Data Bases • Custom Term Papers • Free Term Papers • Free Research Papers • Free Essays • Free Book Reports • Plagiarism? Links • Top 100 Term Paper Sites • Top 25 Essay Sites • Top 50 Essay Sites • Search 97,000 Papers @ DirectEssays.com • Search 101,000 Papers @ ExampleEssays.com • Search 90,000 Papers @ MegaEssays.com Free Essays • Term Paper Sites • Chuck III's Free Essays • Free College Essays • TermPaperSites.com • My Term Papers • Get Free Essays • Essay World • Planet Papers	Search Lots of Essays Back to Subjects - Miscellaneous EMPLOYEE INCENTIVE SCHEMES EMPLOYEE INCENTIVE SCHEMES With today's workforce becoming increasingly diverse and organisations doing more to maximise the benefits of the differences in employees, Human Resource managers are evolving from the "old school" sideline player to the front-line fighters. Organisations are relying on managers to get the people who get the job done, and of course, make the company money. People have always been central to organisations, but their strategic importance is growing in today's knowledge-based business world like never before. An organisation’s success increasingly depends on the knowledge, skills, and abilities of its employees. Particularly as they help establish a set of core competencies which distinguish one organisation from its competitors. When employees' talents are valuable, rare, difficult to imitate and organise, an organisation can achieve a sustained competitive advantage. In order to "compete through people", an organisation has to be able to do a good job of managing their human capital: the knowledge, skills, and capabilities that add value to the organisations. Managers must develop strategies for identifying, recruiting, and hiring the best talent available then seek to develop these individuals in ways that are specific to the needs of their individual firms, encourage them to generate new ideas while familiarising them with the company strategies, invite information sharing, and rewarding collaboration and team work. The basis, on which payments are determined, can significantly affect employee productivity and the achievement of organisational goals. Establishing benefit programs require both large and small organisations to consider specific goals. Employee retention, compensation distribution and adherence to the budget must be carefully weighted against the overall organisational goals and expectations. Payments must reward employees for past performance while serving as a motivation tool for future performances. Organisations must balance each of the concerns while still remaining competitive. For internal equity an organisation can use one of the basic job evaluation techniques to determine relative worth of job. The most common are the ranking and classification methods. The job ranking system arranges jobs in numerical order on the basis of the importance of the job's duties and responsibilities to the organisation. Job classification slots jobs into pre-established grades with higher rated grades requiring more responsibilities, working conditions, and job duties. Base salary is only one aspect of a retention plan for important employees. Benefits and incentive plans are valuable perks in recruiting and retaining essential employees. In order to have a sound benefits package there are certain basic considerations. It is essential that a program be based on specific objectives that are compatible with the organisational philosophy and policies as well as being affordable to the company. By utilising a flexible benefits package, employees are able to choose those benefits that are best suited to their individual needs. Incentive pay plans can be advantageous to both the employer as well as the employee. The success of an incentive pay plan depends on the organisational climate in which it must operate, employee confidence in it, and its suitability to employee and organisational needs. Importantly, employees must view the incentive plan to be equitable and related to their performance. Performance measures should be quantifiable, easily understood, and bear a demonstrated relationship to organisational performance. Performance appraisals serve many purposes, but in general those purposes can be clustered into two categories: administrative and developmental. The administrative purposes include decisions about who will be promoted, transferred, or laid-off. They can also include compensation decisions. Developmental decisions include those related to improving and enhancing an individual's capabilities. These include identifying a person's strength and weaknesses, eliminating external performance obstacles, and establishing training needs. Within many organisations, performance appraisals are seen as a necessary evil. Managers frequently avoid conducting appraisals because they dislike playing the role of judge. Largely the success of an organisation depends on the performance of its human resources. There are many theories regarding motivation with the most prevalent being the theories of Maslow and Herzberg. It is important to understand these theories and their implications to accurately comment on reinforcement theories of motivation. According to Maslow’s hierarchy of needs, there are five classes: Each lower level need must be satisfied before an individual experiences higher level needs. Maslow hypothesised that as above needs were satisfied, they ceased to motivate, while the self-actualisation needs actually motivate an individual more as they are satisfied (Schwab, 1978: 57). Herzberg used this theory as