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DEVELOPMENT OF A TOTAL REWARD MODEL FOR

APL CARTONS (PTY) LTD

Jacques Corn Matthee

Research report
presented in partial fulfilment
of the requirements for the degree of
Master of Business Administration
at the University of Stellenbosch

Supervisor: Prof. L.A. van Dyk

Degree of confidentiality: Grade C

Date: December 2009

ii

Declaration

Hereby I, Jacques Corn Matthee, declare that this research report is my own original
work and that all sources have been accurately reported and acknowledged, and that this
document has not previously in its entirety or in part been submitted at any university in
order to obtain an academic qualification.

J.C. Matthee

31 October 2009

Copyright 2009 University of Stellenbosch


All rights reserved

iii

Acknowledgements

I would like to acknowledge my utmost gratitude and sincere appreciation:

To Prof. Laetitia van Dyk for her time and guidance.

To the personnel at Bellville Park Campus for their support and interest.

To APL Cartons (Pty) Ltd for the time allowed and the financial support.

To my parents-in-law for their assistance with the children.

To my own parents for their interest and support.

To my children, Elze, Jana and Rossouw, thank you for understanding. My hope is that
the yes, I can will replace all the memories of no, I cant.

To my wife, Marelize, for all the support and time spent alone with the children.

To my Lord to whom belongs all the glory.

iv

Abstract

The world of work has changed during the last two decades. This is the result of factors
like increased competitiveness, globalisation and other economic realities. The loyalty
between employee and employer has been influenced negatively by these changes.
Employers started to retrench employees if cost had to be saved to increase profit. The
once long-term employment relationships were replaced by short-term relationships. The
available amount of people with the necessary skills also decreased. This resulted in
employers finding it more difficult to recruit the right skills and to retain the employees with
the right skills. A third important factor is for employers to ensure that the employees are
fully engaged while in employment.

The study specifically aimed to increase the ability of APL Cartons (Pty) Ltd to attract,
retain and engage employees. Specific focus was placed on employee engagement
because of the very low level of employee turnover. It is critical for the organisation that
while employees are in employment they are fully engaged.

An literature study was done on the concept of employee engagement.

Different

definitions were identified as well as the drivers of employee engagement. The positive
impact on employee engagement is also discussed. One of the most critical factors of
employee engagement was identified as the relationship between an employee and
his/her immediate supervisor. The financial benefits of increased employee engagement
is also identified.

The focus of the study then moved to the concept of total rewards. The changes from
compensation only to total rewards were explained. Through a literature study different
total reward models were discussed. The benefits moving to total rewards were identified.
The Q12 employee engagement questionnaire of Gallup was used to determine the current
level of employee engagement. Focus groups and interviews were used to understand
employees experience with the current reward offering of APL Cartons (Pty) Ltd. The
elements of the different total reward models, the result of the Q12 questionnaire as well as

the inputs from the focus groups and interviews were used to develop a total reward model
for APL Cartons (Pty) Ltd.

The study concluded by evaluating the developed model and made suggestions regarding
the implementation of the model.

vi

Opsomming

Die wreld van werk het die laaste twee dekades baie verander. Die gevolg van verskeie
faktore soos mededingendheid, globalisering en ander ekonomiese realiteite het die
lojaliteit tussen werkgewer en werknemer verander. Werkgewers het eenvoudig personeel
begin verminder indien kostes bespaar moet word om meer winsgewend te wees. Die
voormalige langtermyn verhoudinge het plek gemaak vir korttermyn verbintenisse tussen
werknemer en werkgewer. Die beskikbaarheid van mense met toepaslike vaardighede het
ook verminder. Dit het vir werkgewers al hoe moeiliker geword om toepaslike kundigheid
te werf en te behou.

n Derde belangrike uitdaging vir werkgewers is om die

werknemersverbintenis tot die maatskappy te verhoog terwyl die werknemer in diens is.

Die studie het spesifiek gepoog om APL Cartons (Pty) Ltd se vermo om toepaslike talent
aan te trek, te behou en te verbind te verbeter.

Spesifieke fokus is geplaas op die

werknemersverbintenis gedeelte, aangesien die maatskappy se arbeidsomset baie laag is.


Dit is dus krities om die werknemers wat in diens is, maksimaal te verbind.

n Volledige oorsig oor die konsep werknemersverbintenis (employee engagement) is


gedoen aan die hand van n literatuurstudie.

Die verskillende defenisies is bespreek

asook watter faktore bydra tot werknemersverbintenis. Daar is ontdek dat een van die
belangrikste aspekte die verhouding tussen die leier of toesighouer en die betrokke
werknemer is. Die finansile voordele verbonde aan verhoogde werknemersverbintenis is
ook gedentifiseer.

Die fokus van die studie was daarna op die konsep van totale vergoeding.

Die

verandering van vergoeding alleen na die konsep van totale vergoeding word bespreek.
Deur middel van n literatuur studie word verskillende vergoedingsmodelle bespreek. Die
voordele en bydrae van totale vergoedingsmodelle word ook bespreek.
Die Q12 werknemersverbintenis vraelys van Gallup is gebruik om te bepaal wat die huidige
vlak van werknemersverbintenis binne die maatskappy is. Fokusgroep besprekings en
onderhoude is gevoer met n steekproef van werknemers om te bepaal wat die ervaring is

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van die huidige vergoedingsaanbod van APL Cartons (Pty) Ltd. Die ontleding van die
vergoedingsmodelle, die uitslag van die Q12 vraelys en die insette van die fokusgroep en
onderhoude is gebruik om n totale vergoedingsmodel vir APL Cartons (Pty) Ltd te
ontwikkel.

Die studie sluit af deur die vergoedingsmodel te evalueer en n wyse van implementering
voor te stel.

viii

Table of contents

Page
Declaration

ii

Acknowledgements

iii

Abstract

iv

Opsomming

vi

List of tables

xi

List of figures

xii

List of appendices

xiii

CHAPTER 1: INTRODUCTION AND RESEARCH OBJECTIVES

1.1

Introduction

1.2

Background

1.3

Definition of the research problem

1.3.1 Main problem

1.3.2 Subordinate problems

1.4

Research objectives

1.5

Delimitation of the study area

1.6

Definition of concepts and terms

1.7

Research design and methodology

10

1.7.1 Research design

10

1.7.2 Research methodology

11

1.8

11

Data and treatment of data

1.8.1 Primary and secondary data

11

1.8.2 Treatment of data

12

1.8.3 Presentation of data

12

1.9

12

Framework for the proposed study

CHAPTER 2: EMPLOYEE ENGAGEMENT

14

2.1

14

Introduction

ix

2.2

Changes in the world of work

14

2.3

Employee engagement

19

2.3.1 Introduction

19

2.3.2 Definition of employee engagement

20

2.3.3 Drivers of employee engagement

22

2.3.4 Benefits of higher levels of employee engagement

39

2.3.5 Obstacles to employee engagement

42

2.4

42

Summary

CHAPTER 3: TOTAL REWARDS

44

3.1

Introduction

44

3.2

Context and principles of reward

46

3.3

Development of the total reward concept

48

3.4

Describing total rewards

52

3.5

Total reward models

57

3.5.1 WorldatWork total reward model

58

3.5.2 HayGroup engaged performance model

64

3.5.3 Towers Perrin total rewards effectiveness blueprint

72

3.5.4 The better workforce deal

75

3.5.5. Summary

78

3.6

78

Benefits of adopting a total reward approach

3.6.1 Introduction

78

3.6.2 Important benefits of adopting a total reward approach

78

3.6.3 Summary

81

3.7

81

Summary

CHAPTER 4: APL CARTONS (PTY) LTD EMPLOYEE ENGAGEMENT AND

82

CURRENT TOTAL REWARDS PROPOSITION


4.1

Introduction

82

4.2

APL Cartons (Pty) Ltd employee engagement

82

4.2.1 The Gallup Q survey instrument

82

4.2.2 Methodology

83

4.2.3 Results of employee engagement questionnaire

85

4.2.4 Interpretation of results

90

4.3

90

Current total rewards proposition

4.3.1 APL Cartons (Pty) Ltd human resource policy

91

4.3.2 Focus group results

95

4.4

Summary

CHAPTER 5: DEVELOMENT AND IMPLEMENTATION OF

101

103

APL CARTONS (PTY) LTD TOTAL REWARDS MODEL


5.1

Introduction

103

5.2

Development of new total reward model

103

5.2.1 Methodology

103

5.2.2 Contents of the new developed model

104

5.2.3 Evaluation of the total reward model

105

5.3

107

Implementation of total reward model

5.3.1 Branding the total reward model

107

5.3.2 Implementation of total reward model

107

5.4

110

Interventions needed to ensure success of total reward model

5.4.1 Total reward model elements which need to be improved

110

5.5

111

Summary

CHAPTER 6: SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

112

6.1

Summary of research results

112

6.2

Conclusions

113

6.3

Recommendations

114

LIST OF SOURCES

115

APPENDICES

122

xi

List of tables

Page
Table 2.1

Elements of strategic people framework

23

Table 2.2

Employment relationship aspects of the psychological contract

24

Table 2.3

Better workforce deal characteristics

26

Table 2.4

Employee types and what appeals and engages

29

Table 2.5

Positive related psychological elements of engagement

33

Table 2.6

The Conference Board employee engagement drivers

34

Table 3.1

Comparison between current and 2020 pay implications

56

Table 3.2

Characteristics of total reward model approaches

57

Table 3.3

Definitions of total rewards strategy model of WorldatWork

61

Table 3.4

Explanation of contextual aspects of WorldatWork total rewards


model

62

Table 3.5

Towers Perrin four quadrants of total reward

74

Table 3.6

Top 10 drivers of attraction, retention and engagement

75

Table 4.1

Distribution of APL Cartons (Pty) Ltd employees into strata

84

Table 4.2

Distribution of APL Cartons (Pty) Ltd sample employees

84

Table 4.3

Results of Gallup 12-item survey instrument

86

Table 4.4

Linkage between development elements and Q questions

87

Table 4.5

Summary of APL Cartons (Pty) Ltd compensation offering

92

Table 4.6

Summary of leave benefits at APL Cartons (Pty) Ltd

93

Table 4.7

Summary of other benefits at APL Cartons (Pty) Ltd

94

Table 4.8

Number of answers for focus group questions

97

Table 4.9

Number of different concepts for focus group questions

98

Table 5.1

Elements and sub-elements of APL Cartons (Pty) Ltd total


rewards model

Table 5.2

Explanation of elements of APL Cartons (Pty) Ltd total reward


model

Table 5.3

Table 5.4

104

105

Evaluation of APL Cartons (Pty) Ltd model against total reward


characteristics

106

Total reward elements and interventions needed to improve them

110

xii

List of figures

Page
Figure 2.1

Commitment pyramid

30

Figure 2.2

HAD employee engagement matrix

31

Figure 2.3

People value proposition

32

Figure 2.4

Linking employee engagement to financial performance

40

Figure 3.1

The link between total rewards and Maslows hierarchy of


needs

47

Figure 3.2

WorldatWork total rewards model

59

Figure 3.3

WorldatWork total rewards inventory checklist

63

Figure 3.4

Components of total rewards

65

Figure 3.5

The Hay Group engaged performance model

66

Figure 3.6

Hay Group Total Reward Framework

72

Figure 3.7

Towers Perrin Total Rewards Effectiveness Blueprint

73

Figure 3.8

Total reward components The better workforce deal

76

Figure 4.1

Four dimensions of employee engagement

83

Figure 4.2

Four dimensions of employee engagement and hierarchy of


camps

86

Figure 4.3

Impact of personal and group leadership on behaviour

88

Figure 4.4

Employee engagement positioning of APL Cartons (Pty) Ltd

89

Figure 4.5

Individual employee engagement results

90

xiii

List of appendices

Page
Appendix A

Q Employee engagement item questionnaire

122

Appendix B

All 414 answers from the focus group discussions

123

Appendix C

Different concepts that were identified from focus groups

134

Appendix D

Box of rewards

146

CHAPTER ONE
INTRODUCTION AND RESEARCH OBJECTIVES

1.1

INTRODUCTION

Organisations have since the 1970s experienced unprecedented challenges of which the
following are the most prominent:

Dramatic changes in the workplace, including increased awareness of conflicts caused


by family, home and work demands.

Workforce demographic changes that challenged the traditional working-father stay


home-mother model of previous decades.

Fewer resources available for pay increases.

Tremendous advances in technology and the emergence of new business


opportunities.

Advancement of pay-for-performance practices.

Unprecedented mergers, acquisitions and global competition (WorldatWork, 2007b).

The concept of long-term, one-company, employee started to change in the 1980s when
organisations started to retrench employees.
suffered.

Employee loyalty towards organisations

It created employees who are cynical and would not think twice to do job-

hopping. Employees are less motivated and not willing to go the extra mile for a company.
This translates into poor efficiency resulting in organisations not achieving the desired
results for all stakeholders (Longnecker & Shanklin, 2004: 8).

According to a global employee attitude survey, almost 80 per cent of all employees are
disengaged and would rather not be at work (Finweek, 2007a: 46).

Most organisations try to address this by increasing the pay levels and hope for the best.
This would result in higher base pay, larger incentive opportunities, more share options
and more benefits. They try to outbid the other companies and buy the talent they need
(Zingheim & Schuster, 2000: 16).

The approach of only paying more will not work because employees value different things.
The different generations in the workplace value different rewards. Most of the times
money is not one of the most valued rewards. In a study done in 2002 by an American
consulting firm, cash reward ranked the 15th most valued motivator in the workplace. The
first three motivators were learning activity, flexible working hours and verbal praise
(Reynolds, 2005: 1415).

Richter (2003: 17) explains that compensation can be described as a dissatisfier or


satisfier.

It can therefore not live up to the objectives of attracting, retaining and

motivating employees. Employees will never appreciate pay programmes when they are
right in the context of fairness because fairness is expected. If the pay programmes are
not fair, it will lead to dissatisfaction.

Organisations are increasingly going to struggle with recruiting and retaining employees if
they continue with their current reward packages focusing mostly on compensation. If the
reward offering is not in line with what people value, they would lose the war for talent
(Reynolds, 2005: 13).

