1 Reward for Performance and Contribution Task One Home International The principles of reward are frameworks through which an organization determines how employees should be rewarded for meeting or exceeding their targets in performance. Rewards can be divided into two significant categories tangible and intangible. The principles of reward guide organizations in rewarding their employee in a fair, predictable, and sustainable manner. The salient goal of any reward program is to motivate employees to work harder and align their goals with those of the employer (Kurniawan & Anindita, 2021). Therefore, reward principles emphasize the objective of rewarding employees' performance. One of the critical rewards principles is the total reward framework that is designed and implemented through the provision of monetary benefits in kind and the development of rewards for employees that achieve specified organizational goals (Mabaso & Dlamini, 2018). The rewards in this context are aligned with organizational culture and context relative to the external market environment. However, the total reward should be tailored to attain an equilibrium between the employee's needs and the organizational interests. Therefore, when adopted, this principle helps organizations maintain a balance between providing competitive wages to attract and retain a talented workforce. The second principle of reward is fairness, aimed at ensuring impartiality and justice in compensating and recognizing employees' efforts. According to Kurniawan and Anindita (2021), fairness in rewarding employees creates a cheerful outlook among employees about the employer and their jobs, leading to better performance. When employees view the organization as fair in how it treats employees, it is less likely to suffer problems of low workplace morale and high turnover. In addition, positive feeling helps the employees to align quickly with the organization's goals and values, leading to an excellent organizational
2 culture. Home International or any other organization should be concerned about creating a positive organizational culture for an effective reward system. Employees and management should embrace it to improve management performance. Reward system serves various roles in organizational management. First and most important, it helps to achieve organizational goals by creating and supporting a performance culture, resulting in improved productivity (Mabaso & Dlamini, 2018). Therefore, Home International can rely on the two reward principles to develop a reward program to enhance employee performance. Implementing new policy initiatives and practices concerning rewards across the organization Home International can implement new policy initiatives and practices concerning rewards by determining the targets of each department, office, and or employee before devising a reward. The implementation process would take several steps that the management should consider attaining good results. The first step is agenda setting, which encompasses sensitizing all critical stakeholders about the reward program. Next, the management and employees should be helped to understand the need, values, and objectives of the reward program (Nankervis, 2016). Most importantly, managers should understand how to implement it as employees fathom eligibility and scoring. The second step is considering policy options, taking into account types of rewards. The substantive arguments for the reward program and its alternative are documented before a final policy is formulated to define and guide the issuance of rewards. The organization would require new policies that ensure that the best-performing employees are retained (Kinley, 2015). The policies would include a competitive payment policy in the labor market. Home International competes locally and internationally, hence the need to have a robust policy that guides the remuneration of employees to ensure that it attracts and retains talent.
3 The third step is the adoption of the reward policy. Home International will require the top management to approve the policy before line managers implement it with the help of HRM. As part of adoption, line managers embrace best practices in judging and rewarding employees' performance (Saunders, 2015). It is imperative to note that adopting the policy gives it legitimacy, making it part of the human resource management strategy. The adoption also includes allocating resources to support the program, especially regarding extrinsic rewards. Lastly, Home International will evaluate the reward policy's implementation to determine its strength and weaknesses. The evaluation allows timely changes to ensure the successful implementation of the policy. Performance evaluation is part of the framework to determine who merits rewards (Mabaso & Dlamini, 2018). In this respect, assessment of policy implementation will help Home International to determine whether to continue with the reward policy as it is, adjust it, or discard it altogether. The impact of People and organizational performance on the approach to reward People performance refers to the ability of each employee at Home International to perform assigned duties in furtherance of organizational objectives. On the other hand, organizational performance refers to the capacity of an organization to attain its goals in terms of human resources and finances. The organization should ensure that employees have the requisite knowledge and skills to perform their roles to enhance the chances of successful implementation of the reward program (Kinley, 2015). The labor market provides Home International with a large pool of competent professionals from which it can hire the best. Concerning the people, positive impacts on reward implementation include a positive attitude and having the right competencies to support the implementation process, such as evaluation and rewards of excellence (Kinley, 2015). However, managers' choices on what reward system to adopt can result from personal biases. Negative effects on people include
