LEGAL ENVIRONMENT/TOTAL REWARDS

Legal Environment/Total Rewards



Legal Environment/Total Rewards

Introduction

The purpose of this paper is to devise a Total Rewards management plan, an emerging and growing trend. The company is faced with the dilemma that its employees are dissatisfied with the pay and reward structure and hence in the opinion of the Chief Executive Officer, there is an urgent need to revamp the reward structure to retain the existing workforce (Aguilar, 2002).

Discussion

Reward management has a key position within Human Resource and retention theory for a number of reasons. Pay is a central organisational concern because questions of financial control and cost management are themselves fundamental to the organisation and to management decisions. Discussion and negotiation about those decisions and about the level and distribution of pay bring personnel or the HR function into a central organisational position (Heneman, 2008). Reward management is one of the key levers to be deployed in pursuit of effective HRM. If pay is to 'deliver the goods' in terms of HR strategy, then it must be structured, it is argued, in order to meet organisational objectives (Aguilar, 2002).

It follows, according to the logic of the 'New Pay', that as business performance can vary, so too should the levels of pay. In other words, the pay package should comprise pay which is 'at risk' as well as pay that is guaranteed. The 'New Pay' writers argue for the continuing need for adaptation in business practice in a dynamic business environment (Andrews, 2001).

Importance of Giving Rewards

Rewards given for achieving relatively challenging standards are also indicative of competence. It has been noted that rewards given for meeting or exceeding a challenging criterion verify people's competence (Heneman, 2008). When incentives are given for trying hard, people learn what skills they possess and what they are able to do. Rewards tied to achieving performance objectives also cause people to care more about doing well at an activity and increase intrinsic interest more than positive performance feedback without reward (Aguilar, 2002). Generally, when rewards are linked to overcoming challenges, these incentives help people develop a sense of self-efficacy, interest, and involvement in activities (Andrews, 2001).

Consequences of Satisfaction and Dissatisfaction

When rewards are given for mastering knowledge and sub-skills related to an individual's long-term goals, the person will gain a sense of competence. One researcher coming from this perspective found that for children who were poor at mathematics, incentives for mastering sub-skills ...