Asinof (2006: S6) argues that organisations must make plans that would make people
want to stay rather than making plans to keep people from leaving.

Human resource professionals realised that there is a need for a value exchange
between employee and employer.

Therefore, successful organisations realise that

productive employees create a value for their organisations in exchange for tangible and
intangible value that enriches their lives.

In this exchange relationship the employee

provides time, talent, effort and results. The employer offers total rewards valued by the
employees. The thinking regarding total rewards started in the 1990s as a way of thinking
regarding the deployment of compensation and benefits, combined with the other tangible
and intangible rewards organisations seek to attract, motivate and retain employees. A
few total reward models exist today in theory of which all recognise the importance of
leveraging multiple programmes, practices and cultural dynamics to satisfy and engage
the best employees contributing to improved business performance and results
(WorldatWork, 2007b).

Total rewards attempt to optimise organisations reward offering to yield the greatest return
for the cost involved with the reward offering to employees. This involves integrating
diverse programmes that are not necessarily perceived as rewards by everyone.
Practices such as achieving greater employee productivity through flexible working hours,
reducing voluntary turnover with career advancement or training opportunities, and
increasing employee engagement because of a robust performance management system
are all components of the total reward offering (Rumpel & Medcof, 2006: 27).

The case for a total rewards offering is in todays environment stronger than ever:

1.

Total rewards address todays business needs for managing costs and growth.
Research suggests that a more limited view of rewards can be more costly, because
organisations tend to respond to every situation with cash. Total rewards support
moving away from ineffective programmes toward those that help drive the business
forward.

2.

Total rewards meet the evolving needs of todays employees. As the workforce
continues to diversify, employees expectations change. A total rewards approach
better addresses many of these varying employee expectations.

3.

Total rewards fit with the movement away from cash and stock. As the role of stock
becomes de-emphasised in most organisations, the hunt is on for other items that
help redefine a compelling and differentiated offer in the market for talent. Total
rewards can help to do this (WorldatWork, 2007: 14).

The top five advantages of a total rewards approach are:

1.

Increased flexibility.

Employers need to start creating different blends of reward

packages for different workforce segments. This is particularly true in a global labour
market where workforce diversity is the rule, not the exception, and when specific
skills are in short supply. A total rewards approach, which combines transactional
and relational awards, offers tremendous flexibility because it allows awards to be
mixed and remixed to meet the different emotional and motivational needs of
employees.

2.

Improved recruitment and retention. Organisations are facing key shortages of bestin-class workers. A total reward strategy is critical to addressing the issues created
by the recruitment and retention. It can help create a work experience that meets the
needs of employees and encourages them to contribute extra effort, and developing
a deal that addresses a broad range of issues and spending money where they will
be most effective in addressing workers shifting values.

3.

Reduced cost of turnover. The cost of turnover, often the driver of recruitment and
retention, is sometimes invisible.

Estimates of the total cost of losing a single

position to turnover range from 30 per cent to 150 per cent of the yearly cost of the
position being vacant. In addition, the cost of turnover includes indirect costs such as
losses from customers and sales, as well as decreased efficiencies as productive
employees leave and the remaining workers are distracted.
4.

Heightened visibility in a tight labour market.

Talent shortages have become a

chronic condition of business life, and experts agree that the tight labour market is
going to get tighter. As a result, employers can no longer afford to simply view their
employees as interchangeable parts. Organisations quickly are realising that every
employee matters even more when there are not enough employees to fill the
available jobs. If people can find an environment that is more in accord with their
needs, they will make changes for that. Likewise, they will stay put when they feel
their needs are being met. By gaining a clear understanding of what employees
value, and mixing and matching rewards within a comprehensive framework,
companies can reallocate their investment dollars to match what employees say they
value most, and can communicate the total package versus a patchwork of individual
components.
5.

Enhanced profitability.

Employees want a new deal at the same time that

companies are struggling to deliver their financial targets and therefore are readily
cutting programmes to trim costs. To balance these two realities the reward offering
mix must change. What companies need to realise is that by remixing their rewards
in a more cost-effective way, they can strengthen the programmes and improve
employees perception of value without necessarily increasing their overall reward
investment. The challenge is to develop and implement a flexible programme that
capitalises on the diverse workforce. Valuing each employee includes understanding
that not everyone wants to work the same way or be rewarded the same way. To

achieve excellence, employers need a portfolio of total rewards plans (WorldatWork,


2007: 15 - 17).

1.2

BACKGROUND

APL Cartons (Pty) Ltd was established in 1988 by four of the biggest export fruit pack
houses. The reason for the establishment was to ensure the lowest possible price to the
shareholders on corrugating packaging.

A fifth shareholder, which is also an export fruit

pack house, joined the other four in 2000. Currently the company is the fourth biggest
corrugating manufacturer in South Africa. The biggest competitors are distributed all over
South Africa with factories in most of the cities. The only factory of APL Cartons (Pty) Ltd
is situated in Worcester in the Western-Cape province. The reason for this decision was
made to save on the cost of a head-office and to ensure the continuation of a specific
organisational culture, which is unique to smaller organisations. Although the only factory
is in Worcester, products are manufactured and distributed throughout South Africa and
neighbouring countries.

In a commodity market, cost is the most important aspect that is taken into consideration
when deciding on a supplier. The increasing fuel price is having a negative impact on the
continuous potential of the company to maintain its profit margins.

Distributing the

corrugating cartons to the different provinces and countries is starting to cost more than it
does for the companies with factories closer to those markets. There are only one or two
suppliers to the corrugating industry of the most important raw materials. This limits the
potential for negotiating price decreases or lower increases. The industry has surplus
capacity and competition between corrugating companies is fierce.

The potential of

increasing the product price to the market is limited with customers only accepting
increases when the price of paper increases.

The only method of maintaining the profit margins is focusing on internal methods.

This

can only be done by the employees working for the company and decreasing the amount
of waste and quality defects. The capacity of the company can increase if productivity is
increased. If the employees align themselves with the companies goals and expected
business results the challenges of the future could be addressed.

Employees must

therefore be motivated and focused on specific achievable targets. The first question
which arises is how engaged are the employees of the company.

In 2007 an organisational diagnostic questionnaire was distributed to 44 randomly selected


employees. The stratified random sampling plan was used. The two strata used were job
grade and whether the person was in a technical or administration position. The number
of the sample was calculated using the formula for sample size determination in the case
of sampling from finite populations.

The score for the dimension of aligned commitment was six out of a possible nine. When
using the stanine and aligned commitment scores the result can be interpreted as average
positive. This is better than 66 to 76 per cent of organisations or amongst the top 34 per
cent of organisations (Coetsee, 2002a: 22). Aligned commitment measures the extent to
which employees are:

focused on a shared vision;

driven by an identical value system;

have the necessary knowledge and information;

sufficiently empowered;

rewarded and recognised by rewards and other forms of recognition they value
(Coetsee, 2002b: 16).

The result on the aligned commitment score was quite a surprise because one of the
perceived strengths of APL Cartons (Pty) Ltd was the commitment of personnel towards
the companys vision and value system. Two dimensions, which had low scores, were
organisational attachment and remuneration satisfaction.

The responses on the remuneration satisfaction questions are not surprising, because few
people would answer that they are happy with their remuneration and benefits.

The

answers that were concerning were those under organisational attachment. It meant that,
although staff turnover is very low, the people did not really want to be at work. The
employees with this attitude wont be aligned and engaged with the business results. The
money APL Cartons (Pty) Ltd spent on remuneration is therefore not generating the

maximum return on investment.

Another worrying factor is the negative answer of

employees not perceiving a correlation between performance and remuneration. These


perceptions were supported by three years of participation in the Best Companies To Work
For Survey. The company participated in 2002, 2003 and 2005. Compared to the total
reward model principles, APL Cartons (Pty) Ltd employees do not experience a value
exchange as discussed earlier. The employee is therefore not aligned and committed to
the organisation which is evident in the withholding of time, talent, effort and results.

The ability of APL Cartons (Pty) Ltd to attract talented and skilled employees during the
last 10 years has declined. The time it takes to fill an industry specific vacancy increased
from 65 working days to 115 working days. During the last two years, the company started
to make sacrifices on recruiting industry specific employees to manufactured experience
employees. The time for recruitment did not decrease. When enquiring from prospective
employees the reason why they are not interested in moving to APL Cartons (Pty) Ltd, it is
the placement of the factory. They would prefer working in a city where there are more
career opportunities and they do not have to relocate if they changed jobs.
confirmed if the number of applicants is compared.

This is

For a position of an artisan, the

number of applicants would be about 10 if advertised in the Western Cape. If the position
of a personnel clerk is advertised in Worcester, the number of applicants would be 122.
The artisan would rather stay in Cape Town where there are more positions available and
the person can change for career development or compensation without relocation. The
supply of artisans is also becoming less because of a skill shortage. For the personnel
clerk position, the supply is bigger and people are not able to choose where they would
like to work.

Given the challenges of the future of APL Cartons (Pty) Ltd, it is critical to increase the
ability to attract and retain skilled and talented employees. If the company offers a mix of
rewards which potential employees would value, the ability to attract and retain the right
employees could increase. When the employees of APL Cartons (Pty) Ltd experience the
necessary value exchange between the rewards they are receiving and their performance,
the level of engagement and motivation will also increase.
achievement of business results.

This will ensure the

It is therefore critical that APL Cartons (Pty) Ltd start to move away from focusing only on
the compensation element of total reward and develop a total reward model. If the total
reward model is developed correctly, it will lead to the benefits of a total reward model
which has already been discussed. It will also lead to the improvement of the business
results of the company.

1.3

DEFINITION OF THE RESEARCH PROBLEM

1.3.1

Main problem

The main problem of the research is the development of a total reward model which would
assist APL Cartons (Pty) Ltd to engage employees with the business objectives of the
company. Employee engagement could be one of the factors contributing to improved and
sustainable business results.

1.3.2

Subordinate problems

The subordinate problems which would also be addressed in attempting to solve the main
problem are the following:

Determining the current reward offering of APL Cartons (Pty) Ltd.

Determining the current level of employee engagement.

Identifying the rewards which can be added to the current reward offering.

1.4

RESEARCH OBJECTIVES

The objective is to develop a total reward model which could help APL Cartons (Pty) Ltd to
increase the following aspects:

The ability to attract and retain talented and skilled employees at all levels.

The employees levels of engagement.

1.5

DELIMITATION OF THE STUDY AREA

The study of rewards is very comprehensive with the elements of compensation being a
study field on its own. The research report focuses on the elements of a total reward
model and no in-depth discussion on a specific element will take place.

To ensure the most relevant information for the research report, only literature which was
published during the last 14 years was used. The only exception would be to explain
original theories or to discuss the origin of models.

1.6

DEFINITION OF CONCEPTS AND TERMS

The following terms to be used in the study project are defined as follow, in an effort to
further clarify and/or delimit the topic:

Employee

An employee is normally somebody who is hired to do


specific tasks. In the APL Cartons (Pty) Ltd context it is all
permanent employees employed by the company and
excludes any temporary and outsourced labour.

Engagement

A heightened emotional connection that an employee feels


for his or her organisation, that influences him or her to
exert greater discretionary effort to his or her work.
(Management-issues, 2007).

Model

A simplified representation of system or phenomenon.

Motivation

Motivation refers to the interaction between forces within


the individual and environmental forces that arouse and
direct persistent behaviour (Coetsee, 2001: 17).

Organisation

A consciously coordinated social unit, composed of two or


more people, that functions on a relatively continuous basis
to achieve a common goal or set of goals (Robbins, 2003:
4).

ODQ

Organisational diagnostic questionnaire.(ODQ) The level of


motivational climate of a company is measured by the
ODQ.

10

Total rewards

Total rewards encompass all the elements of what it means


to come to work (Wilson, 1995: 3). This includes monetary
and non-monetary return provided to employees in
exchange for their time, talents, efforts and results.

1.7

RESEARCH DESIGN AND METHODOLOGY

1.7.1

Research design

The research report consists of three different phases.

1.7.1.1 Phase one


This phase consists of exploratory research to determine the changing needs of
employees and employers with regard to the role rewards play in achieving business
results and ensuring engagement of employees. The role of total rewards in the attraction,
retention and motivation of employees will also be researched.

Different total reward

models will also be researched to determine the contents of each model.

1.7.1.2 Phase two


The contents of APL Cartons (Pty) Ltd current total reward offering must be determined.
The different total reward models identified will be used as the basis for determining the
current reward offering. The importance of specific rewards will be determined during this
phase as well as determining rewards that the employees have a need for and currently do
not form part of the reward offering. The current level of employee engagement will also
be determined.

1.7.1.3 Phase three


A comparison between the total reward models identified in phase one and the current
reward offering as identified in phase two will be done in this phase. A total reward model
will be developed for APL Cartons (Pty) Ltd taking the comparison into consideration.

11

1.7.2

Research methodology

1.7.2.1 Phase one


The necessary information for this phase was collected by doing a literature study on the
changing world of work and the impact of the changes on the role reward plays in the
employee and employer relationship.

Different total reward models were researched in

applicable literature, as well as the necessary criteria for a successful total reward model.

1.7.2.2 Phase two


Empirical research was necessary to determine the current total reward offering of APL
Cartons (Pty) Ltd. The companys policies, procedures and practices regarding reward
were studied to determine the current total reward offering. To determine the importance
of the contents of the current reward offering, employees were asked in interviews and
focus groups. The employees were also asked if there are specific reward offerings they
feel are important to add to the current reward offering - aspects they add value to and
would influence their engagement with the company.

The current level of employee

engagement was determined by the use of the Gallup Q12 employee engagement item
questionnaire. The number of employees participating in the questionnaire was sampled
using a stratified random sampling plan.

1.7.2.3 Phase three


This phase focused on integrating the information obtained in phases one and two to
develop an APL Cartons (Pty) Ltd unique total reward offering. The model must comply to
the success factors as determined in phase one of the research.

1.8

DATA AND TREATMENT OF DATA

1.8.1

Primary and secondary data

The primary data to be used was collected by using interviews, focus groups and
questionnaires. The data was gathered specially for this report.

The secondary data used is relevant theoretical literature, as well as company information.
The company information is mostly policies and procedures that were studied.

