Examine the concept of total reward and explore the reasons for its increasing prominence in organizations

Résumé du document

This coursework examines the concept of total rewards in the context of today's competitive business environment. There are many different total rewards concept in the existing literature and therefore the primary focus must be to choose the most appropriate concept and to examine it and explain its benefits. Furthermore there are important questions whether the total rewards concept can easily be adopted by organizations in practice and to which extend this theory can be valuable for the organizations which are developing strategies to stay competitive in the globalizing business world of the 21st century. Critique against this model are hardly to be found in the literature, due to the reason that this is a very flexible model which can be adopted in many different facets balanced with the needs of each unique organization, the main reasons for its increasing level of prominence will be explained in the process of this essay.

Companies need to develop total rewards or reward packages that satisfy people to stay competitive or establish a competitive advantage. These total rewards include all the non monetary and monetary rewards allocated by a company to motivate, attract and retain employees. The success of total reward systems relies on connecting organizational strategies and objectives of compensation. The employees should be encouraged to work in a way that benefits the firm and its stakeholders. (Mathis R. and Jackson J., 2011,Human Resource Management, South-Western, USA, P. 359-361.)

Extraits

[...] In practice the elements of total rewards are interrelated and have influence on each other. This is the basis of the total reward models which have been developed over the past years. Over the past years several total rewards models have been developed by many academic authors, consulting firms and the research non-forprofit organization WorldatWork. A well known and very detailed model is the Hay Group Model of Engaged Performance which will be used in the process of the work to explain the total rewards theory. [...]

[...] The Hay Group Model of total rewards comprises six key elements. On the one side it looks at the important transactional and relational elements of rewards but focuses on the other side on what employees define as a high-performance and compelling workplace. Surveys by the Hay Group about which cluster the employees values most have shown that the "Inspiration and values" cluster matters most, followed by "Future growth and opportunity". "Tangible rewards" is ranked at the 3 rd or 4th place depending on the degree of market competitiveness the company is exposed to. [...]

[...] The CIPD suggests that this could be partly explained with the circumstance that employers may have seen a more strategic approach to reward in the current economic crisis. International evidence from surveys shows that the popularity of total reward systems is growing. (Chartered Institute of Personnel and Development (CIPD), 2009d, Reward management annual survey report 2009, London, CIPD.) III. The concept of total rewards Nowadays companies know that paying its staff a competitive salary is no longer enough to remain competitive. [...]

[...] Enabling environment On the one hand creating an enabling environment for the employees will help to improve productivity. On the other hand resources to create an enabling environment are limited. Employees often expect a well designed and safe physical environment, good and stateof- the-art tools and equipment and also good training is a sign of organisational investment in its employees, this could be a part of job design. All these factors have influence on the motivation and commitment of the employees. [...]

[...] Reward practices have to be compatible and consistent with the Human Resource policies of the company, especially its structure and culture. The management and the line managers have the challenge to implement the concept in a proper form VI. Bibliography Books: Alderfer Existance, Relatedness and Growth, Free Press, New York. Armstrong M Armstrong's Handbook of Reward Management Practice: Improving Performance Total reward, Paul Thompson, CIPD. Armstrong M. & Brown D Strategic reward: making it happen, Kogan Page, USA . Armstrong M. [...]