Employment and Total Rewards

Introduction The aim of this paper seeks to examine the concept of integrality honours in the fulfill of increasing gibbosity in ecesiss. Total payoffs is outdo exposit as a furrow dodge that implys financial and non-financial complementary elements intentional to recruit, develop, retain and motivate employees(OSP 2003). Employees fielding(a) for a conglomeration rewards employer tend to be more motivated, productive, and happy. (eHow 1999) As a way out is the business thrives(eHow 1999) and prominence. In this paper, I see behind following this concept to explore more exact of effectiveness gist reward in the arrangement prominence.The concept of rewards has positive over the cartridge clip to represent more than just to endure suss out an employee at the end of the month. The concept of total rewards was emerged in the 1990s as a new way of commending about the deployment of hire and bring ins, combine with other(a) conspicuous and in tactiles ways that fellowship seek to attract best bulk. (Richard val del Walt 2010) As defined by Manus and Graham (2003), total reward includes all types of rewards-in restrain as come up as direct, and constitutional as salubrious as adventitious. Michael Armstrong 2006) The direct reward is what an employee receives from the employer in bank accounting system ofttimes(prenominal)(prenominal) as base wage, bonuses, commission. Indirect rewards, often called benefits refers to that part of the total reward package in assenting to direct gift, such as health & quality insurance cover, retirement & pension plans, health cargon, party car and mobile phone (Koala Consulting and Training 2008). T here(predicate) be extrinsic rewards, which cover the basic conveys of income to survive (to hire bills), a disembodied spirit of st magnate and consistency (the caper is secure), and experience (my employment values my skills).On the other hand, on that point are intrinsic reward s, the most measurable of which is probably job satisfaction, a disembodied spiriting of completing challenges competently, enjoyment, and even mayhap the social interactions which rebel from the work turn up. (Koala Consulting and Training 2008) The ability link and balance all aspects of rewards unneurotic helps organisations achieve the penury, commitment, engagement and using of employees. The consequence is profitability, efficiency and prominence in organisation.The most companies who use the total reward system merely hatch to stand benefits and a positive place to work (Patricia K. Zingheim and Jay R. Schuster 2002), but this makes a order attractive to the work force in general but perhaps non to those who impart make enterprise prosper. The companies subscribe to to fashion workplace to be attractive to mass who are wanted to adding value to the business. (Patricia K. Zingheim and Jay R. Schuster 2002) To increase prominence and efficiency in organisations is responsible equally as an employer, as employees.The employer responsible to creates an atmosphere in which the best people leave alone want to work in company. It is true that the best people will work more than founder. (Patricia K. Zingheim and Jay R. Schuster 2002). The total rewards scheme concept is simply about the creating an atmosphere by financial and non-financial benefits glide byn to employees in business for their service, time, abilities and their efforts to brave the company. The top natural endowment (Patricia K. Zingheim and Jay R. Schuster 2000) wants to work for the company provide part workforce deal that involves the quadruplet total rewards helpings.The compiling future is authoritative for the employees, because they want to be able to draw self-esteem and satisfaction from working in the organisation. Employees want to feel that the organisation has optimistic and positive vision, vigilance and growth of the future and a set of values that they preserve stay. (Employement studies n d) The company that focuses on individual growth appoints chance an employee for training, coaching and in the flesh(predicate) development. (Patricia K. Zingheim and Jay R.Schuster 2002) Also, the employee wants to work in organisation where workplace is positive. This means best leadership, aggroup working and open communication. Roles and working environment should be intentional or so employees (Employement studies n d), with a focus on their future development. Employees need to feel that what they do is of import and to understand how their role relates to the organisations goals. (Employement studies n d). The demise component is total pay. Total pay involves basic pay, writ of execution-related pay, benefits, and feedback or recognition.All the elements that involve total pay are high-priced way to address individual need and preference. (Employement studies n d) For example, proceeding-related pay to emphasise results bene fits to provide protection from life and health hazards, in addition to holi age, recognition and feedback. (Employement studies n d) Some companies can balance the four components or choose the only one, for example some companies may experience truly strong total pay, but the poor work environment. opposite companies may have weaker total pay but develop people, provide a positive workplace.Also, there are five elements of total rewards model, WorldatWork (2011) presented the individually of which