a base to build his motivation-hygiene theory, which ties Maslow’s needs to on the job achievement. The hygiene elements relate to low needs (physiological, safety, and social). For an individual, hygiene conditions include company policy and administration, supervision, relationships with peers and supervisors, work conditions, salary, status, and security. These, according to Herzberg account for 69% of the factors, which cause employee dissatisfaction, or lack of motivation. The motivation conditions, which include achievement, the job itself, recognition, responsibilities, and personal growth, accounted for 81% of the factors, which contributed, to job satisfaction. The hygiene conditions are extrinsic factors while the motivation conditions are intrinsic factors, and the only way to sustain motivation toward organisational goals is through the achievement of intrinsic outcomes. Each theory contains ideas consistent with human nature, but each also has its limitations within organisational settings. Because lower order needs are generally satisfied in the workplace today, managers have to deal with how to provide esteem and self-actualisation to their employees, and that can be a vague concept to a manager who demands results immediately. Monetary incentives based on productivity and quality. Job enrichment efforts have proven somewhat successful in improving performance and attitude amongst employees. McGregor developed an additional theory on human behavior, motivation, and management in the late 1950’s. His theories X and Y and were based on assumptions made regarding the "system" and individuals. Theory X (the most common management practice) management organizes all elements of production, motivates and controls employee behavior to fit the needs of the organization, and without this intervention, employees would be indifferent to changing organizational needs. McGregor assumes that managers believe that the average employee is by nature lazy, lacks ambition is self-centered, and resistant to change (McGregor 1957). Management has the responsibility for organizing the elements of production, management should enable employees to develop their motivational characteristics, and that it is essential for management to arrange organizational conditions in a manner where employees can achieve their own goals by directing their personal effort towards organizational objectives. In essence, people have an idea that there is a link between performance and wage increases. The most motivating reward may be public celebration of the people’s achievement exemplifying the organisations highest values. At Singapore Airlines for example, the Managing Director's Award is the most prestigious tribute an employee can receive. The award is given each year to those staff members whose action demonstrates the airline's commitment to total quality service. Winners are celebrated, photographed, interviewed, published, wined, dined and praised, yet receive no special monetary award. These people become the legends, heroes and role models of the organisation. Their deeds are told and retold for years to come. Their actions and the public recognition they receive keep the airline's values flying high. The biggest problem facing business today is how to find, keep and motivate workers. That something may equate to a fun, flexible workplace that gives them more freedom and responsibility. Money may get employees in the front door, but you may need something else to keep them going out the back door. The founder of Southwest Airlines, combines fun and hard work into something he calls “management by fooling around”. At the n airline everything from the tickets and boarding passes to the casual dress and occasional costumes attendants wear – clearly demonstrates that something is different. Southwest Airlines first plane took off June 18, 1971, In just three years, the airline carried its millionth customer and was operating profitably. By 1996, it had posted 24 years of consecutive profits and had become the fifth-largest airline in the United States. Elizabeth Sartain was asked, ‘How do you make your people be so nice?’, People. "Of course, you don’t make people nice. You hire nice people, then create an environment that encourages them to be nice on a daily basis. Southwest’s commitment to employee development is clear. The company built a new learning centre to house its University for People (U for P). Investing $1 million in an ambitious supervisory training program for the next generation of Southwest leaders, for workers at all levels throughout the organisation. Another example of how incentives can work with other employees is through a company wide goal such as ‘cutting expenses.’ For example, empowering employees at all levels to find ways for saving the company money can be very helpful in motivating the workforce and saving the company money as well. For example, British Airways had implemented a remuneration that worked on the basis that ideas that improve productivity would result in a certain amount in monetary value. This simply means that everyone in the organisation is responsible for the bottom line and is given incentives for assisting the company in increasing profits they get bonuses based on the innovations they've come up with. Another tactic that can be used to involve the entire workforce in an incentive program is through gain sharing which involves a specific measurement of productivity combined with some type of calculated bonus to offer employees a share of increase in company productivity. Benefits