12

1.8.2

Treatment of data

The number of employees selected for the questionnaires was calculated using the
formula for sample size determination in the case of sampling from finite populations. The
population was divided in different strata according to job grade and whether the employee
works shifts or not. The reason for this classification is the lower the job grade the higher
the income of the employees. The writer would like to determine if more senior personnel
are more engaged than lower level employees are. The classification on shifts is also to
determine if employees working shifts are more or less engaged than employees not
working shifts.

Employee specific information was obtained using interviews.

Focus

groups were used to clarify certain trends that were identified in the analyses of the
interviews.

The employees were selected randomly by using an Excel spreadsheet

function, which generates random numbers between specified numbers. All employees
were divided in the different strata. Each employee was numbered from one until the last
number of the employee in that stratum.

Using the Excel spreadsheet the specified

number of employees was randomly selected from the strata.

The focus groups interviews were done for the employees in production working on the
production lines as well as administration. For the middle and senior management level
individual interviews were scheduled. Their superiors selected the individuals participating
in the focus groups and interviews. The results of the focus groups and interviews were
combined to create a report showing what employees currently value from the reward
offering of APL Cartons (Pty) Ltd.

The rewards that could assist in increasing the

satisfaction level of employees also form part of the report.

1.8.3

Presentation of data

The secondary data used in the research report will always be used with reference to the
source of the data. The results of primary data will as far as possible be shown in the
report and if not possible as an addendum in the research report.

1.9

FRAMEWORK FOR THE PROPOSED STUDY

The research project consists of seven chapters. The content of each chapter is as follow:

Chapter One is the introduction and background to the research objective.

13

Chapter Two investigates the importance of engaged employees.

Chapter Three studies the concept of total rewards.

Chapter Four determines the current level of employee engagement at APL Cartons
(Pty) Ltd as well as reward offerings valued by APL Cartons (Pty) Ltd employees.

Chapter Five uses the information from Chapters Three and Four to develop a new
total rewards model for APL Cartons (Pty) Ltd.

It also mentions the process of

implementation of the new model.

Chapter Six will provide an overview and comment on the achievement of the
research objective.

14

CHAPTER TWO
EMPLOYEE ENGAGEMENT

2.1

INTRODUCTION

Rapid change in the workplace dynamics during the last decade has lead to the increased
importance of employee engagement discussions at board level meetings. The chapter
starts with a brief discussion about the changes that have affected organisations and the
employer and employee relationship.

2.2

CHANGES IN THE WORLD OF WORK

During the last two decades, the playing field for organisations has changed rapidly from
being relatively stable, simple, orderly, predictable and localised, to one of radical change
and heightened complexity, chaos, ambiguity, and seamlessness. The new order dictates
that organisations must respond twice as fast; deliver twice as much at twice the speed, at
half the cost and within half the accepted product or service lifespan. The product or
service must be delivered on an ongoing basis, everywhere, at any time with anyone and
anyhow.

The critical success criteria of responsiveness, innovation, speed, flexibility,

value add, quality and cost effectiveness are forcing organisations to make the seemingly
impossible, possible if they want sustainable success (Veldsman, 2008).

According to Burke and Cooper (2002: xi) there is an increasing number of companies
who are downsizing, restructuring and outsourcing which means that more employees
would be selling their services to organisations on a short-term contract or freelance basis.
This has also led to job losses and continued change. Fewer people are doing more work
and feeling more insecure than in the past. The rapid expansion of information technology
also means that because of information overload the pace of work has accelerated.

Some of the dramatic changes affecting work and organisations include:

increased global competition;

the impact of information technology;

the re-engineering of business processes;

15

smaller companies that employ fewer people;

the shift from making a product to providing a service;

the increasing disappearance of the job as a fixed collection of tasks.

These forces have a major impact on all economies. The most significant impact of these
forces was on the increase of job losses (Burke & Cooper, 2002: xii).

This has resulted in organisations needing to adapt to survive. Some of the methods used
to ensure survival are restructuring, right sizing and retrenching. The concept of long-term,
one-company employee has changed because of lay offs (Longnecker & Shanklin, 2004:
8).

The impact on the workplace of the rapid changes was major. In studies done in Europe,
it was found that employee satisfaction levels during this time have dropped to 53 per cent.
The absenteeism rate increased. The changes also increased the number of divorces
because of more two-earner families which emerged.

The number of one-parent

households increased by fourfold. The number of hours worked by employees increased


radically which also put pressure on family and marriages. An insidious work environment
was created by an increase in outsourcing of activities. Job security increased, morale
was lower and motivation and loyalty were negatively affected.

Most of the changes

increased the number of people who were without work. Organisations were seen to be
losing the right mix of human resource skills and experience (Burke & Cooper, 2002: xv).

The changes created a job-hopping and cynical workforce with little company loyalty.
Employees are less willing to go the extra mile for a company. The challenge today is for
organisations to rebuild employee loyalty and trust. Management of these organisations
has, however, a powerful concept which they can use to address these issues the
concept of total rewards (Longnecker & Shanklin, 2004: 8). An explanation of the concept
will be done further in the research.

Since the 1970s, the growth rate of the labour force has been decreasing with the
passage of each decade. The expectation is that this trend will continue in the future. The
growth rate in the 1970s was peaking at 2.6 per cent annual growth and is currently at a

16

0.6 per cent annual growth rate. During the next two decades, the baby-boom generation
will start moving out of the labour force. The baby-boom generation refers to people who
were born between 1946 -1964. The percentage of people older than 55 years in the
labour market is continuously increasing. The danger of this tendency is that many of the
older employees will start to retire, which will result in a loss of much-needed skills and
significant amounts of institutional knowledge.

Several key factors will affect the

composition and growth of the labour force during the next 50 years. The most important
of these are:

The impact of the aging baby-boom generation on the labour force.

The stabilisation of womens labour force participation rates after years of remarkable
increases.

The increasing in racial and ethnic diversity (Toossi, 2006: 19-20).

The changes in the demographics are a contributing factor to a dip in the talent pool.
Together with this dip the traditional model based on company loyalty, working your way
up the ladder, and paying your dues is not relevant anymore. People are constantly
looking around to see what they will be offered.

In the old days, companies offered

employment packages around compensation and benefits, creating a one-size-fits-all


remuneration package.

This concept, however, has given way to the total rewards

concept which makes provision for other important aspects of the work experience (Asinof,
2006: S4).

The current changes in the workplace will transform the competition for talent.
Competition will intensify with employers trying to differentiate themselves from their talent
competitors. The biggest challenge will be to fill higher-level professional service and
managerial positions. The war of talent will most likely be a series of skirmishes fought in
critical talent occupations (Linkow, 2006: 29).

The HayGroup conducted a global study in November 2008 to determine how


organisations are changing their human resource priorities and programmes. The five
biggest concerns for organisations were:

17

retaining top talent or critical skills;

maintaining and affording competitive pay;

maintaining employee engagement and motivation;

career development and training;

recruiting top talent and critical skills (Royal & Masson, 2009: 9).

Ridout (2007: 43) discusses the difficulty in determining the extent of the skill and talent
shortage in South Africa. The insufficient information that is available is conflicting. South
Africa is a participant in the global war for talent. Prospecting for talent or trying to retain
talent that is emigrating is difficult when offers of crime-free opportunities overseas exist.

About 850 000 white citizens have left the country since 1995. Because of the historical
background of South Africa the white citizens are the most skilled. The impact of HIV and
Aids also has a negative impact on the skills and talent shortage. Stringent controls and
protracted delays in the immigration of skilled people are further factors contributing to the
shortage. The school education system is deteriorating at a rapid pace with high dropout
levels. The majority of school-leavers are not sufficiently qualified in vital fields like maths,
science and technology. The private sectors in South Africa are characterised by rapid
increases in payroll as organisations are paying more to attract and retain skills and talent
(South Africa skills shortage, 2007: 6).

People engaging in the world of work have also changed. The employees or prospective
employees have become more demanding of what they expect of organisations. They are
looking for reputable, high profile organisations with influential and credible leadership.
Work settings that are challenging, stimulating and meaningful are important.

The

organisations must offer ongoing learning and development opportunities that are built
around the needs they have relative to where they are in their career life cycles. They are
seeking work settings that will allow them to actualise their potential and apply their
knowledge, skills and experience in an innovative way. Employees have a desire for
optimal work-life integration because the boundaries between life and work have
disappeared because of virtual connectivity. They want to be judged on what they can
contribute and the results they produce, not on time. The answer; what is in it for me?
features more strongly as they put themselves in the centre of their self-constructed worlds

18

of work. Commitment to and identification by individuals to organisations occur on the


terms of the individual and periods of commitment to any given organisation have become
shorter. The challenge for organisations is how to engage the hearts and minds of the
employees who are inner directed, assertive, independent, mobile and meaning seeking
(Veldsman, 2008).

Remuneration shall always play an important role in making decisions regarding


employment possibilities. The focus on other softer issues is increasing. In a survey done
by Magnet Communications in 28 countries young professional people listed the following
three aspects as the most important when making a decision about a possible employer:

adaptable working hours;

competitive remuneration;

increasing responsibilities.

When asked what the single most important aspect is which would influence a decision the
answer was the employers reputation and well as management which instil trust (Finweek,
2007: 48).

It is thus clear that the traditional employment deal, which was a fair pay for a fair days
work, has been replaced. The new deal implies that employees expect to be continuously
developed and apply the skills the company needs in a challenging environment (Frank et
al., 2004: 17).

Research has shown that paying more to attract and retain talent is not sustainable. The
answer to address the talent shortage would not be addressed by the employer who pays
the highest salaries.

The answer lies in the organisations total employee value

proposition. The total rewards approach encompasses any aspect of employment that
attracts, retains and motivates. The shift is therefore from pay to total value proposition
(Richter, 2003: 17).

One of the biggest challenges today is for organisations to engage the heart and mind of
employees. The following sections would focus on the concept of employee engagement.

19

2.3

EMPLOYEE ENGAGEMENT

2.3.1

Introduction

We want to become a company where people come to work every day in a rush to try
something they woke up thinking about the night before. We want them to go home from
work wanting to talk about what they did that day, rather than trying to forget about it. We
want factories where the whistle blows and everyone wonders where the time went, and
someone suddenly wonders aloud why we need a whistle. We want a company where
people find a better way, every day, of doing things: and where by shaping their own work
experience, they make their lives better and your company best (McNamara, 1997: 19).

Imagine working for an organisation in which a fourth of the employees are totally turned
off by their jobs, half do the minimum to get by and only the remaining 25 per cent are
enthusiastic (Bates, 2004: 44).

The writer is of the opinion that the major difference between the first organisation
aspiration and the profile of the typical firm of the United States is the level of employee
engagement present. In this section, the concept is explored in determining the definition,
contributions, benefits and possible obstacles to increased employee engagement.

In the global knowledge and service orientated economy people are the most valuable and
powerful source of sustained competitive advantage. In an environment of continuing and
widespread skills shortages, increased diversity and changing social values and
expectations, people are also the most difficult asset to manage. They walk out of the
office door each evening, voluntarily engaged. The engagement of employees however
underpins business success (Charted institute of personnel and development, 2009a).

Lack of engagement is an epidemic, and causes large and small organisations all over the
world to incur excess costs, under perform on critical tasks, and create widespread
customer dissatisfaction.

Improving organisational performance requires a highly

engaged and happy workforce. Research on happiness in the workplace suggests that
worker well-being plays a major role in organisational performance and that there is a
strong relationship between worker happiness and workplace engagement (Rampersad,
2008: 11).

20

2.3.2

Definition of employee engagement

Saks (2006: 600) emphasises that most literature about employee engagement comes
from the practitioner and consulting firms.

According to him, the lack of academic

research about the concept is surprising. The result is that many different views and
definitions exist of employee engagement.

What do engaged employees look like?

Energised, committed and work hard to help the company succeed.

Use their energy, skills, experience and creativity to satisfy customers and deliver
results.

Say that they work for the firm because they want to.

See their role as following through to make sure that problems they identify get
solved.

Are action-oriented and know how to take intelligent risks.

Believe they have a stake in the company.

Exert extraordinary effort to do whatever it takes to make and keep the company
successful, while embracing the companys culture (Richman, 2006: 38).

For many, the concept started in 1994 when James Heskett and his colleagues at Harvard
Business School studied the Service-Profit Chain. The model explained the following
concept: Employee satisfaction drives employee retention, drives employee productivity,
drives service value, drives customer satisfaction, drives customer loyalty, drives
profitability and growth. Engaged employees create loyal customers which result in bigger
profits (Parsley,2005a).

The notion of engagement, like many psychological constructs, is simple to understand yet
more difficult to define.

One fairly descriptive definition of engagement is bringing

discretionary effort to work, in the form of extra time, brainpower and energy. Other
definitions of engagement include cognitive, affective, and behavioural components.
These include emotional aspects like how employees feel about their employer, its
leaders, working conditions, and behavioural components like the skills the employees

21

choose to bring to work as well as the tendency to give more than what is expected (Frank
et al., 2004: 15-16).

Employee engagement can be described as follow:

The extent to which employees exert discretionary effort.

Putting in extra time, brain power and energy.

The extent to which employees become passionate about their work and their
company (Christofferson, 2007: 51).

There are two kinds of employees: engaged and disengaged. Engaged employees are
those who are dedicated to the organisations vision and who are eager to contribute.
They are productive and live by the organisations values. Engaged employees challenge
those around them to do more and to do it better. Disengaged employees are those
employees who are not aware of the organisations vision and who spend most of their
time watching the clock. They simply show up for work prepared to do the minimum to get
by. They demoralise the productive employees with their lack of passion (Knowledge
Resources, 2008: 1).

Employee engagement is not just about having enthusiastic and happy workers. It refers
to a well-defined, research-based cluster of employee attitudes and behaviours that can be
measured and has been shown to make a difference to business results. It is more
influenced by management practices and features of the work environment than by
employee demographics or personality (Gentry, 2007: 47).

WorldatWork (2007: 12) defines different levels of intensity concerning motivation. The
levels of intensity are as follow:

Satisfaction: How much I like things here.

Commitment: How much I want to be here.