helps to make the strategy to attract, motivate and retain employees. These elements are compensation, benefits, work-life balance, exploit & recognition and development and vocation opportunities. The compensation includes four basic components, such as fixed pay Also known as basic pay, fixed pay is nondiscretionary compensation that does not vary according to performance or results achieved. It usually is determined by the organizations pay philosophy and structure.Variable pay Also known as pay at risk, variable pay changes directly with the level of performance or results achieved. It is a one-time payment and must be re-established and re-earned each performance period. short fillip pay a form of variable pay, short-term incentive pay is designed to focus and reward performance over a period of one year or less. Long-term incentive pay a form of variable pay, long-term incentive pay is designed to focus and reward performance over a period longish than one year. Typical forms include stock options, restricted stock, performance shares, performance units and cash. SARA 2010) Hroot ( 2007) said while one of the most traditional elements of total rewards, it re main(prenominal)s a essential for business success. Benefits area constantly challenged and expanding during the last time from just , holiday, health-care benefits to benefits programs which protect employees and their families from financial risks and can categorized such as retirement and medical and dental insurance, as well as non-traditional programs, such as identity theft and pet insurance. Life-balance area center to help employees do their job effectively, such as flexible scheduling, telecommuting, child-care programs, etc.In talent direction, performance involves the association of organizational and individual goals toward business success. Recognition is a way for employers to pay special attention to workers for their accomplishments, behaviours and successes. Recognition is necessary to support the value of performance improvement and promote positive communication and feedback. reading a set of learning experiences designed to improve employees practical skills and competencies. festering engages employees to perform fracture and engages leaders to advance their organizations people strategies. Career pportunities area focuses on the planning for employees to go forward their career goals, and a more responsible position in an organization. The d evelopment and career opportunities involve the learning opportunities and coaching, such as new technology training, attention at outside seminars, conferences, virtual education, leadership training and formal or informal mentoring programs. (SARA 2010) Full understanding of total rewards concept, key components and elements give opportunity to implement the total reward strategy to attract best people, talent, custody them and have them perform well.After all, effective reward systems help an organization not just retain key employees, but to a fault be more free-enterprise(a) and reduce turnover. The ability to understand the purpose of total rewards helps bang and identify the main powerful types of total rewards to be more competitive and avoid the supply turnover. rung turnover is the most serious difficulty for the company. The reasons to leave the organisations are Im not sure theres a future here for me. , I just dont feel like this is the right place for me. , Im n ot sure I want to be doing this for the rest of my life. and I think I can make more money elsewhere. (The Vision necktie Advisory Group n d) With an understanding of the reasons people leave an organization, the organisations can considerably to improve these areas of an organizations by using the total rewards strategy to creating and sustaining a gardening that is not copy able which is essential to maintaining a competitive service in the market place(The Vision Link Advisory Group n d), but if the company will ignore the reasons why people leave the company, there are affecting them in umteen ways, such as eminent staff turnover, conflict, stress, low productiveness, bad company image and lose of the business.The main issue to implement the total rewards strategy is turnover. There are more consequences such as lost of best employees, time and cost of weft and enlisting process, poor performance, conflict, stress and poor company image. The turnover is fall apart on two categories voluntary turnover where employee chooses to leave. The key reasons include better career opportunities development, increased compensation and better work environment.Involuntary turnover is when employer is asked to leave for reasons including poor performance or development, an inappropriate behaviour and attendance of employee. To replaces an employee the HR watchfulness department, which is responsible for the recruitment and selection process should prepared all relevant procedures to recruit new worker. Recruitment and selection process are very expensive and also considers the costs and consequences of employee turnover.There are financial, community and workforce impact. Every time an employee leaves and has to be replaced, an operation incurs a number of direct financial costs, including administration costs associated with processing resignations and dismissal, time taken up in conducting exit interviews, productivity firinges associated with impending d eparture. Lost productivity and additional costs such as overtime or asseverator payments to cover for vacancies created by this departures.Recruitment costs such as advertising, employment of job search agencies, time and resources spent in processing applications, staff time involved in selection interviews. Also the training and start-up costs, because the time of trainers and staff and of new employees taken up in inductions and on the job training, loss of productivity until the new employee reaches full production potential. (David Brereton, Mining David, poignancy Beach. 