4 resistance to the reward system by employees who may feel disadvantaged. The other negative effects on people on the reward system are corruption within the leadership, resulting in unfair rewarding of employees. At the organizational level, the positive effect includes policy and culture that supports transparency and accountability of the reward system. In addition, employees tend to embrace a reward system based on fairness (Mabaso & Dlamini, 2018). Considering the different approaches of people and organizations, they are impacted to work well by different types of intrinsic and extrinsic rewards. In this respect, the reward system should be welldeveloped to consider the organizational and employee perspectives for maximum positive impact. Comparison of benefits offered by different organizations and their merits Organizations offer various employee benefits as rewards for meeting performance targets, which vary from one organization to another. For example, Home International uses intrinsic rewards of praising and recognizing excellent performance to encourage employees to improve their output. On the other hand, Google offers employees support to realize selfactualizing and power. Nevertheless, both organizations offer promotions based on performance, a reward that inspires them to do their best and feel satisfied with their performance (Inc.com, 2022). In addition, intrinsic rewards are less costly because they do not encompass monetary or material benefits. Moreover, Google offers holiday gifts and is the leading generous employer. On the other hand, Home International offers vacations as part of employee rewards. As a result, employees are highly motivated to meet and exceed targets to earn extra pay. Benefits and Drawbacks
5 The management should understand that rewards come with strengths and weaknesses to maximize the organization's benefit. Some of the benefits of intrinsic and extrinsic rewards are: Intrinsic The rewards help improve employee retention, saving the organization the cost of frequently hiring new employees. According to Kinley (2015), employees are motivated to work for long with an employer who recognizes and rewards their efforts more than one who does not. Pay raises, bonuses, and gifts give employees a sense of satisfaction, underscoring their widespread use in reward programs. Moreover, intrinsic rewards help to reduce employee absenteeism at the workplace. Motivated by the need to get rewards for meeting or exceeding targets, employees avoid excuses to stay away from their workstations (Frey & Osterloh, 2002). In the long run, they love their workplace more than home. Furthermore, a reward system helps a company attract and employ talent, contributing to quality human resources. Organizations are interested in employing top talents to enhance quality and innovation. Home International would benefit more from highly talented employees than the average employees. Extrinsic and intrinsic rewards make employees happy and optimistic about the employer, improving the company's image in the labor market (Frey & Osterloh, 2002). Top-quality employees are inclined to seek employment in companies that have a reputation for treating the employees better. In this case, the rewards offered to improve the organization's stature, attracting competent employees. Extrinsic Reward improves performance as employees are encouraged to meet the targets on time and exceed expectations: bonuses and other benefits for exemplary performance drive employees to give their benefits in executing their mandates. For example, Google gives employees a bonus of 20%, underlining the culture of high performance that is embraced at
6 the company. The rewards are offered at the company's discretion, leaving the employer much room to adjust where the need arises (Frey & Osterloh, 2002). For companies like Google, employees are made aware of their eligibility for various rewards at the company's discretion. The varying rewards compel employees to work hard to meet and exceed the target. Drawbacks Rewards such as bonuses should be commensurate without the organizational revenue to ensure sustainability. Mabaso and Dlamini (2018) establish that a decline in profits due to increased production costs may affect the reward system's sustainability. Therefore, the management must review the reward system from time to time to make changes where the need arises. As seen in the case of Google, the bonus paid can be lower or higher than the stated percentage to consider factors such as overall organizational and employee performance, implying the benefits are only sometimes predictable. It should be noted that where the bonuses or benefits are revised downward, adverse effects would impact the organization's overall performance (Mabaso & Dlamini, 2018). Therefore, Home International would make performance bonuses part of the total reward package to motivate employees to improve their performance. A Review of the Role of People in Supporting Line Managers Among the important people to help line managers deliver sound reward judgment is the Human Resource Manager (HRM). The HRM at Home International should provide line managers with insight into employee performance and reward data and enlighten them about available intrinsic and extrinsic reward options available. The information can be leveraged to help line managers determine what kind of reward each employee qualifies for a reward (Nankervis, 2016). The HRM is also required to guide line managers on parameters to focus on when evaluating employees' performance for reward to avoid unfairness. It is imperative