of gain-sharing increased worker motivation because of the pay-for performance incentives, and a greater sense of personal responsibility for making performance contributions to the organisation. Gain-sharing plans also encourage co-operation and teamwork in the workplace." (Schermerhorn, Jr. J., Basic Organisational Behavior). When employees don’t show up for work it results in lower productivity and unnecessary sick leave pay. One way Southwest attempts to motivate all of its employees is by offering two free airline tickets to employees who don’t take any sick time for three months. If the employee doesn’t use the tickets, someone can use them in their family. At Southwest, managers are encouraged The role of top management should be to "manage", and the most important resource they must manage is the people that work at all levels of an organisation. Their role should not be "to rule", but "to lead". They must be objective and understand that they cannot solely provide the best decisions on aspects that are not in their realm of expertise Managers should motivate employees by providing useful information and their opinions in organisational decision-making. They should facilitate and co-ordinate interaction between departments, which creates more unity throughout the organisation. Managers should also understand that employees form the foundation of any organisation, and that "all" of them have unique strengths that can help in achieving the companies goals. In return, employees will feel useful and are placed in a position to self-actualise or attain one's potential. There should be respect for employees and their abilities. A company should give it s employees every opportunity to learn, grow, contribute and realise their dreams. Employees are number one, the way you treat employees is the way they will treat the customers. I believe, if carefully implemented, these approaches can be used to motivate employees. For instance, customer service representatives may not be very motivated to come to work and make sure they return all calls the same day with superior service without an incentive. I believe that if you offer incentives to motivate all of your personnel, you have a greater chance of improving performance in all areas of the organisation and a lesser chance of creating any ill will among sales personnel and non-sales personnel. An effective incentive program across the entire organisation may also help to alleviate any felt negative inequity. According to J. Stacy Adams, this occurs "when an individual believes that he or she has received relatively less of a reward than others have in proportion to work inputs" (Schermerhorn, Jr. J., Basic Organisational Behavior). I think these tools (travel, merchandise, and cash) can be effectively implemented if the entire organisation, from the CEO to the new receptionist, shares the same vision and goal. Have a few meetings where you all share your idea of company goals and rewards program alignment. I think every organisation has a different philosophy in regards to this. From the research I have conducted for this assignment I have found organisations that provide incentives to support staff to get creative with their incentives. Personally, I feel if programs that offer incentives to the entire workforce it is a great way of fostering company loyalty and keeping all employees focused on departmental and organisational goals. Much of the literature on motivation which was discussed above links directly to reward and remuneration systems theory, but some of it has only indirect implications for reward systems. Human Resource Management's front-line fight is to get the organisation in order. As Tom Peters stated in A passion for Excellence " Trust people treat them like adults, enthuse them by lively and imaginative leadership, develop and demonstrate an obsession for quality, make them feel they own the business, and your work force will respond with total commitment". Evidence points to a more active interest in and careful implementation of human resource management. Management is, by definition, getting things done through people. If managers are to increase productivity, reduce costs, and improve their organisation’s competitive advantage, they must focus on how to properly manage personnel. Creating effective motivation and leadership, recruiting and retaining the right personnel, rewarding and treating employees fairly, establishing an environment that supports the people and benefits the organisation, managing the organisation’s most valuable resource - its people. Bibliography: Bibliography Business Basics, A study guide for degree students “Organisational Behaviour”, 2nd Edition, BPP Publishing. G.A.Cole, Personnel Management 3rd Edition, 1993 G.A.Cole, Personnel Management 4th Edition, 1993 Ron Curson, Business and Management Studies, Personnel Management,1980 M.W.Cumming,The theory and Practice of Personnel Management 6th Edition,1989 John Bramhan, Human Resource Planning,1989 Raymond L.Hilgert and Cyril C. Ling, Human Resource Management 2nd Edition,1996 Moira Swain and Debra Strach, How to deal with sickness and absence, 1995 Published by GEE Ariane Hegewisch & Chris Brown, European Development in HRM, 1993, Cranfield Management Research Centre. F.H.M Blackler and C.A.Brown, Job Redesign and Management Control, Studies in British Leyland and Volvo, 1978, Published by Saxon House Mosley Megginse, Supervisory Management, The Art of Empowering and Developing People, 1997 Word Count: 2282
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