Engagement: How much I will actually do to improve business results.

The Conference Board published Employee Engagement, A Review of Current Research


and Its Implications in 2006. The report focused on 12 major studies, which were done

22

during the previous four years that focused on employee engagement. Each of the studies
used different definitions. The Conference Board analysed all the definitions and came up
with a blended definition and key themes that crossed all of the studies. They defined
employee engagement as: A heightened emotional connection that an employee feels for
his or her organisation, that influences him or her to exert greater discretionary effort to his
or her work (Management-issues, 2007).

Without a standard definition of engagement, we risk playing a game for evidence that
engagement efforts are delivering high return on investment.

When employee

engagement is studied closer, there is convergence around three essential components of


engagement:

logical commitment, emotional commitment and discretionary effort.

Engagement is therefore found in employees minds, hearts and hands.

Engaged

employees are expected to continue working for their employer, to feel proud and
motivated working for their employer, and to be willing to exert extra energy at work
(Mastrangelo, 2009: 14).

2.3.3

Drivers of employee engagement

2.3.3.1 Introduction
This section focuses on the necessary aspects to ensure employee engagement. General
aspects are discussed and specific drivers. The organisation must firstly determine the
importance of people in the organisation.

Organisations must revisit the strategic decision about the role people must play within the
organisations strategic intent, and hence in making and keeping the organisation
successful. The strategic people decision will influence the kind of people the organisation
wants to attract and retain, how the people of the organisation will be led and managed,
the profile of the leadership needed.

It will determine the level of investment the

organisations are willing to make in its people.

To be successful in the changed

environment, organisations must decide that people employed are seen as genuine
partners, taking shared responsibility for the longer-term success of the organisation. As
true value and wealth creators in the organisation, the employees share significantly in the
wealth created by themselves. People management under this choice focuses on high
levels of people engagement and commitment within a high performance work setting. It

23

is about employees willing to perform and being allowed to perform. Concurrent to the
strategic people decision, the organisation must debate and decide what psycho-social
contract it wants with its people.

To be successful in the changed environment, a

combination between a contract of partnership and identification is necessary. The parties


concerned base a partnership contract on taking co-responsibility for the success of the
organisation. Identification is a relationship based on meaning finding, meaningful and
meaning giving work (Veldsman, 2008).

Organisations must create a strategic people framework that supports its strategic people
intent. This will create the right framework for employee engagement. The framework
elements are discussed in Table 2.1.

Table 2.1: Elements of strategic people framework


Element

Explanation of element

High level profile of the ideal type of Organisations have clear expectation of
person the organisation wishes to employ
the people they want. A good match
would therefore unlock people talent.
The
organisations
proposition

People philosophy

People strategy

people

value The value proposition focuses on the


compelling reasons the ideal person would
join and stay with the organisation. It
focuses on the creation of the aspects that
is of value for the ideal person.
Gives expression to an organisations
basic beliefs regarding its people and how
the organisation and its people manage
the relationship between them.

The strategy enables the actualisation of


the strategic intent from a people
perspective.
Source: Veldsman, 2008

The correct formulation and implementation of the mentioned elements will create the
suitable landscape to assist in the creation of a engaged employees.

Armstrong and Murlis (2005: 4850) describe the psychological contract which exists in
the employment relationship. The term psychological contract refers to all aspects of the
employment relationship that are neither well-defined nor clearly understood.

These

24

relational aspects of employment are those that exert the greatest influence on the
motivation, commitment, job satisfaction and morale of employees. The psychological
contract can be defined as follows:

The set of expectations held by the individual

employee that specify what the individual and organisation expect to give and receive from
one another in the course of their working relationship.

The employment relationship aspects covered by the psychological contract for the
employee and employer are listed in Table 2.2. It is, however, dynamic and develops over
time.

Table 2.2: Employment relationship aspects of the psychological contract


Employees point of view

Employers point of view

How s/he is treated in terms of fairness, Competence


Effort

equity and consistency


Security of employment

Compliance

Scope to demonstrate competence

Commitment

Career expectations and the opportunity Loyalty


to develop skills
Involvement and influence
Trust in the organisation to keep its
promises
The

expectation

that

s/he

will

be

managed competently
Source: Armstrong and Murlis, 2005: 50

A balanced psychological contract is necessary for a continuing, harmonious relationship


between the employee and the organisation. If the psychological contract is violated, it
can signal to the parties that they no longer share a common set of values or goals. The
importance of the psychological contract was emphasised by Shein who suggested that
the extent to which people work effectively and are committed to the organisation depends
on:

25

The degree to which their own expectations of what the organisation will provide to
them and what they owe the organisation will provide to them and what they owe the
organisation in return matches what the organisations expectations are of what it will
give and get in return.

The nature of what is actually to be exchanged. Examples like money in exchange


for time at work; social need satisfaction and security in exchange for hard work and
loyalty and various other combination of things.

The biggest challenge for organisations is to determine the contents of the psychological
contract and to manage the expectations of employees. The expectations of both parties
are most of the times not articulated and therefore it is important to discuss expectations
(Armstrong & Murlis, 2005: 53).

Zingheim and Schuster (2000: 23 25) support the view of the psychological contract with
their concept of the better workforce deal.

It suggests that if the individual and the

company cannot both win from the employment relationship, they should not make an
employment deal. This prevents deals where one party is a winner and another a loser. It
also implies that when the company is not successful, stakeholders too should share in
this reality.

This is a major change for companies and their employees.

specifies some other characteristics of the better workforce deal.

Table 2.3

26

Table 2.3: Better workforce deal characteristics


Factor

Characteristic

Time

2000 and beyond

Business
environment

Invest in people, fewer people than jobs

Company plan

Profitable growth, speed

Culture

Company and workforce partnership, more celebration and fun

Peoples trust

Rebuilding

Information sharing

More open communications; extensive, ongoing information on


company results and what people need to do to grow and add
value

Base pay

Integration of market, skills and competencies, and consistent


performance over time

Variable pay

Even more, reward performance, cash variable pay typically,


funded as add-on with achievable goals, deep and extensive
use of stock options

Benefits

Stock purchase plans, work/life balance benefits

Employment

Choice by both parties

Development

Ongoing coaching and developmental feedback, more training


and nurturing

Responsibility for
career

Company and individual come halfway


Source: Zingheim and Schuster, 2000: 24

The better workforce deal is a healthy balance to build on.

People add value, and

companies make it attractive for them to remain, grow and share in the success. The
better workforce deal balances even better the equation between the company and the
workforce. Talented individuals will not take on all the sacrifices involved in making the
company a success unless the firm is willing to share in the future. Thus, the better
workforce deal is necessary whenever the company needs to invest in the people required
for success (Zingheim & Schuster, 2000: 25).

The following section focuses on factors that influence the drivers of employee
engagement.

27

2.3.3.2 Influences on employee engagement drivers


It is, however, important to take note of the fact that all employees want different things at
different stages of their lives. All place different values on what the work and employer
provides. At certain times, employees would concentrate on the luxury of job interest and
personal development, while at other times, security and paying the mortgage are
paramount (Chartered Institute of Personnel and Development, 2009a).

Alignment of the personal ambition with the shared organisational ambition is central for
the purpose of employee engagement. People do not work with devotion and do not
spend energy on something they do not believe in or agree with. Clarity and uniformity of
personal and organisational values and principles are therefore essential for the active
involvement of people. People all have different personal values and principles that we
must try to understand and link to the values of the organisation.

Organisational

development and improvements will only be of a permanent nature by doing this


(Rampersad, 2008: 20).

Taking a holistic view of the business and its impact on employee engagement is very
often the most appropriate way to manage the key elements that need to be actively
managed by organisations in order to enhance retention, motivation and attendance. The
thinking of skills retention and employee motivation is best managed by spending money
to mitigate the problem is not sustainable. Employee retention and motivation can be
achieved

more

elegantly

and

effectively

by

focusing

on

broader

set

of

retention/motivation elements (Glen, 2006: 38).

It is important to note that a one-size fits all approach to employee engagement would not
be the most effective. Managers should find out what benefits and resources are most
desired by employees and most likely to create a sense of obligation that is returned with
greater levels of engagement.

Employee engagement is a long-term and on-going

process that requires continued interactions to ensure that the benefits and resources
create the necessary value for both the employer and employee (Saks, 2006: 214).

Organisations need to segment the workforce by functions and individuals. Customised


rewards programmes need to be designed for each of these segments (Frank et al.,

28

2004: 19). This would ensure that the benefits and resources address the expectations of
the employees.

Erikson and Gratton (2007: 104111) discuss the importance of recruiting the right people
which can dramatically improve employee engagement and performance. They compare
the organisations ability to segment its customer market and the product or service offer to
them to the organisations inability to segment the people who will be productive in the
organisation. With the necessary research they concluded that different organisations
offer different employment experiences and rewards but engagement does not always
differ accordingly. An example would be an organisation that pays higher than market rate
but their engagement level is lower than that of an organisation paying lower than market
rate. The answer is that organisations with higher engagement levels excel at expressing
what makes them unique. They know what they are, and it is not all things to all people.
They understand their current and future employees. These organisations hire people
who easily and enthusiastically fit in, and thereby cultivate a more committed workforce.
According to them the following elements are critical to create and sustain engagement:

A comprehensive understanding of the types of people who will be productive in the


organisation over the long term. What kinds of skills should they have? What should
be their attitudes toward work?

A well-defined, well-communicated signature experience that conveys for potential


hires, and reinforces for employees, the attributes and values of the organisation.

A coherent employee experience.

They mention that organisations, which target potential employees as methodically as they
do potential customers, can gain a sustainable market advantage.

The Conference Board established that employee age also influences the importance of
different rewards.

According to the research employees under the age of 44 ranked

challenging environment/career growth opportunities much higher than do older


employees. Older employees ranked recognition and reward for their contributions much
higher than the people 44 and younger (Management-issues, 2007).

29

Two different studies were done which focused on segmenting the employees. Tamara
Erikson, Ken Dychtwald and Bob Morison did the first study. They suggest that work plays
six general roles, which correspond to six types of employees, based on psycho
demographic characteristics. The six different employee types are shown in Table 2.4.
Each worker segment cares deeply about several aspects of the employer relationship and
little about the others.

Table 2.4: Employee types and what appeals and engages


Employee type
Expressive
legacy

Secure progress

Individual
expertise and

The role of work

What appeals and engages

Work is about
creating something
with lasting value

Work is about
improving ones lot in
life and finding a
predictable path.

Work is about being


valuable part of a
winning team

team success

Risk and reward

Flexible support

Low obligation
and easy income

Work is one of
multiple opportunities
to live a life filled with
change and
excitement.

Work is a source of
livelihood but not yet
(or not currently) a
priority

Work is a source of
immediate economic
gain.

Autonomy
Entrepreneurial opportunities
Creative opportunities
Stimulating tasks that enable continual learning
and growth
Fair, predictable rewards
Concrete compensation, solid benefits and
retirement package
Stability
Structure and routine
Career training
Collaboration
Fun
Stability and structure
Opportunity to choose tasks and positions from
a long menu of options
Open-ended tasks and approaches to getting
work done
Opportunity to improve personal finances
Flexibility
Opportunity to choose tasks and positions from
a long menu of options
Open-ended tasks and approaches to getting
work done
Flexibility
Well-defined vacation and family benefits
Well-defined work routines the ability to plug in
and out of tasks and assignments with ease
Virtual asynchronous tasks and assignments
Fun
Jobs that are relatively easy to come by
Well-defined work routines
Lucrative compensation and benefits packages
Stability and security
Recognition

Source: Erickson and Gratton, 2007: 108109

30

The section thus far has focused on the definition of employee engagement which is the
people focus needed by organisations to ensure increase in employee engagement. It has
been a brief discussion to show that what drives employee engagement for different
people would differ. The following section focuses on engagement drivers as identified by
different academic literature.

2.3.3.3 Employee engagement drivers


Richman (2006:

38) discusses the commitment pyramid that shows the hierarchy of

factors that are the building blocks of employee engagement. The pyramid can be seen
as Figure 2.1. The bottom of the pyramid is made up of threshold factors. These factors
have to be in place in order for an organisation to be able to compete for human capital.
The second level contains the enablers.

The aspects in this level begin to set the

business apart from the competitors and enable employees to align their activities toward
the organisation objectives. The aspects in this level are very important but it is the
aspects in the third level, which are the real commitment drivers. These factors encourage
the full engagement of employees. If organisations wants a real competitive advantage
from its workforce by attracting and keeping the best employees, these factors need to be
addressed.

Figure 2.1: Commitment pyramid


Source: Richman, 2006: 38

31

The HDA employee engagement matrix, as shown in Figure 2.2, was developed by
Clayton Glen.

The engagement matrix focuses on nine predictors of employee

engagement. Each of these predictors has ideal states that are shown in the matrix. It is
thus possible to use this matrix to identify gaps on each predictor and to determine the
necessary actions to address these gaps. One of the biggest benefits of using a matrix is
the holistic approach of the matrix. It is however important to note that the combination of
these predictors would differ between different departments in one organisation and
between different organisations (Glen, 2006: 3940).

Figure 2.2: HDA employee engagement matrix


Source: Glen, 2006: 39

32

Veldsman(2008:) explains the people value proposition as shown in Figure 2.3.

Figure 2.3: People value proposition


Source: Veldsman, 2008

The framework deals with the compelling reasons why employees must join and stay with
the organisation. The people value proposition gives concrete expression to the strategic
people choice made by the organisation, and aims to maximise the employees
engagement in the organisation. Engaging their hearts, minds and spirits. Figure 2.3
shows the characteristic elements organisations can use to construct their people value
proposition. The elements in the white blocks are relevant to the reasons why people
typically join organisations and the elements in the grey blocks to why they stay with
organisations. Elements on the same continuum depict opposing but related reasons why
people join and stay (Veldsman, 2008).

In research that was done by Saks (2006: 613), it was identified that employees who
perceive higher levels of organisational support are more likely to reciprocate with greater
levels of engagement in their job and in the organisation. Employees who are provided
with jobs that are high on the job characteristics are more likely to reciprocate with greater

33

job engagement. Employees who have higher perceptions of procedural justice are more
likely to reciprocate with greater organisation engagement. Engaged employees are also
more likely to have a high-quality relationship with their employer leading them to also
have more positive attitudes, intentions and behaviours.