7 to note that fair reward systems enhance employee competition and prevent employee dissatisfaction that comes with a biased reward. Moreover, the HRM is responsible for training and mentoring employees as part of career development. Home International, through HR, should ensure that there is a regular opportunity for training, especially for new employees and for skills. The essence of a training and mentorship program is to equip employees with the necessary skills and knowledge to perform the assigned role (Nankervis, 2016). Consequently, this ensures everyone has a fair chance to qualify for rewards. On the other hand, the executive management is responsible for availing resources needed for benchmarking and adopting best practices. Without the top leadership at Home International providing line managers with these resources, they cannot succeed in making good reward judgments. How Line Managers Make Reward Judgement The line managers make a judgment about reward in numerous ways, all anchored on predictable and fair systems. One, line managers use to set standards to determine employees who qualify for a particular reward. The standards are based on best practices and organizational regulations (Nankervis, 2016). For instance, employees can be recognized as excellent performers and thus eligible for a reward if they exceed the set performance output. Another element that line managers can use to make a judgment on rewards is innovations. Employees who come up with new ideas that enhance organizational performance can be rewarded. The important steps line managers take while making a judgment about rewards include assessing employee performance concerning organizational goals and looking at relevant rules and regulations that govern the reward system. Employee assessment includes observing their work at individual, department, and organizational levels (Nankervis, 2016). Line managers can use daily performance records and targets to evaluate which employee
8 deserves a reward. Intrinsic reward is usually psychologically aimed at reminding employees that their efforts are recognized. According to Munir et al. (2016), intrinsic rewards can be affected by praise and recognition to encourage employees to perform. The line managers can praise employees when they meet targets or exceed them. Intrinsic reward influences organizational performance as employees enjoy completing their tasks successfully and within time because they will receive appreciation for achieving their targets and recording exemplary performance (Munir et al., 2016). The intrinsic reward can be offered after or before pay to motivate employees. In this respect, it is incumbent upon line managers to appraise employees' performance to establish the need for a reward (Hajduk, 2017). The intrinsic reward approach can is implemented along with extrinsic. When employees are paid bonuses or given other gifts, intrinsic rewards can be added to attain maximum motivation. Consequently, employees' purpose is improved by aligning performance with organizational goals and expectations. The feedback and objective setting each year require a performance review report (Fleenor et al., 2020). Performance appraisal sessions should be formalized to ensure the assessment of employee output is carried out to enable the management to determine areas of strengths and weaknesses for possible intervention. Performance review sittings provide the management and employees with the best opportunities to exchange their concerns candidly. Through the meeting, employees can share information on what they think is wrong and how it can be resolved, while the organization can take this opportunity to share with employees its goals and strategy (Shields, 2016). Moreover, during the meetings, each employee is made aware of the performance targets to meet. In this respect, it would be imperative for Home International to carry out regular performance appraisal meetings to determine the strengths and weaknesses of the reward system to improve it.
9 Moreover, 360-degree feedback can determine an employee's strengths and weaknesses and how different reward systems impact his performance. Home International can leverage this feedback system to gather comprehensive information about how intrinsic and extrinsic rewards affect various employees and departments. Employees can share information on what affects their performance and how it impacts overall organizational performance (Fleenor, 2019). This would help the management to determine which form of reward to implement in a different department. It is imperative to note that an organization is not a homogenous entity regarding employees' roles; hence the need to devise a fair reward system, considering the diversity of employees' tasks (Fleenor et al., 2020). When used well, 360-degree feedback can help Home International to enhance employee performance and job satisfaction and reduce employee turnover.
10 Task Two The Business Context of Reward The objective of reward systems at Home International is to enhance employee performance and general production. The productivity of an organization is evaluated by daily output and meeting set targets (Nankervis, 2016). Nevertheless, the reward environment is affected by internal and external factors that should be considered when developing a reward package (Jones, 2016). These factors have a bearing on whether an organization can emphasize extrinsic rewards or extrinsic rewards. Internal Factors The internal factors impacting the reward environment include salary and benefits, employees, employee associations, costs of the operation, organizational culture, managerial decisions, and revenue growth. According to Jones (2016), when employees already have huge salaries, rewards such as bonuses may not have a substantial impact if they are not significant. In this respect, the prevailing salary scale of an employee should be assessed before determining bonuses. Home International is an average-paying employee, which makes it possible to consider bonus payment as part of the reward system. Employee attitude and performance influence the need for and implementation of reward programs. Where employees are self-motivated or influenced by basic salary, there would be less need for reward (Martinez-Lucio, 2013). Employee morale and confidence improve with the implementation of rewards, leading to maximum performance of the labor force and the organization at large (Shields & Kaine, 2015). Moreover, the organization operates in a physical and non-physical environment. Rewards impact the non-physical environment, making it conducive to employees' performance. Rewards of any type are linked to the policies and strategies for employee motivation.