2003) In fact, last year it was estimated that filling each staff emptiness in a business costs the employer between ? 4333 and ? 7750. (J. A.J Aaronson 2010) In addition to financial costs, high turnover is very negatively affects operational efficiency, such as a close teamwork, because instability in the workforce, consequences can include increased stress and tension amongst those remaining employees w ho have to fill the gaps left by departing employees, declining employee morale, and decreased productivity. (Pinkovitz, Moskal et al 1997)The companies which have staff turnover cant to invest in training and career development for staff, which is so important for the employees, because have big looses in recruitment and selection process.The ability to implement and develop the total rewards system will give galore(postnominal) benefits to achieve organisational goals, make company efficient and prominent. The benefits of total rewards approach are greater impact- the combined effect of the different types of rewards will make a deeper and long lasting impact on the motivation and commitment of people. (Michael Armstrong 2006) The total rewards and Maslows need hierarchy theory (1954) is very considered.Maslow proposed the motivation is a function of five basic needs-physiological, safeties, love, esteem and self-actualization and explained that a individuals physiological need s must be firstly met followed by safety needs, and so on up the need hierarchy. When designing total reward strategy, employees multifarious needs must be well considered, Maslows points will help the organization reach its expectation. (Zhou Jiang 2009) Employee will give their maximum when they motivated and have a feeling or confidence that their efforts will be rewarded by the management.There are many factors that affect employee performance like working conditions, worker and employer relationship, training and development opportunities, job security, and companies general policies and procedures for rewarding employees. Among all those factors which affect employee performance, motivation that comes with rewards is of utmost importance. (Nadia Sajjad Hafiza, Syed Sohaib Shah, Humera Jamsheed, Khalid zaman 2011) A satisfied and motivated employee and work force by tangible and intangible rewards can definitely help sustain productivity.Job satisfaction plays an important r ole in employee commitment and in reducing employee absenteeism and boredom at work. Smith (1992) believed that job satisfaction could lead to cost reduction by reducing absences, errors and turnovers which leads to greater productivity and economic and industrial growth which is a major drive of most organisations. The result of total reward strategy is happy motivated employees and their appreciation, meeting the new challenges, positive and caring status from employer, and job rotation after attaining the goal. Nadia Sajjad Hafiza, Syed Sohaib Shah, Humera Jamsheed, Khalid Zaman 2011) The second benefit of total rewards is increased flexibility in the total rewards approach allows awards to be motleyed to fit the various needs of the employee. Flexibility has wrench an important factor in work-life balance. Organizations are recognizing the constraints many workers are facing and providing them with alternatives to check the motivational and emotional needs of the employees a re met.Some flexibility rewards that have been implement in many organizations are instilling various scheduling options and providing telecommuting options. More companies are instituting new work schedules which include longer days but shorter weeks, i. e. 4 days 10 hours as well as allowing employees to work from home. With technology becoming more advanced, employers can meet with employees via the sack and documents can be faxed or emailed. Increased flexibility is both in force(p) to the employer and the employee. (Cyberessays, Divaqueen. 011) The other benefit of total rewards Michael Armstrong (2006) said is talent management- relational rewards (learning, development and work environment) help to deliver a positive psychological contract and this can serve as a differentiator in the recruitment market that is ofttimes more difficult to replicate than individual pay practices. The organisation can become an employer of choice and a great place to work the result is att racting and retaining the talent people it needs. There are many advantages from managing talent, such as makes company more competitive in competition.The company that try developing and producing super-talented people is always best to compare products or services to competitors. This important process of the company increased sales effectively and efficiently. With the position more competitive than the competition, a company can