International Human Resource Management Full Time Management Essay

International Human Resource Management Full Time Management Essay
Student name and Registration number
JannatUmair Hassan 12106616

Programme title and Mode of attendance
MSC International Human Resource Management Full time
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Rewards and motivation in Unze

Aim of this study is to analyse and evaluate the effects of reward system on employees performance in the organisation called Unze. It is high fashion label for women shoes, accessories, evening and casual wear and there is a large range of men and kids shoes. Unze is not only located in united kingdom it is located all over the world.

The focus of this study is on the motivational perspective of reward system. In evaluating and analysing the reward systems from the motivational perspective,unze may find the best s of motivating the employees, which can lead to high performance. The main question of the research is Which reward systems affect the employees’ motivation and performance?

To reach the aims this research will look at the intrinsic and extrinsic rewards and motivation. Secondly will focus on what are the basic and important motivators for the employees. Thirdly compare and analyse the rewards, which are actually motivating the employees or affecting the motivation in a positive or negative way. Lastly, there are two main aspects, which will be discussed in this research, is what motivates the employees to stay in the organisation and what make them improve their performance.

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To achieve aims it is really important to set some objectives, and the main objectives of this study are:

Analyse and identify the reward system used by Unze for motivating employees.

Find what motivates employees to stay in the organisation and loyal to the organisation.

Find what motives employees to improve their performance in their designated work.

Literature Review
Reward system
"Reward system consists of an ogranisation’s integrated policies, processes and practices for rewarding its employees in accordance with their contribution, skill and competence and their market worth."(Armstrong 2007)There are five main components of the reward system, firstly the process of measuring the worth of job, measuring the contribution and efforts of individual in that job, this is a job evaluation process. Secondly, practice of motivating the employees through financial and nonfinancial rewards. Thirdly relating the pay and benefit to the employees level in the organisation and rewarding them according to their performance and status in the organisation. Fourthly, schemes for rewarding individuals, teams and organisations performance. Lastly planning and managing the system so that it can work efficiently and effectively.(Armstrong find book)

There are several elements of reward system and all of them are interlinked to each other, Armstrong explains the elements through a simple diagram.

Recognition, responsibility, achievement, autonomy, development, growth

Non-financial rewards

Job evaluation

Grade and pay structure

Market rate analysis

Reward strategy/policies

Total remuneration

Base pay

Business strategy

Total reward

Contingent pay

Employee benefits


Performance management

(Armstrong 2007)Diagram above shows all the elements in the reward system and how they are interlinked with each other.

Employers use reward system to attract, retain and motivate staff. (Torrington, Hall, Taylor &Atkinson 2011) reward systems are designed to improve the performance of employees and only those are rewarded who have achieved to a certain expected level of performance. (Furtado, Aquino &Meira)reward systems are really important because Employees do not work automatically they need to be motivated so that they can work hard and all this can be done by the reward strategy or reward system. (Edward & Christopher 2006).Here the main question is on how indicators make sure there is productivity of teams and encourages motivation without causing any dysfunction in the measurement system and has no consequences on it (Austin 1996) main problem is to decide who should be rewarded and reward system should be used.

Employee reward
Employee rewards described as "bundle of returns offered in exchange for a cluster of employee contributions." (Bloom &Molikovick, 1996 pg. 497).There are different types of rewards intrinsic versus extrinsic, individual versus team, monetary versus nonmonetary and fixed versus variable. (Gerhart and Milkovich 1993) according to gerhart and Milkovich all the rewards types mentioned above may overlap in various ways. We will talk about intrinsic and extrinsic rewards in detail. "Intrinsic rewards are those that an individual experiences through performing a job well." (Herzberg 1996) whereas extrinsic rewards are inducements (e.g. a bonus, a commemorative plate that the organisation typically provide for good performance."(Herzberg 1996)

As mentioned above all the rewards are overlapping, intrinsic rewards can also be categorised as non-monetary and extrinsic rewards can be categorised as monetary and socioemotional. For example a challenging assignment or freedom of speech is intrinsic rewards whereas pay increase or bonus on achieving an objective is extrinsic and monetary and appreciation in the organisation newsletter is extrinsic and socioemotional.(Chen, Ford & Farris 1999)












The above diagram is given by Chen, Ford and Farris (1993) and shows how all the rewards types are linked to each other. Motivation can be explained in two different ways firstly intrinsic motivation, when a task or job is done for your oneself satisfaction rather than for any reward or benefit and secondly extrinsic motivation is totally opposite, all the activities are done to gain something it can be financial rewards or may be appreciation by the manger. (Ryan &Deci 2000)