The influence of psychological meaningfulness, psychological safety and psychological


availability were determined by a study done by May, Gilson and Harter (2004: 1426).
The study determined that all three psychological conditions exhibited significant positive
relations with engagement.

Meaningfulness displayed the strongest relation.

Job

enrichment and work role fit were positively linked to meaningfulness. Rewarding coworker and supportive supervisor relations were positively associated with safety.
Availability was positively related to resources availability.

The description of each of

these elements is explained in Table 2.5.

Table 2.5: Positive related psychological elements of engagement


Engagement
Psychological

Meaningfulness

Safety

Availability

The value of a work goal or purpose,


judged in relation to an individuals own
ideals or standards

Feeling able to show and


employ one self without
fear of negative
consequences

Individuals
belief that s/he
has the
physical and
emotional
resources to
engage the self
at work
Resources

condition
Description

Potential
determinants
Description

Job
enrichment

Work role
fit

Refers to
the
characteristics of the
job

The extent
to which an
employees
work role is
aligned with
individual
self
concepts

Coworker
relations
Refers to
the level
of positive
rewarding
interpersonal
interactions
with coworkers

Co-worker
relations

Supervisor
relations

Refers to
the level of
positive
rewarding
interpersonal
interactions
with coworkers

A supportive
should foster
perceptions
of safety and
enhance
employee
creativity

Source: May, Gilson and Harter, 2004: 1419

Refers to the
individuals
ability to meet
the physical
and emotional
demands of the
job

34

Royal and Masson (2009 :14) list the following enablers of employee engagement in their
employee effectiveness model.

Clear and promising direction

Confidence in leaders

Quality and customer focus

Respect and recognition

Development opportunities

Pay and benefits.

The assumption can be made, according to previous literature, that the enablers must be
at the level that an employee feels that the psychological contract is not violated.

The study of the conference board published the drivers, as discussed in Table 2.6, after it
had analysed 12 different studies on employee engagement. Four of the studies agreed
on the eight employee engagement drivers.

Table 2.6: The Conference Board employee engagement drivers


Engagement driver

Explanation

Trust and integrity

How well managers communicate and walk


the talk
Nature of the job
Is it mentally stimulating day-to-day?
Line of sight between employee performance Does the employee understand how their work
and company performance
contributes to the companys performance?
Career growth opportunities
Are there future opportunities for growth?
Pride about the company
How much self-esteem does the employee
feel by being associated with their company?
Coworkers/team members
Significantly
influence
ones
level
of
engagement
Employee development
Is the company making an effort to develop
the employees skills?
Relationship with ones manager
Does the employee value his or her
relationship with their company?

Source: Management Issues, 2007

Towers Perrin, a consulting firm based in New York, identified the following workplace
attributes most critical to build high employee engagement:

35

Senior managements interest in employees well-being.

Challenging work.

Decision-making authority.

Evidence that the company is focused on customers.

Career advancement opportunities.

The companys reputation as a good employer.

A collaborative work environment where people function well in teams.

Resources to get the job done.

Input on decision making.

A clear vision from senior management about success (Bates, 2004: 48).

Chowdhury (2004: 844845) talks about the creation of a symbiotic relationship between
the organisation and talented employees. A proper symbiotic relationship would ensure
talented employees to give their physical, mental and even spiritual support. To create a
symbiotic relationship, the following actions must be applied:

Recognise and reward talents properly.

Offer profit-sharing plans or stock options that create a sense of ownership.

Measure both team and individual performance.

Evaluate the performance.

Develop a performance-based, semi variable compensation package.

Define responsibility, authority and accountability for each project.

Eliminate people who are not performing.

The report entitled The drivers of employee engagement by the independent Institute for
Employment Studies identified the following actions needed from employers to get the
workforce engaged:

Demonstrate that they value their employees, by investing in their training and
continuing development, and by taking seriously employee appraisal and personal
development plans.

Communicate to employees a strong business context and awareness, and enable


them to implement their ideas to make the organisation better.

36

Encourage a continuing and open dialogue between employees and the


organisation, to maintain positive feelings of involvement.

Realise that as length of service increases, it is harder to maintain engagement.


Factors such as career frustration, boredom, and cynicism can be overcome by
offering new development opportunities and challenges.

Understand that professional workers are more likely to engage with their craft rather
than with the organisation, they work for.

These workers are valuable assets,

however, so it is worth making the extra effort to engage and retain them.

Provide equality of opportunity to all employees.

Monitor levels of employee engagement overall and for different employee groups
within the organisation.

Low levels can result in increased staff absence, reduced customer satisfaction and
lower intention to stay with the organisation, all of which will impact on the customer
and therefore on the bottom line.

Have clear and accessible HR policies and practices and a commitment to employee
health, safety and well-being (Are your employees engaged or just committed?
2004: 6).

Finding, keeping and engaging best employees will always be an issue for employers,
particularly in times of economic growth. It would seem however that showing employees
they are valued by affording them a real voice in the decision-making processes of a
company is the best starting point in motivation and retention of staff. Young employees
also need to feel valued and must be provided with a clear route to success (Human
resource management international digest, 2008: 30). A key finding by the research done
by the independent Institute for Employment Studies as that engagement is mainly driven
by the extent to which employees feel they are valued by, and involved with their
organisations (Are your employees engaged or just committed?, 2004: 6). Bates (2004:
46) confirms this view by arguing that employee engagement has little to do with how
much an employee is paid. The engagement challenge has a lot to do with how an
employee feels about the work experience, about how he or she is treated. It has a lot to
do with emotions. In order to improve employee engagement, managers should not rely
on extrinsic forms of motivation entirely. The strive towards long-term engagement must
come from a sense of meaning and purpose of work itself (Morrison et al., 2007: 112). A

37

major study by Watson Wyatt correlated effective organisational communication to


financial performance.
engagement.

It identified communication to be a major driver of employee

Effective communications create engaged employees create loyal

customers who in turn create bigger profits. They furthermore found that organisations
that communicate effectively were more likely to report turnover rates lower than those of
their industry peers (Parsley, 2005).

Swindall (2008: 1) focuses on the important role of leadership and managers in the
creation of a culture of engagement. According to him, the answer to creating engaged
employees is engaged leadership. Leaders must build a culture to overcome employee
disengagement.

In order to inspire and engage employees leaders must master the

following three primary areas of leadership. Directional leadership that is the ability to
build consensus for the vision. Motivational leadership inspires the employees to pursue
the vision. Organisational leadership develops the team to realise the vision. To turn
disaffected employees to engaged employees, the leaders of the organisation need to
excel in each area of leadership.

The role of the front-line leader in engagement has been well recognised. Employees
typically see the organisation as they see their supervisor. It is therefore important to
assist front-line leaders and supervisors in the necessary capabilities to drive employee
engagement. Capabilities such as building trust need to be trained to the leaders and
supervisors (Frank et al., 2004: 2021).

Nortje (2009) provides a framework for what different levels of leaders could contribute
towards employee engagement. She argues that no one affects the state of engagement
more than an employees immediate leader or supervisor.

The leaders engagement

drives the engagement of the employee. The role of each management level according to
her:

Senior leaders set the tone of engagement by doing the following:


o

Communicate a clear vision of the future.

Build trust in the organisation.

Involve employees in decision making that will affect them.

38

Respond to feedback.

Demonstrate commitment to the organisations values.

Demonstrate genuine commitment to the well-being and development of


employees and make the necessary tools and resources available.

The role of middle management to help employees become and stay engaged they
need to do the following:

Align effort with strategy.

Empower team members.

Promote and encourage teamwork and collaboration.

Help people growth and develop.

Provide support and recognition where appropriate.

The role of all leaders the 2 Ms:


o

Mission To envision a clear future and transmit this vision compellingly to


employees, inspiring them to want to contribute to making this vision a reality;

Model To role model the attitudes and behaviour expected of employees with
vigour, dedication, integrity, respect and collaboration.

It is clear that the role of leaders and supervisors is critical when an organisation needs to
increase the level of employee engagement.

2.3.3.4 Summary
In this section, regarding the drivers of employee engagement, the discussion started with
the importance of the organisation to decide that their employees are a strategic valueadding asset that must be managed in such a way. If organisations are successful in
ensuring their practices and values to ensure employees are engaged, it would ensure that
employees would exert extra energy with their mind, heart and hands. Both parties must
ensure that the expectations of the other party are met in a win-win relationship. It is
important to realise that a one size fits all strategy does not work to ensure employee
engagement from all employees. The reason for this is that different individual employees
value different aspects. Age and income level for example would have an impact on the
specific aspects that would be of value to the employee. It is important for the organisation
to have a holistic perspective regarding the application of its benefits. It must ensure it has
sufficient knowledge about each individual employees engagement drivers. A specific

39

thought school emphasises the importance of segmenting the workforce. This can be
used to attract the right potential employees to ensure they fit in the culture of the
organisation. Many specific engagement drivers as identified by academic literature were
listed with two of the most important ones by the employees perception of their value for
the organisation and the relationship with the immediate superior.

2.3.4

Benefits of higher levels of employee engagement

The benefits of higher levels of employee engagement are financially as well as other nonfinancial benefits. This will briefly be discussed under this section.

Although it was difficult to determine the financial effect of employee engagement, it


became possible because of end-to-end service-profit chain data.

Sirota Consulting

studied 28 multinational companies through 2004 and found that the share prices of
organisations with highly engaged employees rose by an average of 16 per cent compared
with an industry average six per cent. A study published by ISR published in August 2005
showed that companies with low-level of employee engagement saw net profit fall by 1.38
per cent and operating margin fall by 2.01 per cent over a 36-month period. In companies
with above average levels of employee engagement profits rose by 2.06 per cent and
operating margin rose by 3.74 over a 36 months period (Parsley, 2005a).

A framework, Figure 2.4, developed by Towers Perrin shows the strength of the direct and
indirect relationships among company programmes, employee behaviour, customer focus
and financial results.

40

Figure 2.4: Linking employee engagement to financial performance


Source: Towers Perrin, 2003: 18

Hewitt Associates database of more than four million employees from almost 1500
organisations compared engagement scores with actual organisational performance.
They discovered a strong positive relationship exists between higher levels of employee
engagement and organisational performance. Organisations with an engagement score of
60 per cent or higher produce on average five-year total shareholder return of greater than
25 per cent. In contrast, companies in which engagement lays between 40 and 60 per
cent reported a mere nine per cent on average. Organisations with engagement scores
below 40 showed a decline in average total shareholder return of 3.4 per cent. Similar
results have been shown for the strong positive relationship between employee
engagement and return on assets, market-to-book ratio, customer retention and operating
performance. Strong relationship to other people-related measures, such as retention and
absenteeism, which relate directly to productivity were also identified (Baumruk, 2004:
49). Higher engagement levels lead to a reduction in employee turnover. Frank, Finnegan
and Taylor (2004: 15) argue that the cost of turnover is significant and far-reaching. The
cost of employee turnover for the United States of America is estimated to be about five
trillion dollars per year. Higher turnover results in a reduction of earnings and stock price

41

of 38 per cent. Retention not only reduces turnover cost and increases productivity, it also
correlates with high customer loyalty and greater profitability.

Richman (2006: 3638) refers to studies that made it clear that high employee
engagement translates into increased discretionary effort, higher productivity and lower
turnover at the employee level, as well as increased customer satisfaction and loyalty,
profitability and shareholder value for the organisation. The Great Place to Work Institute
found that stocks of the public companies on Fortunes 100 Best Companies to Work for
list produced more than three times the gains of the broad market between 1998 and
2004. A Watson-Wyatt study found three-year total shareholder return to be three times
higher for high-commitment firms compared to low-commitment firms.

Gallup studies

estimate that highly engaged employees account for 90 per cent of a companys
productivity.

Employers also need to be concerned about the cost of disengaged

employees. Employees who are actively disengaged tend to be less productive, less loyal
to their companies, more stressed, and absent more and less satisfied with their personal
lives.

Engaged employees could be categorised by behaviour that is beneficial to the


organisation.

Say They are passionate advocates for the workplace, consistently speaking
positively about the company to co-workers, potential employees and customers.

Stay These employees have an intense desire to be a member of the organisation,


despite opportunities to work elsewhere.

Strive They routinely go beyond expectation, exerting extra effort to produce


extraordinary service and results for customers and colleagues (Baumruk, 2004: 49).

The importance of ensuring employee engagement is realised when studying the benefits
of higher level of employee engagement. The benefits are financially but also behavioural.
Employee engagement is not a business fad, nor something organisations can ignore.

42

2.3.5

Obstacles to employee engagement

Employees trust in the organisations and the economy has been on the decline. Without
knowing when the ax is going to fall again, seeing co-workers being laid off has had a
profound impact on trust and consequently engagement. Accompanying layoffs has been
outsourcing and particularly off shoring. This has had a significant impact on the feeling of
trust and security of employees (Frank et al., 2004: 17).

Companies are relying on their workforce to achieve their strategic objectives. In a new
survey, it was found that only one in seven employees worldwide is fully engaged with
their job and willing to go the extra mile for their companies. The study by Towers Perrin
found that many people are keen to contribute more at work, but the behaviour of their
managers and culture of their organisations is actively discouraging them from doing so
(Management-issues, 2005).

A major obstacle in employee engagement is senior management of organisations that


hand down a series of instructions without any regard for the poor recipient.

Many

supervisors feel obliged to pass these instructions on to their staff without thoroughly
accepting them, or perhaps even thoroughly understanding them (Rampersad, 2008: 23).
Communication from managers to their employees is a major obstacle to employee
engagement. Managers do not see communication as part of their day job and have not
yet developed their communication skills (Parsley, 2005).

This section briefly focused on obstacles that exist for ensuring employee engagement.
The current economic conditions have a negative impact with the other negative impact
being the capabilities of managers to ensure the appropriate culture and management
style to ensure employee engagement.

2.4

SUMMARY

The demographic changes in the world of work have resulted in a talent pool dip.
Employees started looking for more than pay and benefits from the employment
relationship.

