Reward Management System

Introduction

The reward management system is adaption and implementation of suitable strategies for rewarding employees equitably, fairly, consistently as per company norms. This report is going to make a critical analysis of reward management of the firm, Green Fingers Garden Centres in the given case study. In the analysis section this report by evaluating the overall external environment of this firm, it’s an organisational strategy, workforce diversity and professional ethics. This report will also recommend a suitable reward management system for the firm by discussing basic pay, variable pay and pension schemes for its employee, emphasizing HRM dissertation help. Finally, the report will conclude the inference of the overall analysis of rewards strategies for the firm in the case study.

1.Purpose of reward strategy for Green Fingers

1.1 Analyse organisational context and environment:

Analysing external environment of Green Fingers:

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When it comes to critically analyse the reward system of an organisation, it is important to evaluate the external environment (Antohi and Moraru, 2016). The HR manager of the Green Fingers Garden Centre needs to analyse the external environmental factors such as political, legal, environmental, economic, technological, social factors of this firm.

Political factors:

The UK has a stable governmental structure which assists local business operating here to get proper political support in expanding their operation (Bussin, 2018). The HR manager of Green Fingers will have proper assistance from the UK government for implementing the fair and equitable reward system for staffs working in this organisation. The UK has constitutional monarchy which poses important impacts on strategies and systems for setting rewards for each employee in an organisation. Therefore, the HR manager needs to get clear information regarding the government norms as well as organisational norms that are set by the Federal government in implementing the financial and non-financial reward system in this company.

Economic:

The HR manager of Green Fingers needs to consider GDP rate, inflation rates, labour wedge, interest rates and economic growth of the UK while going to set the reward system for the new companies of Green Fingers. From the recent economic analysis of the UK market, it is seen that the UK shows the fifth highest GDP in the world, which provides financial advantages for businesses. Therefore, the HR manager of Green Fingers will have good financial assistance from different venture companies which will bring about good reward scope for employees.

Social:

In the UK social perception has been changes with changing political, technological and cultural aspects. The UK high standard of living, which pose an important impact on setting reward strategies for any new company. Here the HR manager needs to set such a reward strategy for the new branch of Green Fingers, which will assist staffs to satisfy their basic needs.

Technological:

Technological factors are one of the important external factors which any company need to consider while setting the reward system (Mamo, 2017). People in the UK have good access to different technological tools. In the given case study, the HR manager can be benefited through using useful technological tools such as software, cloud computing, application programs and operating system in setting suitable rewards management system. Through using the online tracker HR manager can easily evaluate the annual performance of staffs based on which the manager can set their financial rewards.

Environmental:

The UK government has developed strict guidelines and legal obligation on the business operating here for maintaining the environmental suitability. As stated by Mendis (2017), although the environmental factor is not directly related with the reward management system, it poses potential impact on customer’s buying behaviour and perception about the product of any company, which in turn affect the overall remuneration structure of the company. In this aspect HR manager of Green, Fingers need to focus on maintaining such a reward system which will motivate the workforce to follow the environmental guidelines set by the government.

Legal:

The government has posed important acts on businesses operating here, such as the Wage Act 1986, Minimum Wage At 1948, Labour Law, Equality Act 2010 and Disability Discrimination Act. The HR manager of the given firm in case study needs to consider these above-mentioned acts, to make fair and reasonable reward strategy for the new company. On the contrary Mueller et al. (2018), argued that to make proper reward strategy, the organisational needs not only the legal policies but also organisational guidelines that are set by the government for setting any new companies in that country. Therefore, the HR manager will consider the company guidelines of Green Fingers to make suitable reward management system.

Organisational context:

Workforce diversity:

Green Fingers Garden Centres are the famous chain of nursery firm in the UK which employs several people coming from different countries and background. The diversified workforce in this firm poses both the opportunities and threats for the HR manager to set proper reward strategy for the new branch that is going to be opened in the UK. Workforce diversity can create conflict and high level of competition among staffs which makes it difficult for the HR manager to set fair and equitable reward system for each staff..

Organisational strategy:

An organisational strategy such as financial strategy, operational strategy, human resource strategy and customer dealing strategy a sales strategy is associated with the reward management system of the firm (Bussin, 2018). The HR manager of Green Fingers needs to consider all the organisational strategy of this firm for setting relevant reward strategy. On the contrary Postrel (2016) argued that sometimes considering organisational strategies while setting reward management policies can confuse, they officials about which strategies they need to select as the particular organisational system cannot meet to all the organisational strategies of a firm. In this context, the reward management system would be made in such a manner which will assist the HR manager of Green Fingers to make a perfect balance between rewards policies and the above-mentioned organisational strategies.

1.2 Identify the overall reward strategy:

Reward strategy is important for any organisation for motivating for maintaining its employee motivation and employee engagement to enhance its productivity (Quadri, 2019). The HR manager of Green Fingers is going to develop two types of reward strategy financial and non-financial reward strategy for establishing a highly productive workforce for the new branch of this firm.

