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1、HRM and Remuneration Systems,Rewards&methods of reward,The wage-work bargain.Central to employment relationship®ulationOffer Acceptance-Consideration(incentive package)unilateral or bargained?Buyer-seller power?Tailored or standardised?Individual or collective?The Cash NexusEnid Mumfords contract
2、sRewards systems vs.Payroll admin.,Pay-offs in the Employer-Employee Relationship,Knowledge&skill Er wants know-how,competence,experience.Ee wants to be put to good use&be developedEfficiency/rewards Er wants performance&quality output.Ee wants equity,felt-fair rewards&opportunityEthical-values&comm
3、itments in right/wrong behaviourPsychologicalMgt&co-workers want committed,loyal,motivated people.Individual wants satisfactionTask structure-work within policy,procedure&technical constraints.Jobs,work arrangements,(Mumford 1972),Keep-T,Issues in pay policy,package&administration,Integrate Ee.perfo
4、rmance with competitive advantage?Smooth,reliable,low risk,transactions.Handing over the cash:personal or separated?Traditional methods prevail.Where are the innovations?Pay policy-closet management?HRM policy-maker,practitioner&academic interests?Rewards central to HRM models?Theory&practice.Partia
5、l?Coherent?robust?Thin,incomplete picture and treatment?,Tixylix Prescription(read the label),Proposition:Reward system X will benefit organisational efficiency&effectivenessEmployerOur policy should properly reward&motivate staff to contribute effort,expertise&commitment in line with organisational
6、 objectives.Our reward system must be right for the firm(pay bill&administration)&employees(attracting,motivating,retaining the right staff).Employee(felt-fair,equity,expectancy theory)“the reward system should reflect my work&its demands on me,my value(for my kind of work)within labour market(inter
7、nal/xternal).It should satisfy me when comparing my rewards with what others get for the same kind of work”.,Context and Pressures,Porter-product innovation+cost leadershiplow labour costs vs.recruitment,retention&motivationRate for the job job class&work technologyLocation in low wage economiescomm
8、itment&flexibilityConvergence:white/blue,office/factory competenciesTeam-working,flexibility,harmonisationRegional market forces(the City,Leeds,Delhi).Labour mobility(between occupations+Europe)Salary leagues(MNCs&Euro/global manager),Examining Reward System Concepts and Practices,Patterns and trend
9、s in policy&practice?Propositions and Assumptions?Tests for the propositions/hypotheses?Competing concepts and perceptions?Veracity of the imperatives?,Determinism,Rhetoric and Verification,Debate:determinism:individual performance payPay individual/group performancePRP paradigm shift rhetoric vs.pr
10、actice sea change or traditional ad hoceryextent of change(coverage&operation)innovation-for the few or the many?normative assumptions in the use of reward systemscentral to or marginal in SHRM?,Under utilised&sophisticated mechanisms or crude,problematic tools to drive performance?,Evidence for,rew
11、ard system developments reinforcing organisational transformationsSome new,distinctive features in policy&practice.Do the“claims”-deliver?Are our concepts of appropriate or viable pay rigorous enough?What are these perceptions and what hold do they have?,Payment Systems 1945 2000,Distinctive feature
12、s?How have systems changed over the years?Current trends?A Holy Grail quest for a perfect pay system?Fads,fashions&cycles.Since 1945Traditional systems have evolved slowlySome innovative and marginal changesNew solutions associated with STEEPLE.,Design Features of Pay systems,Monetarynot related to
13、performance-timeperformance-linkedOutput,%,PRP,merit pay,commission,skill-basedcollective-output schemes Corporate performance related bonuses+profit participationMonetary-equivalentCar,phone,holidays,loans,accommodation,fees,vouchersDeferred(promotion,pension)Non-monetary-status,recognition,plaques
14、,empowermentIntrinsic benefitsNegatives pressure,penalties,harassment side-lining,dismissal,Sam Eilon on Reward Schemes,Eilon,S,1992,Management practice&mispractice,Routledge.http:/sol.brunel.ac.uk/jarvis/bola/rewards/rewards.htmlintegral to managerial planning and control processes.should not be co
15、nsidered in isolation.Rules guide,but note the contradictions&dilemmas.Rigid implementation may have awkward consequences.There is more to a simple carrot&stick,effort-reward relationship.,Eilons Rules of Thumb,Incentives-not confined to monetary-see non-monetary.Attainments rewards:levels&rewards s
16、hould be clear.The actual effort/responsibility link?Individual goals/attainment&dept/orgn.GoalsIndividual attainment vs.what others must achieve?Rewards for helping others-support staff.Re-structuring:jeopardise reward possibilities?Products&working practices change?Future pay prospects should not
17、undermine what Ee has already achieved.Benefit in penalising undesirable results or behaviour?Periodic Reviews-scheme objectives must remain valid.,Components in pay by time schemes,simple to administerdefined time F/T,P/T,mixed-time,casual.No time,no pay?Hourly,weekly,annualPremiums 1.5T,2T,nights,