automatically effective market penetration and gain greater market share. do market share means more sales of the company increases significantly. (Business 2011) The ability correctly implements the total rewards strategy give organisations opportunity to become efficient and competitive over competitors.bloody shame Mosqueda, (2008) said developing the correct mix for the total rewards strategy is the key to employing and keeping the best talent. The first timber is identifying the culture, employee climate, and employee demographics. This can be d etermined done an employee appraisal system, focus groups or key employee interviews. After identifying what drives employee motivation, commitment, and loyalty for organization, also the importance to determine how much organisation are willing to spend. The second step involves creating a street map or a total rewards philosophy/strategy.The importance of give-and-take on relevant question related to the total rewards strategy. The question such as What transactional and relational rewards company already offer? , What compensation, benefits and work/life programs should the company offer to remain competitive in industry? , What is general commitment to companys financials and employees? , Who is the companys competitors and peers rewards programs? These entire questions give opportunity to think of development general total rewards strategy.Mary Mosqueda, (2008) said the tercet step is development of policies and procedures regarding the use of new benefits, learning envir onment, development and compensation systems. These policies establish the flow of the process and secure the integrity of both the company and employee. Management can easily include these polices into an employee manual or handbook. It is very important that senior management is on board with any changes or new policies with regard to employee total rewards programs, then, the fourth step in this process involves including top management from the beginning.Educating management on how to successfully implement these strategies with their employees is critical. Managers and employees need to understand the process and learn how total rewards can help them in achieving objectives and further companys financial goals. This can be achieved through different methods of communication. Communication is next step of the implementation, which is vital to the successful result of total rewards strategy. If this is not communicated properly, it is all for naught.The communication of rewards s trategy can be by emails, meetings, newsletters, representatives etc, Communication should support development strategy and achieve a win-win situation for both the organisation and employees. As employees contribute to the organisation in achieving its goals, those same employees need to share in its success. To encourage this win-win situation, senior management needs to ensure that employees have a clear direction and that they feel valued by receiving appropriate rewards. (Michael Silverman, Peter Reilly. N d) Also, the total rewards strategy has a poor result, if development and implementation process is incorrect, because applying too much motivation or offering too many rewards can also have a negative effect. Employees can become over-confident. They may feel that they are the bosses favourite workers, even if they start to slack off on their work and responsibilities or test the limits of their working relationship with their supervisors. (Amelia Jenkins, Demand Media n d) besides using total rewards strategy the organisation motivate, build a thoroughly atmosphere and relationship with employee that fosters a sense of trust.In a good relationship, employees may feel respected and comfortable in their working environment. Providing rewards, both tangible and intangible make employees happier. Happier employees often perform better at work and proud of their company. Conclusion This essay examined the concept of total rewards and the reasons for its increasing prominence in organisation. The components, elements and benefits of total rewards make the clear understanding how it is important for the organisation on the whole.The total rewards have a positive influence on the employee base and the company, because the ability to give the right rewards to the right employee makes the win-win result. Employees who know they will be rewarded for their efforts, talent and development will continue to perform well and maintains employee satisfaction. When, employees talk about organisation with good reward system and their development, opportunities, good payments and environment, its make organisation more attractive. Over the time a reputation and company image go up.In addition, an organizations reputation makes an impression on trustworthy and future clients, which can significantly improve the companys worth and profitability. There are more consequences of reward strategy such as happy and requite employees, good atmosphere, reduce the staff turnover, good reputation and profitability. It is make the organisation very prominent. References Michael Armstrong (2006). A Handbook of Human Resource Management Practice. tenth ed. London Kogan Page Limited. p629 Michael Armstrong (2006). A Handbook of Human Resource Management Practice. 10th ed. London Kogan Page Limited. 632. 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