There are several rewards and all of them have different effects on the motivation of employees, for example, extrinsic rewards are also known as the monetary rewards have a negative impact on the employees with intrinsic motivation because they do not do anything for financial rewards. There is on-going debate on that extrinsic rewards have negative impact on the intrinsic motivation whereas some author or researchers do not agree with that. "It was said that the extrinsic rewards have a detrimental effect on the intrinsic motivation." (Ryan &Deci 1996,2000) Whereas Cameron and pierce (1994) reported from the several laboratory and school based practices that extrinsic rewards do not have negative effect on the intrinsic motivation. (Xiang, Chen &Bruence 2005) In the same article, Albeit research clearly showed that yes extrinsic rewards have a detrimental effect on intrinsic motivation only when the sole reason is to take part in the activity. (Xiang, Chen &Bruence 2005)

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Main motive of showing the above debate is that rewards have different effects. It is difficult for the organisation to decide how the employees can be motivated because each individual have different type of motivation and demands,this can be affected negatively and positively with the rewards used by the organisation. For example, Jenkins analysis "financial incentives" published in 1986 explains that 57% of the studies clearly show that financial rewards have a positive impact on the organisational performance. (Kohn 1993) However, according to Herzberg, study and research pay cut can lead to demotivation but that does not mean that the pay increase can lead to high motivation and performance. (Kohn 1993) One reward system cannot be a full package for the employees of organisation now a lot of organisations are incorporating total reward systems in their organisation.

Total reward is defined by Worldatwork (2000) "all of the employer’s available tools that may be used to attract, retain, motivate and satisfy employees. This encompasses every single investment that an organistaion makes in its people, and everything its employees value in the employment relationship."(Armstrong 2007) main objective of total rewrd system is to derive the best performance in your employees. (Worldatwork 2000) total reward system are explained by different models

Total Reward

The above diagram shows that total reward system includes all of therewards which can affect the performance of an individual. Worldatwork (2000)explains five advantages of total reward system

Total reward systems can be used for any problem or challenges faced by organisation regarding motivation. It is high in flexibility so it can be tailored according to the employee demand.

Organisation using total reward system will be able to work according to employees demand which will lead to high motivation and labour turn over will decrease and organisation will be able to retain their valuable employees.

Cost can be reduced by using the total reward system, highly motivated employees lead to high quality work so less scrap and decrease in labour turnover is another reason for cost reduction.

Organisation using total reward system will be able to attract the best talented people.

Employee motivation will lead to high performance and then of course high productivity.

Where there are a lot of advantages of using total rewards at the same time there is a lot criticism on using the total reward. Firstly managing such diverse needs of workforce is really difficult. Centrica mention drawbacks of using total reward system,

Firstly developing total reward system can be really costly, it takes almost 10 months to implement it, secondly implementation and management of total reward system demands a lot of support from management. Lastly it is really difficult to quantify the cost of some intangible or non-financial rewards. (Armstrong 2007) CIPD (2007a) reward management survey showed that only four out of teen employers have adopted total reward system. Total reward is a new concept for the employers but it is said that it should be tried after flexible pay and benefits are successfully implemented in the organisation. (Foot & Hook 2008)

Theories of motivation
"Motivation is the propensity of the individual to expend effort in work."(Heery& Noon 2008) "The concept of motivation refers to internal factors that impel action and to external factors that can act as inducements to action."(Locke and Latham 2004) A lot of work is done on work motivation, from 1930 psychologists are interested and working on it but that time the focus on totally on supervision, incentives and working conditions, and then in 1964 Vroom brought a different aspect in work motivation; "valence-instrumentality expectancy theory model."(Locke and Latham 2004)

There are several motivational theories, which explains how important are the financial and non-financial rewards and helps organisation in implementing the reward strategy or system.Few of them are explained below

Maslow explains motivation through a hierarchy of need, according to Maslow, each one follow these hierarchy of need and he /she should be motivated according to the level of need.

