HRM 5 Flashcards
Reward system
describes the way organisation uses a combination of financial and non-financial elements to compensate employees for their time, effort and commitment to work
The objectives of reward system:
- Support the organisation by designing policies aligned with organisational strategies and goals
- Attract and retain employees who add value to the organisation by offering an attractive reward package
- Motivate employees to perform effectively to achieve valued arganisational outcome by applying policies in a fair and consistent way
- Integrate with other HR policies, including career development and work-life balance
- Comply with legislatiom
Direct pay
is the largest component of reward package. Main components: base pay, which is the hourly, weekly or monthly amount paid if employee conform to the terms of their contract
Performance-related pay (direct pay)
is paid when predefined objectives are achieved and linked to the performance of individual, team or employee
Forms of Performace-realted pay
Merit pay - is when higher-performance employees are rewarded with additional pay.
Piecework - is when employee are given payments for each piece produced
Commision - refers to when employees are given payments as a precentage of their scales in addition to the base wage
Bonuses - can be paid to inidviduals, teams or divisions for achieving predetermined performance target
Team-based pay - is when employees in a formally established team and given payments that is linked to their performance
Profit-saring scheme - are when a proportion of the company’s profit is paid employees in the form of a bonus payment
Employee-share ownership plan (ESOPs) allow companies to distribute shares to employees
Gain sharing sschemes - are when company attempts to accure savings by changing work practices
Indirect pay - have financial value but are rewarded employees in forms other than cash e.g. gym membership, childcare
Statutory benefit - are provided using a social insurance fund to people in employment. e.g. paying employees on maternity leaves, paying disability benefit
Organisation-specifi benefits - vary between organisations, for example flexible benefits plan, discount for services, paid sick day etc
Non-financial rewards
are various HR policies and practices designed to support employees in both, their careers and lives
Job evaluation
is used to establish the iternal alignment of jobs within an organisation. Three main reasons:
1. Provide a strong defence agains legal challenges to pay practices
2. Ensure they make consistent decision regarding pay that are related to the value-added by the positio.
3. Establish an equitable hierarchy or structure of jobs that is felt fair
Maslow suggest that human behaviour is motivated by 5 levels of needs
- Physiological needs
- Safety needs
- Love and belonging needs
- Esteem needs
- Self-actualization needs
Rayes et.al.
States that money is not he only and primary motivator for everyone, but can become an important motivation if specific requiements are met
Three characteristics of motivation
Intensity - short-tem incentives increase intensity but do not encourage persistence
Direction - extrinsic vs intrinsic, short-term reward can undermine intrinsic motivation
Persistence - log-term rewards are required
Directions of motivation
Intrinsic - occurs when employees put effort into a task they found interesting and important
Extrinsic - occurs when employees are motivated by external factors
Workforce demographics
Generational difference
Life stage and life choices
Gender
Types of pay secrecy
Distributive pay non-disclosure: restriction on sharing information on pay levels
Pay communication restriction: stopping employees from speaking about their pay
Procedural pay non-disclosure: restricting information on how decisions are made
