Professional Documents
Culture Documents
MBA1 ‘C’
Table of Contents
Table of Contents..............................................................1
1. INTRODUCTION..............................................................2
2. LITERATURE REVIEW .....................................................2
2.1 Financial Rewards ............................................................3
Non-Financial Rewards..........................................................13
CONCLUSION...................................................................14
4. REFERENCES...............................................................16
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Managing Human Capital
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1. INTRODUCTION
An organisation can be efficient only if they will be able to
utilize the resources that they have with them appropriately. The
resources usually include infrastructure, workforce and capital, all of
which are inter dependable but the most important among them is
the work force. Labour can be considered as one of the most
important resource so as to maintain or utilize the other resource
like infrastructure and capital. Any organisation that will be
successful to persist their employees will do well. Hence it is
important on the part of the organisation to handle the human
resource effectively. The employees that are a part of the
organisation will have the qualities that are demanded by their job
description. Some of the employees might have high levels of skill
that is required for their job or might even have a lot of experience
in that field. Each person gets paid differently depending on their
levels of skills and experiences. Reward policy is a prerequisite for
strategic management of pay and benefits.
2. LITERATURE REVIEW
Pay and job security are the important factors that employee
consider when they are looking for jobs. Employees usually prefer to
work with an organisation that provides to them different types of
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pays and benefits. They even desire rewards that could bring about
improvement of their status in the society. Rewards can be of two
types:
• Financial Rewards
• Non-Financial Rewards
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3. Since there is clarity about rewards for obtaining the
objectives, all the staff can participate and try to achieve the
objective thus increasing their productivity level for the
company.
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can be through profit sharing, bonuses, incentive schemes,
holiday bonus and deferred compensation.
2. All the employees are made to attain the same set of goals
and are rewarded equally thus decreasing the sense of
competition between the employees.
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3. Regardless of the contribution and effort offered by the
employee, they would be just receiving their profit sharing
money. (Torrington, Hall & Taylor 2002)
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Disadvantages of Employee Stock Ownership Plan-
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1. The long-term aspect will provide steady earnings.
Example 12: Mill Steel drives production with gain sharing plan.
Unionized production workers of Mill Steel Company have been able
to increase their earnings due to gain sharing plan. (Franke 2004, p.
164)
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competitive edge by following the gain sharing measures and
employees received $825 by the end of first quarter.
Example 14: The first Scanlon plan had been adopted by the
Timber Roots MTD back in 1930s. Since they have put this plan in
action, Timber Roots employees have generated above 200 plant
improvement suggestions and thus their productivity level has
increased to a greater extent.
Merit Plans: Merit pay plans are links an increase in base pay to
how successfully an employee performs his or her job. The merit
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increases are usually given if the employee has been successful in
attaining some standard goals that have been set by the
organisation. A meaningful merit increase will catch the attention of
the top performers that will help in the organizational progress.
(Bohlander & Snell, p.461-462)
Example 16: British Gas in 1994 increased the merit pay plans
from 11% to 75% for the directors who earned more than 200,000
pounds. (Price 2007, p. 479)
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is not directly earned by the employee. These payments have no
entitlement to the employees pay as a result of contract of
employment and cannot be expected in return for a specific
performance. These payments are done only after going through
the effort presented by the employee on a yearly basis. (Reda,
Reifler, Thatcher 2005)
2. Employees can enjoy their bonus and feel satisfied with their
role of job.
Example 18: Plante & Moran are providing their employees with
bonuses relating to their competencies and on the result
measures. Performance on goals, like getting a job done in
particular time is used to drive annual bonuses to their
employees (Franke 2004, p. 157)
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bonus pot of 80 million pounds within its employees as the result
of excellent performance in the company’s plan.
1. Employees may feel that their production standards are not set
fairly.
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certain goals. (Franke 2004, p. 155)
Non-Financial Rewards
Non-financial rewards imply to advantages employee gets in
their work place that can be in the form of Achievement,
Recognition, Influence and personal growth.
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Example 28: Dell Computers have recognition programs that are
voluntary. They recognize the Dell employees who actively support
their local community. Dell honors such employees.
Example 29: Google employees enjoy the perks such as free meals
in their cafeteria, on-site doctors, dry cleaners and gym facilities.
The googlers also get perks for referring an employee who is
planning to leave Google.
Example 30: The cabin crew of BA was stripped off from their
travel perks due to the continued strikes during the Easter weekend.
At the end of the day even saying a simple “Thank You” could make
the employee feel happy and positive about his work.
CONCLUSION
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Individual performance
Individual Potential
Budget of organisation
Change Management
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4. REFERENCES
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6. Franke, LR 2004, HR networking: performance management,
Chicago IL, USA.
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on 30 t h March 2010,
http://www.bandwidthblog.com/2007/04/05/25-secret-perks-
of-google-employees/
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