Tyson (2006)explains five steps of Maslow’s hierarchyof needs

The physiological needs are important; these are the basic needs and essential for the survival like food, shelter etc. If the employees is on the first step of hierarchy organisation should motivate the employee through financial rewards as they need money to fulfil their basic needs and non-financial rewards will bring almost no effect on their motivation

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Security and safety needs, these refer to the have job security, freedom from fear, good working conditions. Organisation should pay attention to the employees how demand these needs and try to make sure that they are satisfied with their job and have no fear of unfair dismissal

Affiliation, these needs includes the self of belonging and good social ties with co-workers and superior. Some employees are motivated when they have nice company in the work place; superiors are really nice and friendly with you. They feel as they are part of the company and become really loyal

Esteem needs, these needs include self-respect and they want to see that they are valued in the organisation. superior and subordinates should value their opinion and involve them in decision making

Self-actualisation, this is the highest level of need. Employee fall in this level do not want financial rewards they are more motivated by promotions, recognition and personal development.

(Tyson 2006)

Maslow’s motivational theory earned a lot of fame but at the same time, there are also some drawbacks of Maslow’s theory. Firstly there is no attention given to the extrinsic rewards when talking about security, esteem and self-actualisation, whereas if an employee is promised a promotion and high pay he/she will still manage to performance good even without security and esteem. Secondly it is difficult for a manger to identify the need level of each employee. Lastly, the theory is not empirically proven. (Jonathan Yong 2012)

Another famous motivational theory is Herzberg two-factor theory; he has divided motivation in two groups "hygiene factors" and "motivators." Hygiene factors are the factors, which prevent dissatisfaction. According to Herzberg there are some work situations where we need good supervision otherwise they can lead to dissatisfaction; these factors include pay, working conditions, supervision, job security etc. Hygiene factors do not lead to satisfaction but if any of the factor is missing or absent in the organisation can lead to dissatisfaction. Whereas the other one is motivators, it is basically about what a person does at work and leads to high performance in the organisation. Motivators are the factors, which increase the satisfaction and motivation level in employees, these includes achievement, recognition, growth etc. (Beardwell&claydon 2010) It helped organisation to focus on the factors which can lead to dissatisfaction but even this theory of motivation faced criticism, Herzberg did not use the fact scales, some factors are neither hygiene or motivator. He used a general standardised scale, which leads to errors in his findings. Secondly, different individuals have different needs and not all of them can be treated equally, another drawback in Herzberg theory is that he did not pay attention on individual choice of people. (Tek Yew and Abdul Manap 2012)Robin (2001) discuss the criticism of this theory, firstly situational factors are ignored, secondly the relationship between the productivity and satisfaction is not proven individually, only assumptions are made.

Another motivational theory is goal-setting theory, "goal-setting theory is based on the premises that people are motivated to achieve the successful attainment of challenging goals." (Hollyforde&Whiddett 2002) Locke’s (1968) derive three conclusion from the goal-setting theory;

First conclusion derived by Locke is, difficult or high goals leads to high performance in comparison with easy goals. Outcome of several experiments shows that when a goal is hard to achieve employees work more hard to achieve and are motivated when given such challenging work.

Second conclusion is specific goals leads to high performance, when organisation tells employees to do their best the performance is low, as they cannot see any benchmark to achieve. When employees have specific goals, motivation will increase.

Third conclusion is, choices made by people can be influenced by the behavioural intentions. Behavioural intentions are "The intentions to make a certain task choice or to respond in a certain way."(Locke 1968). It basically mean that the difficulty of goal basically depends on what the person aimed to achieve

Goal-setting theory leads to high performance however; there are some problems in this theory. firstly goal-setting theory do not include the concept of goal commitment, when an employee is committed to the goals he/she have to achieve, the motivation level for achieving that goal will be high. Secondly robins outline a problem that goal-setting theory is not applicable in all the cultures it is more relevant to the countries like UK and US as compared to others. (Hollyforde&Whiddett 2004)

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The focus of this research is to find out what reward system is used by the Unze and is that system goodfor Unze. Many organisations invest a lot in the reward system but still sometime they are not able to motivate employees and increase the costs of the organisation. Motive of the research is to check that, are these rewards motivating employees to stay in the organisation or improving the performance.Research wants to help the firm Unze to review the current reward system and help them to find out what is the effect of the reward system on the employees. Research will differentiate about the intrinsic and extrinsic rewards and their effect on the employee motivation.

This research will focus on what are the main reward system prevailing in Unze and will use interview and questionnaire to check how these rewards are affecting employees in Unze.