The potential employees who are joining the labour market are more

challenging about expectations from the employer. Aspects like career development and
flexible working hours are examples of expectations expected from the employer.

43

Organisations have started to move to total rewards to address the expectations from
employees and thereby retaining employees and attracting potential employees.

Employee engagement was defined by focusing on the different definitions available in


academic literature.

Three important aspects, namely logical commitment, emotional

commitment and discretionary effort, characterise it. It is about the heart, mind and hands
of employees. The influences on the drivers of employee engagement were discussed
with one of the most important being the organisations decision regarding the role of
people in striving towards its strategic intent. Employee engagement models and other
specific drivers were discussed as published by varies academic journals and books. A
brief discussion about the financial and behavioural benefits of employee engagement was
listed.

The last section focused on the obstacles that exist to achieving employee

engagement.

44

CHAPTER THREE
TOTAL REWARDS

3.1

INTRODUCTION

The psychological contract between employers and employees requires trust on both
sides.

The provision of total reward schemes demonstrates that the employer takes into

consideration the needs of individual employees and is prepared to be flexible in meeting


those needs (Charted institute of personnel and development, 2009a). The level of trust
experienced by the employee increases because the employee feels valued by the
employer because specific needs are addressed. It is however ironic how little
organisations know about the reward needs and wants of the employees. If employees
can be categorised as internal clients the information available about external clients far
exceed the amount available about internal clients (Haygroup, 2009: 2). The importance
of gathering data about the specific needs and wants of employees is emphasised by the
changing demographics of the workforce. The different generations needs and wants
vary. The one-size-fits-all approach to remuneration is outdated. Mass customising will
become the norm. Companies are increasingly customising remuneration strategies and
designing tailor-made employment contracts to suit employees specific needs (New
employee retention challenges, 2007: 46). Pay alone is not the only need of employees.
It is only one factor. Therefore, pay alone would not be sufficient to attract and retain
people. A total package or reward concept is needed to address the needs and wants of
employees. Flexibility in the total reward offering is also very important to ensure tailormade solutions for each individual employee (Hwang, 2004: 13).

In a study done by Deloitte in 2008, the five most significant challenges in respect of total
rewards have varied from the 2004 survey. The hierarchy of challenges from the first to
the fifth was as follow:

Shortage, motivation, and retention of qualified talent

Rising cost of total rewards

Managing reward risks (Regulatory requirements)

Changing workforce demographics

45

Requirements and complexity associated with global workforce and rewards


programmes.

It is interesting to note that the shortage, motivation and retention of qualified talent
overtook the longstanding number one challenge of rising cost of total rewards. This
emphasises the thinking of reward specialist to utilise the reward offering to ensure the
qualified talent needed to ensure success for the organisation is attracted and retained
(Deloitte, 2008: 3). This result is also confirmed by a study done by the HayGroup where
the aim was to determine how organisations are changing their human resource priorities
and programmes in the current economic downturn. The biggest challenges from the most
important were:

Retaining top talent and critical skills.

Maintaining and affording competitive pay.

Maintaining employee engagement and motivation.

Career development and training.

Recruiting top talent and critical skills (Royal & Mason, 2009: 9).

Both studies agree that ensuring the necessary talent to be available to the organisation is
the biggest challenge. In the past, organisations used tactics like restraint of trades to
ensure talented people would not leave the organisations.

To ensure employee

engagement it is much more effective to design total reward packages that would make
employees want to stay and not force them to stay (Asinof, 2006: S6).

Employee engagement means striking a bargain with employees. Organisations create


the conditions that make work meaningful and rewarding for employees. And employees,
in return, put extra effort into their work and into delivering superior performance. The
reward programme is the obvious human capital management reinforcement mechanism
and is core to reinforcing employee engagement levels (Haygroup, 2009: 2).

In this chapter the history of the development of total rewards will briefly be discussed.
The different total reward models that exist will be explained. The last section of this
chapter will focus on the advantages of total rewards.

46

3.2

CONTEXT AND PRINCIPLES OF REWARD

Employees cannot be motivated or engaged by merely increasing their salaries, awarding


them bonuses or praising their efforts. Criticising, threatening or penalising them will not
increase the employees motivational levels. A carrot and stick method does not motivate
people.

Motivation refers to the interaction between forces within the individual and

environment that arouse and direct persistent behaviour. If motivation is applied to the
work situation, it refers to the willingness of individuals and teams to exert high levels of
effort to attain organisational goals, conditioned by the efforts capability to satisfy
individual and team needs. It is however important to consider the following:

An organisation cannot motivate or engage employees directly. An organisation or


manager could create a working climate or environment, in which elements could be
incorporated which encourage people to be more motivated and engaged.

Any persons level of motivation and engagement is determined by the interaction


between a combination of forces within the individual and a combination of forces in
the environment in which the person live and work. Forces within the individual
include needs, expectations, ideals, visions, knowledge, experience and selfconcept.

Forces in the environment include supervisory style, the organisations

climate and culture, team spirit, co-operation and the organisations reward and
recognition system.

Employees differ not only in respect of their needs, expectations and other internal
forces but also about their reaction to influences emanating from the environment
(Coetsee, 2002: 17-18).

When an organisation has a total reward offering to employees which is excellent, it does
not translate into automatic employee motivation and engagement.

The interaction

between the employees internal forces and the environmental forces, which include
rewards, is the important factor.

A direct link exists between total rewards and Maslows hierarchy of needs. Figure 3.1
illustrates how total rewards link to Maslows hierarchy. It is thus clear that rewards can be
used to satisfy every human need on Maslows hierarchy.

47

Figure 3.1: The link between total rewards and Maslows hierarchy of needs
Source: WorldatWork, 2007: 15

Zinger and Schuster (2000: 4) found the following reward principles to be very useful in
creating the best return for organisations on reward expenditures.

When rewards need to be changed, a positive and natural reward experience


must be created.

Leaders need to communicate and educate people on the

reasons for changing rewards and the advantages to the workforce and company.
People need to be involved in the change process to gain their understanding,
acceptance and commitment.

Align rewards with business goals to create a win-win partnership.

The

relationship between the individual and organisation needs to benefit both.


People who contribute to the success of the organisation must share in the success.
To ensure a balanced win-win partnership, the organisation needs to provide clear
direction, people must continue to add value, and the company must acknowledge
their value with rewards.

Extend peoples line of sight. People need to be involved in extending their line of
sight to how they influence the results of their team, group, business unit and

48

company. Engage people in understanding how what they do affects the customer
and how they can adapt to evolving customer needs.

Integrate rewards. Use each reward tool for what it does best. Take an overall
perspective of not only total pay but also total rewards when determining rewards for
people. Create a customised better workforce deal from total rewards.

Reward individual ongoing value with base pay. Base pay is used to reward the
following three individual values:

The skills and competencies needed by the company and used by the individual
to generate results.

The individuals consistent performance over time whether individual


contributions or contributions to team results.

The individuals value relative to the labour market.

Reward results with variable pay. The company needs results to meet shareholder
expectations and provide a compelling future.

By rewarding the workforce for

achieving results, variable pay (cash and equity) creates stakeholdership and a winwin relationship between people and the company. Variable pay is best suited to
reward results because it is agile, flexible, adaptable, responsive, and able to focus
on key measures of success.

The objective of the principles is to help make people the critical component of company
performance. It is important to determine how to get more value from the reward process.
Its critical to continue to do this and remain flexible and adaptable. The rewards tools may
change, but the principles remain constant.

3.3

DEVELOPMENT OF THE TOTAL REWARD CONCEPT

In the mid- 1950s and 1960s, compensation systems were created because people felt
pay practices were out of control.

The lets make a deal pattern of determining

compensation had become destructive to the sense of internal control and harmony many
executives thought. Systems like National Metal Trades, AAIM and The Hay System were
created as a way of rationalising why some people would earn more money than others
would (Wilson, 1995: 7).

49

Compensation programmes focused on the job as the primary unit of value.

Job

descriptions became a common element in pay programmes. They became a process for
controlling the allocation of compensation dollars and defining status and power in the
organisation.

The focus of employees work was on satisfying the needs of the

supervisor. The use of reward elements like incentive plans was reserved for the top
executives. Compensation systems became a reflection of the organisations hierarchy
and a way of reinforcing it. Hierarchical organisations were very appropriate at a time
when people were rather unskilled and the focus of work was on simple production. Pay
systems reflected these principles, were a reflection of the times, and accepted as the
natural order of things in the workplace (Wilson, 1995: 8).

The hierarchical design and compensation worked well for many years.

The change

although not immediate or extensive led to a growing sense that traditional patterns of
management, organisation, and rewards were no longer working. Organisations began to
experience a conflict between the old emphasis on stability, efficiency, and control, and the
new pressure for speed, simplicity, flexibility, quality and cost. The root causes for the
pressures were many and diverse. It was however certain that the practices that had led
to success in the past would no longer provide the formula for success in the future
(Wilson, 1995: 9).

The new requirements for success reveal common threads of collaboration and
responsiveness in serving the needs of the customer. People in the organisation will need
to start doing some things, stop doing others, and change some of their practices. This
involves collaboration between the customer and provider, manager and employee, staff
and line management, engineering and hourly workers, executives and clerical workers,
sales and engineering staff, marketing and manufacturing employees all across the
organisation. The challenge is to create the conditions in which people would want to
focus on the customer, want to collaborate, want to perform only value-added activities,
want to increase the speed, responsiveness, and innovations needed by the customers.
An executive can in essence direct people to collaborate but unless it becomes inherently
satisfying, workers will only do it as long as the threat remains. When people take the
actions needed by the organisation to be successful, when they are valued for doing so,
they are contributing to a truly win-win environment (Wilson, 1995: 16).

50

Organisational change experts agree that unless reward systems are changed, people will
return to their traditional habits. A reward system is any process within an organisation
that encourages, reinforces, or compensates people for taking a particular set of actions.
Organisations need to create conditions that inspire and reward people for their
achievements in ways that utilise their talents forcefully and creatively. We need to help
them contribute to building organisations that are more competitive because they
themselves feel valued and share in the success. (Wilson, 1995: 16).

Organisations started to realise in the 1980s that strategically designed compensation


benefits programmes could give them the edge in a rapidly changing environment. Simple
compensation and benefits programmes of the past changed in consideration of the
strategic impact and relationship to one another.

Organisations were challenged to

contain costs and contribute to improved business results. They were at the forefront of
designing and implementing programmatic changes that have shaped the next generation
of compensation benefits.

This resulted in an improved alignment of pay and

performance, tighter control of benefits costs, and more relevant and valued employee
rewards programmes (WorldatWork, 2007b).

The concept of total rewards emerged in the 1990s as a new way of thinking about the
deployment of compensation and benefits, combined with the other tangibles and
intangibles that companies need to attract, motivate and retain employees. All the total
reward models recognise the importance of leveraging multiple programmes, practices
and cultural dynamics to satisfy and engage the best employees who contribute to
improved business performance (WoldatWork, 2008).

Richter (2003: 17) argues that the concept of total rewards has been around for some
time but it is only lately that it is being suitably addressed. Most organisations tried to
address the concept of total rewards by capturing all the elements of compensation and
benefits. This is however nothing different from total cost of employment. The question,
which must be asked, is not how much does an employee cost the company, but rather
what attracts, retains, and motivates employees. Any aspect of employment that attracts,
retains, and motivates is part of the total rewards package.

51

There are several reasons why more companies are moving toward a total reward
philosophy. The most important reasons are:

Erosion of the core elements of the package. The traditional elements of rewards,
pay, benefits, and stock options, are no longer differentiating factors for
organisations. The logical response from organisations is to broaden the overall
employment package.

Pressure for operational efficiency and effectiveness. Total rewards can represent a
major cost element. By redefining rewards more broadly and focusing on those
elements that achieve the biggest payoff, organisations can drive toward efficiency.

Catering to diverse needs. Companies are managing a much more heterogeneous


population. Employees have choices to make and a need for greater flexibility. Total
rewards help employers to show how their slate of rewards responds to the broad
needs of todays global workforce.

Need to more strongly reinforce business strategy.

A properly structured total

rewards package sends a key message. By aligning all the components of total
rewards with the overall business vision, a company ensures its workforce is
supporting the vision.

Given these reasons, companies still have to decide what they want to include in the broad
definition of total rewards (WorldatWork, 2007: 3).

Total reward is an important dimension that forms part of the exchange relationship
between the employee and employer.

Successful companies realise that productive

employees create value for their organisations in return for tangible and intangible value
that enrich their lives. The employee provides time, talent, effort and results in exchange
for total rewards valued by the employee (WorldatWork, 2007b).

Cash and benefits is a weak tactic in the overall rewards strategy. It is very easy to
duplicate or for another employer to improve on. Intrinsic rewards are far more difficult to
emulate. Total rewards can help to create a work experience that meets the needs of

52

employees and encourages them to contribute extra effort by developing a deal that
addresses a broad range of issues (Armstrong & Murlis, 2004: 12).

As companies come to believe that they must grow to survive, this is impossible with a
workforce that is so downtrodden that it cannot support growth. People work for more than
pay. Best performing companies are seldom the highest payers, but rather earning the
commitment and trust of the workforce. They offer their workforce a better deal. The
organisation invests in the people, and people meet it by learning new skills and
competencies and performing to reach organisational goals (Zingheim & Schuster, 2001:
35).

It is important for managers to find out what resources and benefits are most desired by
employees. This would ensure that the total reward offering the organisation creates for
each employee would result in the highest level of engagement. The total reward offering
for each employee would therefore be different addressing the specific aspects valuable to
the specific employee (Saks, 2006: 614).

This section focused on the movement from pay and benefits to total rewards.

The

following section will focus on the explanation of total rewards and look at different
definitions of the concept.

3.4

DESCRIBING TOTAL REWARDS

The definition of total rewards is normally an aspect for debate. There are normally two
prevailing camps. The one camp supports the narrow definition view while the other camp
supports the broad definition.

Narrow definition: These virtually always comprise compensation and benefits, and
sometimes include other tangible elements, for example development.

This

sometimes is referred to as total compensation or total remuneration.

Broad definitions: These can expand to encompass everything that is rewarding


about working for a particular employer or everything employees get as a result of
their employment. Sometimes terms such as value proposition or total value are
used interchangeably with total rewards (WorldatWork, 2007: 2).