11 Another important internal factor that impacts the reward environment is the management, which ensures that the reward system is just, fair, and sustainable. The management should be professional in managing rewards to create a mutually supportive environment (Shields & Kaine, 2015). It should engage employees and give them the support needed to accomplish their roles. The support includes a conducive workplace environment, protective gear, and other materials. Consequently, this leads to successful management of human resources, boosting productivity and general performance of Home International. Moreover, the human resource department at Home International uses benchmarking to determine if they are on the right track, impacting the general reward environment. The ability of the management to compare their performance to peers allows the organization to use best practices in developing and implementing reward system (Došenović, 2016). In addition, benchmarking data allows a company gains insight into what other companies are doing best and what can be avoided to attain excellent results. On their part, employee associations can pressure the organization to offer employees more benefits, rewards included. Employee associations also influence pay, impacting motivation and the need for reward systems. The cost of operation and revenue growth influence decisions about rewards and benefits an organization can offer employees. Low production costs and high revenue give the employer enough surplus capital to fund reward programs. Home International will need surplus revenue to fund a reward package to motivate employees. Lastly, managerial decisions are crucial to the business context of the reward system. Reward programs can only be conceived and implemented with the approval of the management. The management determines the need and value of a reward package, hence a critical internal factor influencing rewards (Martinez-Lucio, 2013). The management at Home International should embrace reward programs to implement them successfully. External Factors
12 The external factors include the labor market, trade union politics, economic situation, sector, and competition. The labor market impacts the availability of potential employees, impacting the competition for and retaining employees in a particular field. Where employees are scarce, the demand increases, affecting the reward system to keep the organization's best employees (Shields, 2016). Competition from rival firms influenced the need to be innovative and highly productive to remain competitive. Home International will incentivize its employees to produce more and the best if the competition is stiff. However, the company may feel less pressure to perform with little competition. An Evaluation of How Employment and Payroll Data Can Be Used Home International can use unemployment and payroll data from other companies to develop a reward program that meets the sector standards to give the company an edge over its rivals or remain within a competitive range. In addition, payroll data can help Home International establish the link between basic pay and reward systems, helping the organization align the two. On the other hand, unemployment data impacts the availability of employees with particular skills and knowledge linked to pay, and rewards systems companies create to manage employee turnover. Moreover, payroll data can create a long-term strategy to guide remuneration at Home International. The strategy would consider how unemployment and payroll data impact employee value in a given sector (Došenović, 2016). Benchmarking helps managers at Home International gain insights into incentives or benefits other companies offer their employees and how they impact performance and retention. Furthermore, data o payroll and unemployment from a particular region can help the organization to evaluate and understand the labor conditions in the area. For example, skills gaps can be assessed from unemployment data, helping the company develop appropriate employee development strategies to fill in the gaps. Another factor that can be evaluated in payroll data is the job's status and needs
13 (Došenović, 2016). Payrolls reflect expenditures on various cadres of employees in various roles. Home International can leverage payroll data to determine how best to balance the remuneration of employees at various levels to achieve fairness and get the value of money spent. It is worth noting that without benchmarking, an organization may underpay or overpay employees, hence the need to use payroll data in developing the payroll. Appropriate Reward Package Home International can implement a wide range of reward packages to offer employees. The most appropriate package for the organization is the total reward package. The package includes elements of monetary and non-monetary rewards. Under monetary reward, there are performance bonuses (Galang & Villalobos, 2019). The program should be recognized in nature, identifying and rewarding exemplary performance. The performance bonus package is effective because it is fair, sustainable, and promotes high output. Each employee has a chance to participate in the program. The package can be individual, or sector centered. In managing motivation, the company should be seen as fair and predictable in how it rewards performance. Bonuses help employees address their financial issues, giving them a solid incentive to improve (Galang & Villalobos, 2019). Other rewards under the total reward package include benefits such as health insurance coverage, gifts, paid-up trips and vacations, and education scholarships. Home International needs a total reward package for its employees to cover every office and level of employment in the organization. Paid-up vacations can be made available for senior employees and a few employees whose performance exceeds expectations (Kinley, 2015). The total package would further include acknowledgments of best-performing employees and departments. Annual events to recognize and celebrate the best performance would be devised as part of the reward programs. Acknowledgment of exemplary performance and innovations would encourage employees at Home International to improve and maintain high
