning process
Human resource planning process
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Many people may think only how the information technology industry has evolved, with little or no thought about the transformation of other professional areas in today’s society. This trend includes organization providing “Total Rewards” compensation for employees. Furthermore, this conversion, now is an extremely intricate factor for recruiting, motivating, and increasing employee retention. Employers now realize the importance of providing total rewards along with wages and salaries is a path to recruit and retain valuable employees. Therefore, a strategic plan for total reward has become enormously beneficial for organizations to beguile the most talented (high performers) employees in their realm of industry. Although salary has always …show more content…
The main company’s brand (Pepsi-Cola, Tropicana, Gatorade, Frito-Lay, and Quaker) contribute to $1 billion in gross sales globally (PepsiCo, 2017). PepsiCo understands to retain and recruit top level employees, the company must stay competitive by virtue of providing an alluring total rewards package along with competitive wages and salaries. PepsiCo commitment to both current and future employees states, “At PepsiCo, we provide more than salary.” (PepsiCo, 2017). Therefore, the company offers the following total rewards …show more content…
Market-base configuration pay parallels with external procedures for job with the same and comparable job descriptions and qualifications within its realm of industry. However, PepsiCo should consider restructuring front line employees from commission to performance pay. Performance pay will pay employees based upon experience, skills, and any other unique abilities. Furthermore, this pay structure will also provide an incentive for employees to meet or surpass the company’s sales goals. However, the company also has to remember what is comparable in each geographic area. Additionally, managers for route drivers and sales department, PepsiCo should consider strictly a performance pay plan. While it may not be feasible for the company to make a transition for all personnel (hourly) in the operations department to performance pay, consideration for managers (salary) to transition to performance could become beneficial. Again, managers can encourage and motivate their employees to become more efficient and productive. Executives’ pay structure is already strictly on performance pay and should remain the same. The chart below (Figure 3) displays the recommended total compensation
Incorporating a pay for performance plan is an effective approach to retaining employees. Adding this plan also reinforces the values and goals of the organization. When people are being paid more for performing a superior job motivates employees to work harder to achieve a better pay. Communicating to the employees how they are doing is essential without the communication they will not know if they have improved or in what way they can improve. After all everyone has room for improvement, but without proper feedback no one would know how better
The company Steel Co, which has been established for around 30 years, has been in a steady decline during the current recession and although a Divisional Director has been employed by the owner the fortunes of the company have not improved. The staff is unhappy, unproductive and unimpressed by the Human Resource system that currently exists in the company. The pay structure that currently exists within the organisation has been much debated among employees who feel it is unsatisfactory. The Business Adviser will research Performance and Reward management tools in order to help the company develop a more suitable Performance and Reward system to use. A variety of sources will be used in order to evaluate the system and tools against other organisational frameworks. The pay structure within the company will also be looked at in order to identify any possible changes that could be made.
Reward and recognition has to be promoted for small and large achievements. An effective reward’s program keeps employees engaged, dedicated, and committed to the organization.
Total Rewards Managers must design and manage programs to help retain, attract and engage key talent. The Total Rewards Manager must know and understand the Human Capital strategy for the organization. With today’s economy and competition in the marketplace, employers must look for ways to reward and motivate their employees. This is very difficult as benefit costs continue to be on the rise with no end in sight. Total Rewards Managers need to be able to generate a balance between corporate dollars spe...
Performance related pay is a financial reward given to employees whose work is considered to have reached a required standard or is above average. “PRP criteria can relate to the individual employee, to work groups or to the organization as a whole” (Armstrong, 2002). It is fair to provide people with financial rewards as a means of paying them according to their contribution (Armstrong 1993:86). The primary purpose of performance related pay in any organization is to recruit, retain and motivate the workforce. It also helps in focusing employees’ minds on particular goals (Protsik, 1966); communicate to employees an organization’s core values, and change the culture of that organization (Kessler and Purcell, 1991).