Financial reward strategy:

The HR manager of Green Fingers needs to implement the following financial reward strategies:

Annual bonus:

The HR manager will provide a bonus to staff based on the annual performance, sales and profit of the new company. As stated by Antohi and Moraru (2016), the annual bonus is based on the financial performance of the company, that decides whether the staff will get a bonus. In this aspect, the HR manager of Green Fingers will focus on the annual profit of the firm to decide the rate of bonus for each staff. On the contrary, Camilleri (2017) argued that not only companies’ annual profit, but also the HR manager needs to consider the individual performance of each staff, for making the fair reward for each staff. In this aspect, the HR manager can face difficulties in evaluating the individual performance of each staff, as it can consume huge times and effort.

Share incentives:

Share incentive will assist HR manager of Green Fingers to provide the staffs with a bonus in the company shares. This process makes the staffs feel excited and valued that enhancing their level of engagement to work (Razack and Upadhyay, 2017). The HR manager of Green Fingers will decide the share based on the designation and perform of the staffs in the company.

Increment:

The increment is one of the most attractive reward strategies that most of the company follow for making their employee motivated and engaged (Slusar2016). The HR manager of Green Fingers, in going to implement this reward strategy as it will enhance the workforce’s productivity. On the contrary, Taba (2018) argued that sometimes inequal increment in basic salary enhance the level of competition and conflict among staffs which damage the company reputation and productivity. Therefore, HR manager of Green Fingers needs to supervise that, staffs would get the salary hike as per their performance and designation.

Non-financial reward strategy:

There are some reward strategies which will not provide the financial benefit to staffs but assist them to meet their physical and psychological needs (Takeuchi et al. 2018). The HR manager of Green Fingers need in going to implement the following non-financial reward strategy:

Impressive job title, with clear information about the designation, allocated work and daily basis target for each staff.

Highly decorated office premises that would attract most of the eligible candidates for the job.

Well-decorated canteen with a wide range of food arrangements for lunch, breakfast and dinner.

Friendly work culture in the workplace with highly operative managers and staffs

Relevant leadership strategy for staff, that will encourage the creative thoughts and fresh ideas needed for making the workforce highly productive

2. Design of reward system:

Basis pay structure:

According to Mekonnen (2018), basic pay can be referred to as the fixed amount of salary that a company that company allocate for each staff in return of the work the staff does (Mamo, 2017). In the case study, the HR manager of Green Fingers is going to make such a basic pay structure that will be relevant with the designation and type of work of each staff. On the contrary, Camilleri (2017) argued that, in case of setting suitable basic structure, it is not enough to focus only on the designation and work type of the staff, rather the company needs to also consider its financial condition to determine whether the company can afford the salary to each staff long term. In this aspect, the HR manager of Green Fingers needs to anticipate the overall financial condition of this firm, which will assist the HR manager to set suitable basic pay structure that will be relevant for firm's financial condition.

Variable pay structure:

Variable pay can be referred to as the sales compensation that the company decide for each staff based on the company's profit, staff's performance and overall financial growth in the particular year of the company. In the given case study, the HR manager of Green Fingers will consider important aspects such as company profit margin, the productivity of the workforce, basic salary ad performance of each staff, to set justified variable pay. The HR manager is going to give variable pay which includes incentives, bonus, increment, base pay and compensation. In this aspect, Mekonnen (2018) opined that, as the variable pay is not fixed, it can create conflict and competition among staffs. Therefore, the HR manager needs to set such a productive workforce which will assure a high-level profit margin for the firm in each year so that the staff will get handsome variable pay.

Employee benefits and pension schemes:

Pension schemes and employee benefits are not set by the administrative body of a company, which provide financial security to staffs (Mendis, 2017). The HR manager of Green Fingers is going to launch a pension scheme for staff above 60 years with additional senior citizen benefits. Moreover, the HR manager will also launch some additional employee benefits such as loan facility at low interest for staffs, family Mediclaim facility, provident fund, gratuity, compensation schemes fort its permanent staffs.

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Conclusion

From the above-mentioned discussion, it can be concluded that the reward management system is one of the most important processes which assist the company to motivate and engage their staffs towards their work. There are different types of reward that a company can offer to its staffs such as financial and non-financial rewards. Financial rewards include bonus, increment, compensation, incentives and base pay. On the other hand, non-financial rewards are impressive office premises, friendly work environment, creative work culture and well-decorated canteen. When it comes to forming an effective reward management system, HR manager of the company needs to analyse the organisational external environment, organisational strategy and workforce diversity. Finally, it can be stated that the reward management system is an inevitable part of each company through which it can make a highly productive workforce.

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Reference list:

  • Antohi, I. and Moraru, A.D., 2016. Reward Management Practices-Evidence from Constanta County, Romania. Ovidius University Annals, Economic Sciences Series, 16(1), pp.269-273.
  • Bussin, M., 2018. Reward solutions to retention questions. In Psychology of Retention (pp. 395-413). Springer, Cham.
  • Camilleri, M.J., 2017. Exploring the reward management system in the Malta public service: the case of senior management employees (Bachelor's thesis, University of Malta).
  • Kinman, G., 2016. Effort–reward imbalance and overcommitment in UK academics: implications for mental health, satisfaction and retention. Journal of Higher Education Policy and Management, 38(5), pp.504-518.
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  • Postrel, R., Signature Systems LLC, 2016. Method and system for using multi-function cards for storing, managing and aggregating reward points. U.S. Patent Application 14/987,448.
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