53

The focus of the definitions in this section is on the broader definition.

Kaplan (2007: 16) defines total rewards as everything that the employee values in the
employment relationship. It includes aspects like compensation, benefits, development of
the employee and a flexible and fun working environment. A holistic approach which
aligns the reward offering with the business and people strategy of the organisation.
Compensation includes pay, incentives and monetary recognition programmes. Benefits
include health and welfare, retirement and capital accumulation programmes, as well as a
wide variety of specialty programmes such as child-care resources, fitness centres and
everything in between. Development of employees refers to programmes that promote
learning and skill development, career enhancement and personal growth.

The work

environment benefit encompasses both tangible and intangible offerings that promote
work/life balance and a positive work experience, such as flexible work arrangements,
recognition and innovative job design.

Total rewards include the overall value proposition that the employer offers the employee.
The total package would include compensation, benefits and career. Career refers to the
opportunity to learn, grow, and advance their careers (Gross & Friedman, 2004: 8).

Rumpel and Medcor (2006: 27) describe total rewards as an attempt to embrace
everything employees value and gain from working. It includes the employer-employee
relationship from a rewards perspective in an integrated human resource framework. The
framework emerged as a way to integrate Human Resource disciplines so that complex
reward issues regarding pay, benefits, training and development, and the work
environment could be addressed holistically, rather than with human resource silo solution.
Pay includes direct financial items, such as base pay, variable pay, incentives, stock and
equity sharing programmes and other monetary recognition programmes. Benefits include
indirect financial rewards, such as health and welfare benefits, retirement plans, saving
plans, vacation and other paid time off. Learning and development include programmes
and practices related to career training and employee development, supporting
performance management and succession planning systems. Work environment includes
programmes and practices related to organisational climate, such as diversity and

54

organisational culture initiatives, performance support, work/life balance such as flexible


working arrangements, elements related to organisational reputation, elements related to
challenging and interesting work and the quality of relationship with colleagues.

WorldatWork (2008) refers to total rewards as all the tools available to the employer that
may be used to attract, motivate and retain employees.

It includes everything the

employee perceives to be of value resulting from the employment relationship. The five
key reward elements according to WorldatWork are:

Compensation

Benefits

Work-life

Performance and recognition

Development and career opportunities.

Each element consists of different programmes and options. The challenge is to design
the package in such a way that optimal motivation would be achieved.

The definition of total rewards is best encapsulated by the definition consumer goods
company, Unilever, uses which states that: total rewards encompass all the elements of
what it means to come to work. This extends beyond total remuneration that is confined
to pay and benefits. It is about all the ways in which people are rewarded when they come
to work, such as pay, benefits and other non-financial rewards. Total rewards include
intrinsic aspects of work such as work environment and learning and development. Pay,
pension, flexible benefits, working environment, career opportunities, learning and
development, work-life balance, company culture, flexible working, and the recognition of
achievements are among the factors which would be included in a total reward programme
(Wilkonson, 2007: 3).

Armstrong and Murlis (2005: 1115) explain that the total reward concept emphasises the
importance of considering all aspects of reward as an integrated and coherent whole.
Each of the elements of total reward, namely base pay, pay contingent on performance,
competence or contribution, employee benefits and non-financial rewards are linked

55

together. A total reward approach is holistic with the reliance not placed on one or two
reward mechanisms or levers operating in isolation. The aim is to offer a value proposition
and maximise the combined impact of a wide range of reward initiatives on motivation,
commitment and job engagement.

The conceptual basis of total rewards is that of

grouping so that different reward processes are interrelated, complementary and mutually
reinforcing. The Hay group developed a model, the Hay Group Engaged Performance
model. The model will be explained in more detail in the following section. It consists of
six key clusters of rewards. The six clusters are:

Tangible rewards

Future growth/opportunity

Enabling environment

Inspiration/values

Work/life balance.

These clusters represent the possible different rewards that can be used by organisations
to attract, retain and motivate.

Total reward is the term that has been adopted to describe a reward strategy that brings
additional components such as learning and development, together with aspects of the
working environment, into the benefits package. It goes beyond standard remuneration by
embracing the company culture, and gives all employees a voice in the operation, with the
employer in return receiving an engaged employee performance. The elements of total
rewards have always existed in the workplace, but have often been taken for granted and
thus not actively managed. Under a total reward policy, all aspects of the work experience
are recognised and prominence is given not only to remuneration but also to less tangible
rewards. Experience shows that employees place a great emphasis on intangible rewards
when deciding where to work and the level of commitment to their work (Charted Institute
of Personnel and Development, 2009).

Zingheim and Schuster (2001: 33) describe four total reward components.
components are:

The four

56

Compelling future Making the organisation uniquely attractive to the people you
need.

Individual growth Providing the opportunity for workers to grow and learn.

Positive workplace Branding the organisation so that people are exited about
coming to work.

Total pay Attractive base pay, variable pay, benefits, recognition and celebration.

They refer to the better workforce deal that exists when a win-win the people in the
organisation adds value in exchange for making the organisation attractive.

The four

elements are the ingredients for making the workplace more attractive. They emphasise
however, that it is only beneficial to the organisation if they receive value in exchange for
it. Wilson (1995: 35) confirmed that reward systems must be used as a tool for change
rather than merely distributing compensation dollars. Reward systems must be used to
support specific behaviour and outputs which the organisation needs to achieve its
strategic goals.

Asinof (2006: S7) describes that the current trend towards flexibility and individualisation is
expected to continue. Organisations are continuously trying to give employees flexibility in
the structure of rewards so each employees individual needs satisfied. Bussin (2008)
compares possible remuneration implications of the year 2020 with the current practices.
The comparison is shown in Table 3.1.

Table 3.1: Comparison between current and 2020 pay implications


Current

2020

Pay for the job

Pay for the individual

One size fits all

Taylor made

Guaranteed pay variable pay ratio 60:40

Guaranteed pay variable pay ratio


10:90

Retirement fund contributions (7.5% - 12.5%)

Self funded portable trusts matched


with shares

Survey individual salaries

Survey job family costs

Financial accounting according to GAAP

Knowledge accounting is the norm

Many levels (up to 25 in some organisations)

Between 2 and 5 levels

Pay mostly secret

Pay part of the financial statements


Source: Bussin, 2008

57

The future of rewards is going to be challenging. Bussin (2008) states that: it is not that
pay is the most important thing in organisations, but it is a lot more important than
whatever comes 3rd or 4th.

This section focused on the different meanings and contents of the concept total rewards.
The following section will focus on different total reward models that were developed by
institutions or individuals. The models combine different reward elements into a structure
that will ensure attraction, retention and engagement of employees.

3.5

TOTAL REWARD MODELS

Various organisations have developed total reward models. The models have as aim to
explain the relationship between different reward offerings and the desired result from
employees. The characteristics of the models are shown in Table 3.2.

Table 3.2: Characteristics of total reward model approaches


Characteristic
Holistic

Explanation

It focuses on how employers attract, retain and engage employees to


contribute to organisational success using an array of financial and
non-financial rewards.
Best fit
It adopts a contingency approach total reward programmes need to
be tailored to the organisations own particular culture, structure, work
process and business objectives.
Integrative
It delivers innovative rewards that are integrated with other human
resource management policies and practices.
Strategic
It aligns all aspects of reward to business strategy total reward is
driven by business needs and rewards the business activities,
employee behaviour and values that support strategic goals and
objectives.
PeopleIt recognises that people are a key source of sustainable competitive
centered
advantage and begins by focusing on what employees value in the
total work environment.
Customised
It identifies a flexible mix of rewards that offers choice and its better
designed to meet employees needs, their lifestyle and stage of life.
Distinctive
It uses a complex and diverse set of rewards to create a powerful and
idiosyncratic employer brand that serves to differentiate the
organisation from its rivals.
Evolutionary
It is a long-term approach based on incremental rather than on radical
change.
Source: Charted Institute of Personnel and Development, 2009.

58

The next part of the section will be used to discuss different total reward models.

3.5.1

WorldatWork total rewards model

3.5.1.1 Introduction
In 2000 the American Compensation Association changed its name to WorldatWork. The
name change affirmed its commitment to the concept of total rewards as a more
comprehensive model reflecting the value employee receive from their employment
(WorldatWork, 2007: 4). After many earlier models and debate, the board of directors of
WorldatWork approved the final total reward model in October 2005. The model was
developed with the participation of many members of WorldatWork. The participation of
members was achieved through focus groups and interviews. The model was then tested
through participating of members in surveys (WorldatWork, 2007a: 5).

3.5.1.2 Purpose of model


The model was created to achieve the following:

Represent the professions conceptual framework for total rewards.

Serve as a tool for practitioners to use with managers in their own organisations.

Depict the official WorldatWork model of total rewards.

Serve as a foundation and guidepost for intellectual capital development in the


profession.

Become a tool for academics, consultants and others to support their intellectual
capital endeavours (WorldatWork, 2007a: 6).

3.5.1.3 Explanation of WorldatWork total rewards model


Figure 3.2 shows the comprehensive total rewards model that demonstrates the context,
components, and contributions of total rewards as part of an integrated business strategy.

59

Figure 3.2: WorldatWork total rewards model


Source: WorldatWork, 2007: 6

The model describes five elements of total rewards, which form the total reward strategy.
The components of the total rewards strategy are:

Compensation

Benefits

Work-Life

Performance and recognition

Development and career opportunities.

The components represents the programmes and practices organisations use to attract,
motivate and retain employees. Organisations choose different programmes and practices
to offer and align the value proposition that creates value for both the organisation and the
employee. An effective total reward strategy results in satisfied, engaged and productive
employees who in exchange achieve the desired business performance and results
(WorldatWork, 2007b).

The model recognises that total rewards operate in the context of overall business
strategy, organisational culture and human resource strategy. An organisation exceptional

60

culture or external brand value may be considered a critical component of the total
employment value proposition. The globe, which is the backdrop of the model, represents
the influences on organisations, such as:

Legal/regulatory issues

Cultural influences and practices

Competition.

A change in these influences could result in a change in total reward strategy.


(WorldatWork, 2007b).

The exchange relationship between the employer and employee is an important dimension
of the model.

The employer provides total rewards and in exchange the employee

provides time, talent effort and results (WorldatWork, 2007b).

3.5.1.4 Definitions of model concepts


The definitions of the components and elements of the total rewards strategy are
explained in Table 3.3.

61

Table 3.3: Definitions of total rewards strategy model of WorldatWork


Total reward
components

Definition

Core elements

Explanation of core
elements

Fixed pay

Is nondiscretionary
compensation that does not
vary accroding to performance.
Base pay
It is usally determined by
organizations pay philosophy
and structure.

Variable pay

It is also know as "pay at risk".


It changes directly with the
level of performance or results
achieved. It is a one-time
payment that must be reestablished and re-earned
each performance period.

Pay provided by an employer to an


employee for services rendered (i.e., time,
Compensation
effort and skill). Includes both fixed and
variable pay.

Social insurance

Benefits

Programs an employer uses to supplement


the cash compensation that employees
Group insurance
receive. These health, income protection,
savings, and retirement programs provide
security for employees and their families.
Pay for time not
workerd

Work-Life

A specific set of organizational practices,


policies, and programs plus a philosophy
that actively supports efforts to help
employees achieve success at both work
and home.

Programs designed to protect


the employee's income flow
when not actively engaged at
work.

At work (Breaks, clean-up time,


uniform changing time), away
from work (vacation, company
holidays, personal days).

Workplace flexibility

Virtual offices

Paid and unpaid time


off.

Gradual return to work after


parental, family or disability leave
Fitness centers, or near-site, and
subsidized local centers
Child-care centers on-site or
nearby
Educational scholorships for
children
Time off to volunteer for
community service

Health and well-being


Caring for
dependents
Financial support

Performance planning
Performance: The alignment of
organizational, team, and indiviudal efforts Performance
toward the achievement of business goals
and organizational success. It includes
establishing expectations, skill
demonstraton, assessment, feedback, and
continiuous improvement.
Performance
feedback

Recognition: Acknowledges or gives


special attention to employee actions,
efforts, behavior, or perfromance. It meets
an intrinsic psychological need for
appreciation for one's efforts and can
support business strategy by reinforcing
certain behaviors that contribute to
organizational success.

Short-term - Less than one year


performance and include
performance incentives.
Long-term - Performance longer
than one year and include stock
options, performance shares or
units.
Unemployment, Workers
compensation, social security,
occupational dissability.
Medical, Dental, Vision,
prescription drugs, mental
health, life insurance, disability,
retirement and savings.

Community
involvement
Mangement
involvement/cultural
change interventions

Performance
and Recognition

Examples

Process whereby expectations


are established linking
individual with team and
organizationa goals.
Is the manner of
demonstrating a skill or
capacity.

Strategic planning sessions to


determine strategic goals and
alignment of individuals to
support these goals

Communicates how well


people do a job or task
compared to expectations,
Performance management
performance standards, and
discussion
goals. Performance feedback
can motivate employees to
imporve performance.

Formal recognition
programs

Informal recognition
programs

Source: WorldatWork, 2007: 711

Formal programmatic
recognition. Achieving a set
target

Simple and non formal


recognition events

62

The model does exist in a context as explained earlier. The definitions of these are briefly
explained in Table 3.4.