In this resesrch primary data will be used. "when secondary data are not available or cannot answer our resrech questions, we mudt collect the data that are relevent ourselves."(Ghauri & Gronhaug 2010 pg.100) Ghauri an Gronhaug explains that primary data is collected specially for a specific or particular project, so that means that the questions will be linked with the question or topic chausan. Then if we want to know the demand people’s attitude behaviour for a product are to be checked, in all these casesprimary data will help a lot.lastly we can not learn about people’s choice or demands until or unless we ask then directly. Disadvantages of using primary data is that it takes a long time to collect data and it can be expensive sometimes, Another Weakeness of using a pimary data is that the resreach is totally basedon the answers and views of the respondants Lastly sometimes alot of reserchers are not ready to take part in the reserch, it is really difficult to convience them to take part.

Research methods used in the research are both qualitative and quantitative methods. Qualitative methods is described as "an array of interpretative techniques which seeks to describe, decode, translate and otherwise come to terms with the meaning, not the frequency, of certain more or less naturally occurring phenomena in the social world." ( Van Maanen, 1983 pg.9)"Qualitative findings include three kinds of data collection firstly detailed and open-ended interviews, secondly direct observation and lastly written documents." (Patton 2002 pg.4) In this research, interviews will be used, "The purpose of interviewing is to find out what is in and on someone else’s mind. We interview people to find out from them those things cannot directly observe."(Patton 1980 pg.196) There are different types of interviews structured, semi structured and unstructured. (Saunders, Lewis and Thornhill 2000 pg.243) structured interviews are predetermined set of questions. Secondly in semi-structured interviewsresearcher have a list of themes and question and it will vary from interview to interview. Lastly unstructured interviews are informal and in-depth, interviewee gives a detailed answer and this interview is undertaken in natural settings. (Saunders, Lewis and Thornhill 2000 pg.243)

In this research unstructured interviews will be used, Open ended questions are specially designed for the purpose of reviewing the reward system in Unze and to see how it is affecting the employees in the organisation. Marshall and Rossman 1989 explains the Reasons for choosing the interview as a research method, firstly face to face conversation with the interviewees, secondly can obtain a large amount of data in less time, thirdly facilitates cooperation from research subject, fourthly it is easy to check and clarify if there is any omission or misunderstanding, fifthly data is collected in natural setting, another advantage is that you can judge and understand a lot better with the interviewee facial expressions and body language, it provides flexibility in formulating flexibility, lastly it also provide validity checks and in-depth analysis (Greenfield 1996 pg. 168) However there are also some disadvantages for using interviews are chances of misinterpretation are really high, the whole research is totally based on a small number of interviewees, whole research is based on the honesty of the informers, it is difficult to present a qualitative data, it can cause danger and discomfort for the researcher, lastly In interviews chances of misunderstanding between the interviewee and researcher are quiet high. (Greenfield 1996 pg. 168)

This research will also include quantitative research methods, There are specially designed questionnaires, which focus on the research topic, and employees are requested to fill the questionnaires. Questionnaires have three types of questions behavioural, Attitudinal and classification. (Hague 1993) research questionnaires will include all three types of questions to make sure that all the aspects of rewards and motivation are fully covered. John Milne explains the Reasons for using questionnaires as a research method are firstly questionnaires are collected in a standardised way and are objective, secondly it is a quicker way of collecting information and a lot of information can be collected, large number of respondents can be used for research. Thirdly it is easy to calculate and present the result of a research through questionnaire. Lastly employees ca more easily give their opinion as i face to face conversation they are cofused and prefer giving answer what resercher wants to listen.

However at the same time John Milne explains some drawbacks of using questionnaires, firstly questanaire is filled sometimes long after the event has occured so there are high chances that participant may forget the important issues and points of that problem. Secondly open-ended questions birng in alot of data which can help resreceher to analsyse and evaluate in detail.Another drawback is sometimes participant just fill questanaire just for fun and do not may alot of attention which can effect the whole resrach.Lastly it is possible that participant may not be able to understand the question due to some resons but this can lead to low validity of results and the reserch will not be able to reflect the original position. There are several differntreserch method and each one have some good and bad points,and this result will use the two methods, interview and questaonnaie will be used.

Thereare no special ethics issues in this research, yet some small issues like not revealing the personal identity of the people who is giving interview and filling questionnaires. Employees part of the research do not want to reveal their name as they can face some severe action and criticism from the mangers or top management. Secondly, they want me to publish my research and before submitting, they will want to read the research. Lastly, they expect that we will keep their data secure and will never misuse it.
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