The foundation for effective job performance and compensation system can be traced to effective job analysis process. Fundamentally, a job analysis should consist of a thorough examination of the job 's duties and knowledge, skills, abilities, and qualities that are required in order to be successful in a specific position, upon which appropriate rewards or compensation can be determined. For many perspectives, jobs are usually made up of requirements and rewards, where rewards may be regarded as a major recruitment strategy for motivating potential employees in order to influence them to stay the organization for a longer period as well as enhance their performance. The most common or basic form of rewards which attracts employees is extrinsic
Corporations are looking for new ways to improve employee performance as well as remain competitive. Pay for performance is one method some businesses are utilizing to improve employee performance. Performance-based compensation exists when compensation is tied directly to that portion of an individual’s performance that can be effectively measured. There are a number of ways in which this may be accomplished and a number of examples as well how it is applied. One of the oldest examples is taken from the ancient Egyptians, where slaves working in the pyramids were given bread for superior performance. Payment of commission for sales production is one of the methods used today.
Reward Management (RM) has been defined as the distribution of monetary and non-monetary rewards to employees in an effort to align the interests of the employees, the organisation, and its shareholders (O’Neil, 1998). In addition O’Neil (1998) also suggests that a RM system can serve the purpose of attracting prospective job applicants, retaining valuable employees, motivating employees, ensuring legal requirements relating to direct and indirect rewards are not violated, assisting the company in achieving human resource and business objectives, and ultimately assisting the organisation in obtaining a competitive advantage.
What is the Value of Total Rewards Compensation? Compensation and benefits are sub-categories in human resource management that compensate employees for their organizational outputs. According to my research, “benefits is an important component of the employment relationship, providing employees with financial protection, access to health care and programs to support work/life balance” (Kwon, Hewitt, & Hein, 2013) Therefore, the overall purpose of an compensation program is to enable the organization to attract, motivate, reward, recognize and retain highly talented employees with the skill sets required to fulfill its mission and vision.
Employee compensation and reward systems have undergone a couple of paradigm shifts since inception. Reward systems were traditionally compensation based and focused on the individual or the position (Beam 1995). After a recession in the early 1980's, employers turned to performance based models in an attempt to save money while still rewarding top performers (Applebaum & Shapiro, 1992). Today, the most successful organizations are using a total reward model, a hybrid of the performance based model combined with strategic human resource management planning to create reward systems that both benefit the employee and help organizations realize their operational goals (Chen & Hsieh, 2006).
In large organisation, competition is not only in the market for goods and services but also for the quality of employees. As such, a large organization can only become attractive to the most skilled and high quality workers if it has an effective compensation and benefit plan. The key purpose of an effective compensation and benefit system is to provide employees with the right rewards for their work and right behavior in the workplace. Typically, organizational success is determined by the quality of employees an organization has. In turn, the organization can only attract such quality workers and maintain them through effective compensation and benefit
Job satisfaction includes challenging work, interesting job assignments, equitable rewards, competent supervision, and rewarding careers. The quality of work life and psychological rewards from employment are very important. It is doubtful, however, whether many of us would continue working were it not for the money we earn. This paper establishes the definition of compensation, overview of compensation philosophy, critical components of a compensation strategy, and an example of an effective compensation practice. (www.indiana.edu/~busx420/Book.../chap09.doc)
Tomax Corporation has 400 employees and wishes to develop a compensation policy to correspond to its dynamic business strategy. The company wishes to employ a high-quality workforce capable of responding to a competitive business environment. Suggest different compensation objectives to match Tomax’s business goals.
Management spends a huge amount of time to design incentive systems and schemes to motivate their workers and to ensure they work in their best possible manner. Motivating workers by giving them decent pay helps in winning employees heart to make the work done efficiently, significantly and effectively. The most effective way to motivate people to work productively is through individual incentive compensation (Pfeffer, 1998). An attraction of getting more is a powerful incentive to people for high performance. While most people agree that money plays a major role in motivating people, in organizations there is a widespread belief that money may also have some undesirable effects on morale.
The total pay package has a direct impact on the successful recruitment, selection and the retention of staff within any organization. This pay package is critical for any business to remain competitive in today’s business world. Competitive compensation packages are vital to both large and small organizations as they encourage the retention of talented staff.