14 performance. A total reward package is comprehensive, covering each employee and enhancing fairness in the adopted reward system. The organization should put a structure for paying bonuses to ensure transparency and accountability in implementing the package. The structure should include a stated percentage of bonus an employee can get and when. The bonuses can be monetary or other benefits such as medical cover and paid leave. A potent reward package can enhance retention and performance (Shields, 2016). Recognizing and praising employees who perform well is another effective package for rewarding performance. This can complement other reward systems. The use of extrinsic and intrinsic rewards goes hand in hand. Since praising good performance is not costly, this can be applied at Home International any time. Praise or recognition of employees' good performance encourages them to do their best always (Frey & Osterloh, 2002). Most importantly, the package considers the organization's mission and strategy to ensure that it supports the two (Kinley, 2015). Reward packages are part of the human resource management strategy, which should support Home International's business plan and overall HR goals. The Job Evaluation The job evaluation would include an outline of the roles and duties of the holder and the use of a point-factor method to determine the output. Each job will be assigned a specific point based on its value to Home International. The highest-paid job will have the highest points, upon which the scores of the holder can be compared. Manufacturing Operative Home International would consider paying the manufacturing operative £28,178 per year and performance bonuses at 15% of the basic pay. The reward package for market operatives would also include recognition and praise for exemplary performance. Human Resource Administrator
15 On the other hand, the human resource administrator at Home International would be entitled to a salary of £25,623 per year and a performance bonus of 15%. In addition, the holder would also be entitled to health insurance of £ 1,000 (Glassdoor.co.uk, 2023). The package is based on the average pay and benefits for persons serving as human resource administrators and market operatives in the UK. Current market prices are used as a reference point in creating this reward package. This is meant to help Home International offer a competitive package to maintain and keep its employees motivated. Legal Requirements The pay and working time at Home International is subject to labor laws. One of the legal requirements is observing the Working Time Regulations 1998, which governs the hours an employee can work. Employees are supposed to work at most 48 hours per week or 8 hours per day. Also, extra hours employees spend at work should be compensated (Kinley, 2015). This implies that Home International's reward for extra time an employee spend at work is affected by the legal limits on working hours. In addition, UK laws require that employees only work overtime if it is captured in their contract (Collins, Ewing, & McColgan, 2017). Moreover, employees should only be compelled to work for more than 48 hours per week without a written agreement. Therefore, Home International must enter written agreements with all employees subjected to overtime work. The agreements protect employees from possible exploitation. The National Minimum Wage Act 1998 applies to employee remuneration at Home International. The law came into effect on 31 July 1998 after it received royal assent, establishing rules and regulations that employers must adhere to in managing their employees. The hourly pay must meet the national threshold to avoid penalties (Collins, Ewing, & McColgan, 2017). The payment should also be fair, considering employees'
16 knowledge and skills, years in service, risks involved, and workload. Labor laws impact the reward system because performance bonuses are pegged on the basic salary. For instance, when an employee is entitled to a bonus of 10% of the basic salary, the pay increase affects the amount of bonus paid. The question of whether overtime can also be used to determine the reward an employee qualifies for is another issue to consider because overtime pay needs to reflect the basic pay. Consequently, the working time for Home International employees should be guided by UK labor laws to meet legal obligations. The employee pension contributions should also be factored into the remuneration scheme. Home International has to submit all relevant payroll data to the revenue and customs authority. Although the bonus pay rule does not apply in countries such as the UK, it must be observed in countries where it exists (Collins, Ewing, & McColgan, 2017). Employees in Home International offices in Munich and Kuala Lumpur should be remunerated following established local laws.
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