18、“door knob syndrome”Control mechanisms&tools clocks,supervision,time sheets?Job evaluation-evaluate the job not the person doing itFlexi-time schemesSupervision&performance“When the cats away”?Assume trust,confidence,competence&diligenceOff-site working.Is actual presence necessary?Work for Er in Er
19、 time versus.in your time?Assume fidelity,care,good-will,cooperationLife sentence?,Pay for performance systems,Job definition,MbO,method&work study.Information and control.,PRP,merit pay,skill-based schemes,Information requirementsManager appraisal and judgementMeasurable,targeted PRP(narrowly defin
20、ed).Pay linked toconcrete individual or group targets.Individual merit(behavioural)traits:e.g.flexibility,cooperation,punctuality.Staff appraisal rating criteria.Skill,physical&mental capabilities.Automatic on qualification?Performance-related?Annual increments?,Collective-output schemes,work group,
21、plant or company performance-bonus(fixed or%of standard pay)automatic for achievement of targeted output,profit,sales or added valueGenerally do not require employee appraisal or managerial discretion(?.not to pay.?).Scheme formula:complexity,visibility of targets achieved.,Employee share ownership
22、schemes,Senior manager-ownersExtension of ownership&participation pay?Social engineering assumptionsRewards from capital gains÷nds long termThe small print share prices can go up or down!Dependent upon capital being available-to buy shares for employees.,Lupton&Gowler:Selecting a payment syste
23、m(1969),Analytical framework for“selecting”a payment systemcontingency approach(normative&rational framework)Proposition:choices can&should be based upon recognition of managerial goals manager appreciation of internal&external circumstances.BUT radical choice or do P-systems merely evolve?Tradition
24、al schemes.vs.what alternatives?Managerial&employee preferences?Prevailing expectations.What trends are discernable?,Pay scheme development-contingency and choice,Proposition:design the P-system to fit the goal/circumstances.True?How?Evidence?managerial response to internal&external demands.Why thes
25、e designs?Reactive or proactive?How&how frequently?Who is influential in design?Institutional promotion&reform of pay determination.(informed)prescriptions&recommendationsNBPI,CIR,ACAS,CBI,IoD,IPD,TUs,DfEE.ACAS on appropriateness a payment system has a better chance of success if it is carefully sel
26、ected&shaped to meet the specific needs of the organization&work group in which it is to apply.,Pay developments,piecework schemes 1945-1960 stimulated by labour&product market pressures.well suited to high-volume,low-cost productionwhat were the problemsItemisation&local bargaining?Gold-bricking?pr
27、oductivity bargaining 1960s to mid-1980s search for control&societal justification(incomes policy)Manning,demarcation&craft flexibility.Job enlargement&work restructuring.Participation in EquityPerformance-related pay 1980s-to date,Governmental intervention,Incomes policies national and public secto
28、r controlsPrivatisation&deregulation of labour marketEmployee share ownershipNational minimum wage&48-hour rulingEqual pay&equal opportunitiesTaxationCastigation of high executive pay but no regulation.,HRM models?,Proposition:Reward.a key policy-making lever to achieveCommitmentFlexibilityQualitySt
29、rategic integration.Links between rewards&such goals are not new.But petitive advantage&the argument for strategic integration.Is there evidence?,Tight and Loose Views,Looserresponses are more ad hoc,reactive&opportunistic.Tightcoherent,managerial rationale exists-reward system selection sensitive t
30、o business circumstances&needsrewards underpin broader business plansdiversification&product life cycle strategies company re-structuring,flexibility&culture changesupport other HRM interventions.ButAre the efforts so tightly articulated?Theory+consistency in application&outcome.,Have organisations
31、changed their approach to pay?,individual performance-related or merit-based pay schemesindividualisation of pay-public&private-filters down the hierarchy.ACAS(1985-88)40%modify P-systems closer pay-performance link.By end 19924,000 approved profit-related pay schemes(1 million employees)2000 employ
32、ee share ownership(3 million)WIRS 1990merit pay more prevalent at senior manager levelevidence in admin.(33%)+skilled manual(25%)Are these deep,structural,qualitative,strategic changes?,Pay and HRM goals:commitment,flexibility&quality.,features and contexts?potential tensions in the linkages?the dyn
33、amics for change?,Reward&commitment,long history,on-going management concernmotivation&performance,incentives to strengthen identification&loyalty Taylor,McGregor&Herzbergweaken competing(often collective)interestsHalt the dilution of managerial prerogatives.PEST conditions help managerial recoveryN
34、ew participation e.g.share ownership&profit-sharingstatutory support,But are the schemes effective?,Research into participation&staff attitudes returns ambiguous results.Some positive impact.with doubtsProblem:Isolating the participation variable&corporate performance.Other involvement techniques in
35、 the change programmes.Blinder(USA study)the way workers are treated may boost productivity more than the way they are paid.,Visible,meaningful ways to lock-in the individual.,Dialogue&bonding.Performance appraisal“forces”direct communicationStrengthen line manager employee relationshipIndividualise
36、 the effort-reward bargainNo external 3rd party.,Undermine collective bargaining?,Profit&share initiatives reduce TU orientation.PRP schemes-less in evidence where TUs are strong.De-recognition?,Reports on,British Rail&TSSA-10,000 middle&junior managersPRP&individual senior manager contracts-a hint
37、of TU de-recognition(Thames Water,Amersham&BT).NUT&PRP-related teacher appraisal Some TU say in PRP operation.agree performance criterianegotiate size of kitty vs.its distributionrepresenting appeals against appraisal&pay judgementsdisclosure of information via Central Arbitration Committee&monitor
38、system fairnessA few unfair discrimination cases(sex/race&merit-pay),PRP vs.Commitment-compatibility in practice,Individual PRP rewards narrow&short-term achievement?undermine group cooperation&longer-term goals?Corporate financial constraints+evidenceweak results may limit profit-sharing pay-outs&b
39、onusesDisappointment-disaffectionProcedural injustice subjectivity&inconsistency disaffectionindividual PRP:more in tune with hard HRM.employee appraisal-a judgmental processpenalties from failure to meet standards.management control over the pay bill?Individual deals across-the-board,cost-of-living
40、 increases.,Compare with soft developmental HRM,Reward&employee flexibility in tasks/duties,perennial managerial goal.Manager prerogative to distribute work“rationally&flexibility”?Countervailing employee pressure to structure the use of labourReasonableness under contract(not in my job description)
41、the Unioncustom&practice,(worker culture)Job-evaluated grading structures facilitate flexibility in the performance of tasks.True or false?,Job-evaluated grading structures,Large mechanistic,bureaucracies.Principlesestablish a internally consistent set of job ratesevaluate the job not the person doi
42、ng it.ensure relativities:internal equity.Systematically compare&measure different jobs within the same organizationIf individual performance merits it-PROMOTE.JE grading structures lack sensitivity to external market pressures.STEEPLE pressuresflexibility imperatives intensify,Reward structure ossi
43、fication,Civil Service&local authorities-pay supplements for shortage jobs(response to labour market).Can unwieldy grading structures&demarcations cope with job redesign,technological change&new production methods?team or cellular working&flexibility across skills&tasks?changing organizations-lean,f
44、lexible structuresdynamic circumstances-stress adaptive performance beyond rigid,ossified job descriptions&evaluated grades.,Grow,develop,perform!Out-grow job&be promoted!,Job evaluation not abandoned.WIRS 1980-90-workplaces with J.Eval schemes rise from 21-26%Countervailing pressure-equal pay legis
45、lation(evaluated structures)Incompatibility of job-evaluation with PRP?Modify the structures.How?Base grades on generic job descriptions&broad bands(flexibility of task performance).Move from grades&fixed increments,to min-max ranges&give scope for individual performance.,Growth structures-formal ca
46、reer paths&criteria.,professional and technical job familiesachievement of qualifications&competence standards(cf.promotion only when vacancies arise).harmonise manual&white-collar terms&conditionsmulti-skillingPromotion route for the good technician,nurse,scientist or engineer not because you are a
47、 manager.The nursing consultantThe technical consultant(programmer),A surfeit of riches,higher Ee expectations not all can be fulfilled.pay for unwanted skills?Flexibility we dont need.extended grades,growth&skills acquisition structures.Managers over-estimate&dont use.Pirelli AberdareLow staff turn
48、over&local unemploymentSuspend the skill acquisition scheme,PRP may inhibit encourage flexibility.,personalized targets can encourage a rigid,narrow focus on short-term objectives.Less attention to daily tasks than target sheetsEe as a labour contractor,performance judged on contract measures vs.wid
49、er performance criteria(future&potential).if targets are uncertain,fixed pay contracts restrict the scope for flexibility&discretion.,Reward&quality,quality cost or volume todays imperativeleaner production-combine speed+quality maintenanceTQM initiatives raise questions about the structure&administ
50、ration of reward systems.Schonberger(1992)Once reward&recognition were reducible to little more than two monetary numbers,wages&benefits.Since TQM is a continuous push for improvement,the management system must itself continuously shift,prod,encourage,praise&reward(p.21).Implications for the range o