Table 3.4: Explanation of contextual aspects of WorldatWork total rewards model


Aspect

Explanation

Culture

Culture consists of the collective attitudes and behaviours that influence how
individuals behave. Culture determines how and why a company operates in
the way, it does. Typically, it comprises a set of often unspoken expectations,
behavioural norms, and performance standards to which the organisation has
become accustomed. Organisational culture is subject to internal and external
influences; thus, culture is depicted as a contextual element of the total rewards
model, overlapping within and outside the organisation.
Environment is the total cluster of observable physical, psychological, and
behavioural elements in the workplace. It is the tangible manifestation of
organisational culture. Environment sets the tone, as everyone who enters the
workplace reacts to it, either consciously or unconsciously. The external
environment in which an organisation operates can influence the internal
environment; thus, environment is depicted as a contextual element of the total
rewards model, overlapping within and outside the organisation.
The ability an organisation has to draw the right kind of talent necessary to
achieve organisational success. Attraction of an adequate supply of qualified
talent is essential for the organisations survival. One way an organisation can
address this issue is to determine which attractors within the total rewards
programmes bring the kind of talent that will drive organisational success. A
deliberate strategy to attract the quantity and quality of employees needed to
drive organisational success is one of the key planks of business strategy.
An organisations ability to keep employees who are valued contributors to
organisational success for as long as is mutually beneficial. Desired talent can
be kept on-staff by using a dynamic blend of elements from the total rewards
package as employee move through their career life cycles.
The ability to cause employees to behave in a way that achieves the highest
performance levels. Motivation comprises two types:
Intrinsic motivation : Linked to factors that include an employees sense
of achievement, respect for the whole person, trust, appropriate
advancement opportunities, and others.
Extrinsic motivation: Extrinsic motivation is most frequently associated
with rewards that are tangible such as pay.
There are also three defined levels of intensity with regard to motivation:
Satisfaction: How much I like things here.
Commitment: How much I want to be here.
Engagement: How much I will actually do to improve business results.

Environment

Attraction

Retention

Motivation

Source: WorldatWork, 2007: 11

63

A suggested total inventory of possible rewards organisations can offer employees forms
part of the literature from WorldatWork. The list is shown in Figure 3.3.

Figure 3.3: WorldatWork total rewards inventory checklist


Source: WorldatWork, 2007c: 3

64

WorldatWork has been an important force behind the move to a new approach of total
rewards where the multiplicities of needs of employees are recognised.

The model

explicitly sets out a foundation for attracting, retaining and motivating, based on
compensation, benefits and the work experience (Richter, 2003: 18).

3.5.2

HayGroup engaged performance model

3.5.2.1 Introduction
Hay Group is a leading consultancy with some 2000 staff in 73 offices across 38 countries
focusing on enabling organisations to realise their strategy through people.

In South

Africa, they have offices in Johannesburg and Cape Town. The model was developed
because of the increased focus on employee engagement. (Armstrong & Murlis, 2005:
10).

3.5.2.2 Explanation of model


The model was created from the following statement:

Creating a fun, challenging, and empowered work environment in which individuals are
able to use their abilities to do meaningful jobs for which they are shown appreciation is
likely to be a more certain way to enhance motivation and performance even though
creating such an environment may be more difficult and take more time than simply turning
the reward lever. (Armstrong & Murlis, 2005: 12).

The argument is used that cash is a weak tactic in the overall reward strategy. Cash is too
easy to replicate. Intrinsic rewards are far more difficult to emulate. It is however critical to
have a deep understanding of the employee needs across all elements of reward.
(Armstrong & Murlis, 2005: 12). The components of total rewards according to them are
shown in Figure 3.4.

65

Figure 3.4: Components of total rewards


Source: Armstrong & Murlis, 2005: 12

In the late 1990s, the Hay Group developed a model from their employee opinion and
reward work, which did not only focus on the transactional and relational elements, but
focused also on what employees defined as a compelling, high-performance workplace.
As Figure 3.5 shows, the model comprises six key elements. Research done by Hay
Group suggests that the Inspiration and values cluster, followed by the Future growth
and opportunity cluster is what employees value most. Tangible rewards came third or
fourth except in those organisations where a decline in salary market competitiveness has
raised the attention on pay (Armstrong & Murlis, 2005: 13).

66

Figure 3.5: The Hay Group engaged performance model


Source: Armstrong & Murlis, 2005: 14

3.5.2.3 Definitions of the engaged performance model


The definitions of the model would focus only on the relational rewards and not
transactional rewards. The definitions of the transactional rewards for most models do not
differ significantly.

3.5.2.3 (a) Inspiration and values

Quality of leadership
People join organisations and leave bosses. Employees have thats it moments
when they decide to stay or go either because their employer works or carries out its
activities in a way they care about or because the conflict with their personal values
becomes too uncomfortable to tolerate. Leaders exist to get things done through
people, ensuring that tasks are achieved and strategies delivered, but also building
and maintaining supportive and constructive relationship between themselves and
the employees in their team or group. Leaders are the sources of important rewards
such as recognition through effective feedback, providing the scope to carry out
meaningful work, and providing opportunities for development and learning.

Organisational values and behaviours

67

The most successful companies had a clear vision and a set of values, which were
embedded, enduring, collective, measured and managed. Clear evidence existed
between positive attitudes towards organisational policies and practices, levels of
satisfaction, motivation and commitment, and operational performance.

Reputation of the organisation


People would like to work for a high-reputation employer. This normally forms part of
the organisations value proposition.

Risk sharing
Employees have a strong sense of unfairness if they are asked to shoulder
unacceptable levels of risk in an organisation. One aspect, which forms part of risk
sharing, is accountability and support for decision-making. Does the organisation
have a culture of blame fixing or are heroic failures tolerated as part of organisational
learning?

Recognition
Recognition is one of the most powerful methods or rewarding people. Employees
need not only to know how well they achieve their objectives or carried out their work,
but also that their achievements are appreciated. Recognition can be provided by
positive and immediate feedback and praise where it is well deserved. Managers
who listen to and act upon the suggestions of their team members and, importantly,
acknowledge their contribution also provide recognition. Procedural justice is very
important here and needs thought and careful management.

Communication
This section is not only about the quality of organisational communication. It focuses
more on something called employee voice. Employee voice is the term increasingly
used to cover a whole variety of processes and structures that enable and
sometimes empower employees directly and indirectly to contribute to the decision
making in the firm. It is rewarding for the employees to be able to contribute to the
success of the organisation or their team by having a voice in the affairs of the
organisation.

The organisation through its policies for involvement can provide

motivation and increase commitment and engagement by putting people into


situations where their views can be expressed, listened to and acted upon
(Armstrong & Murlis, 2005: 1517).

68

3.5.2.3 (b) Future growth and opportunity

Learning and development beyond current job


People enjoy learning and it is an important principle for both organisations and
people. The value of continuous, ongoing training and development in creating a
virtuous spiral is critical to any organisation. Learning is an intrinsically satisfying and
rewarding experience.

The importance of the change to grow as a means of

rewarding people and therefore motivating them cannot be over-emphasised. It is


also rewarding for employees if they are giving the opportunity to be equipped for the
next level of responsibility. This can be done by formal training programmes and
coaching interventions.

Career advancement opportunities


This aspect is linked to learning and development. The question employees are
asking is if there will be any opportunities to progress.

The employees want

reassurance that processes are in place for identifying talent, for succession planning
and for fair and reasonable transparent means of making promotion decisions.

Performance improvement and feedback


Performance management is an important mean of providing total reward. It serves
as the basis for the development of a positive psychological contract by clarifying the
mutual expectations of managers and their staff.

Constructive feedback can be

highly motivational (Armstong & Murlis, 2005: 17-18).

3.5.2.3 (c) Quality of work

Perception of the value of work


People channel more of their discretionary effort into their work if they believe it has
meaning and is worthwhile and appreciated. The consequence of the way in which
leaders treat their people can also contribute to more effort that is discretionary.

Challenge/Interest
No person chooses to work in jobs that are repetitive and boring and where there is
little challenge or interest in the work.

The importance of job design and role

development cannot be over emphasised. Job design has two aims: first, to meets
the needs of the organisation for operational efficiency, quality of product or service
and productivity and, second, to reward individuals, by satisfying their needs for
meaningful work that provides for interest, challenge and accomplishment. Jobs and

69

roles are, or should be, shaped over time by managers and team members to make
the best of peoples skills and capabilities and provide optimum levels of intrinsic
reward.

Achievement
People feel rewarded and motivated if they have the scope to achieve as well as
being recognised for the achievement. Achievement motivation can be supported
and developed by organisations through developing self-confidence and self-esteem,
by sound job design and by a constructive approach to performance management.

Freedom and autonomy


People in developing economies do not welcome a parent-child or command-andcontrol-based work environment. They expect to be treated as sentient adults and
accorded a measure of freedom and autonomy in the way they go about their work.
Organisations have much to gain by supporting and enabling reasonable degrees of
freedom and autonomy.

Workload
Workload has to do with the pace of work and manageable workloads. Work where
high-pressure and control over pace of work is not occasional but rather the norm
leads to low levels of motivation. Employees who do work in these circumstances
need different rewards to be able to manage work/life balance.

Quality of work relationships


Not only is the quality of leadership important but also the quality of colleagues.
Having congenial, supportive and reasonably like-minded fellow employees can
make a big difference to engagement.

Talent management policies should pay

dividends especially if the organisation has recruited for behaviours such as effective
team working and service orientation that require collaboration and are typically
essential to high performance (Armstong & Murlis, 2005: 19-21).

3.5.2.4 (d) Enabling environment

Physical environment
Well-designed and organised offices and work areas make a significant difference
to how people feel about their work.

It also gives a message how much the

organisation values employees and the standards it expects of them.

70

Tools and equipment


Employees enjoy and relish the opportunity to work with state-of-the-art tools and
equipment. It is not strange to lose good employees because of feeling not valued
because of old technology and equipment that must be used. When costs are a
constraint it is very important to explain why and what the plans for eventual change
are.

Job training (current position)


Access to training is seen as a key element of an employees overall package. It is
even more important in delayered organisations where upward growth through
promotion can be restricted but people can still work on effectiveness in their
current role or develop laterally.

It also fosters employability both within the

organisation and beyond, and enhanced employability is itself perceived as a


reward.

Information and processes


Most employees want to work with open, transparent information flows on issues
affecting their work and they generally expect bureaucracy to be minimised as far
as possible.

We live in an environment where knowledge sharing is more

respected than a knowledge is power mindset, and people can be easily


demotivated by secretiveness and the lack of trust that implies.

Safety/personal security
It cannot be expected of people to be motivated if they feel their personal safety and
security are at risk. It is important to ensure the safety and security of employees.
If not possible, it is important to minimise the risks as far as possible (Armstong &
Murlis, 2005: 2223).

3.5.2.3 (d) Work/life balance

Supportive environment
When people come to work, they do not leave their lives behind. Most employers
realise this and openly recognise needs outside work in their working practices, in the
leadership styles in use and in an inclusive and supportive culture.

Employers

helping employees build on their strengths and dealing swiftly with issues such as
discrimination and bullying.

71

Recognition of lifecycle needs/flexibility


There has been a rising trend in the development of more flexible working
arrangements. Maternity and paternity leave provisions are important in this, but also
critical are employer attitudes to ongoing family responsibilities, notably childcare and
eldercare issues.

Work/life balance policies can therefore reward people by

recognising their needs outside work by providing more flexible working


arrangements and making it clear that people will not be rewarded simply because
they stay on after normal finishing time. It is what they deliver that counts, not how
long they work.

Security of income
The threat of job loss or layoff as well as remuneration structures with a very low
base salary threshold and high variable income can have a server effect on
employee feelings of security and their ability to work effectively. It is hard to be
committed to an employer whose levels of commitment in return are in doubt. The
lack of security on income is a very real source of demotivation by employees.

Social environment
It is a reality that work is a social institution and that employees expect to have a
workplace that is some kind of community.

This will normally be expressed by

activities with colleagues outside of work. The social activities may take place in
working time and may be organised by the employer. If these activities are largely
missing and work is seen as an impersonal and unsocial environment this will have
an effect on levels of engagement (Armstong & Murlis, 2005: 2324).

3.5.2.4 HayGroup total reward framework


The Hay group has also found through research that most organisations do not do an
adequate job of understanding the landscape and perceptions around their current reward
programmes. They developed the total reward framework, as shown in Figure 3.6, to
ensure a balance between the needs of the organisation and the employee. They use
focus groups to ensure they have sufficient knowledge about the perceptions of an
organisations current reward offering. When constructing the elements of the engaged
performance model they ensure that a balance between employee and organisations
needs does exist (HayGroup, 2009: 2).

72

Figure 3.6: Hay Group Total Reward Framework


Source: HayGroup, 2009: 2

Employee engagement means striking a bargain with employees. Organisations create


the conditions that make work more meaningful and rewarding for employees.
Employees, in return, put extra effort into their work and into delivering superior
performance.

The reward programme is the obvious human capital management

reinforcement mechanism and is core to reinforcing employee engagement.

3.5.3

Towers Perrin total rewards effectiveness blueprint

3.5.3.1 Introduction
Towers Perrin was incorporated in 1934.

In 1962, they started compensation and

organisation consulting services. Today they have firms all over the world-servicing clients
that include three-quarters of the worlds 500 largest companies. They provide innovative
solutions in the areas of human capital strategy, programme design and management, and
in the areas of risk and capital management, insurance and reinsurance intermediary
services, and actuarial consulting (Towers Perrin, 2009).

73

Research by Towers Perrin shows that employers must be prepared to deploy a broad
range of reward elements to attract, retain and engage the talent they need for business
success. The right insights into factors that drive employee attitudes and behaviours can
enable the organisation to better target key segments and tailor its programmes,
investments and communication accordingly. This approach allows the company to focus
investments on reward elements and programmes that are most important to key
populations and therefore potentially more effective in supporting desired business results
(Towers Perrin, 2007: 1).

3.5.3.2 Explanation of model


The Towers Perrin total rewards effectiveness blueprint assists organisations to ensure
that reward programmes support talent management objectives and meet the needs of the
business as seen in Figure 3.7.

Figure 3.7: Towers Perrin Total Rewards Effectiveness Blueprint


Source: Towers Perrin, 2007: 2

The critical elements of the model are briefly explained.

Understand where value is created in the organisation and how that may change
over time.

74

Identify the critical workforce segments that will drive business results and,
consequently, the companys efforts around talent attraction, retention and
engagement.

Conduct workforce planning analysis as a complement to strategic business planning


to identify current and future talent needs, and determine how the organisation will
secure the right pipeline of talent from both internal and external sources.

Ensure that your total rewards philosophy and guiding principles reflect the need to
attract and retain key talent segments, which may include future leaders, R&D, sales,
customer service talent and other groups.

To complement and enhance talent management processes, use rewards


optimisation to understand the needs and preferences of key employees and to
develop optimal reward packages.

Create a transition plan to implement reward packages and employment brand that
will provide competitive advantage in key labour markets and support business goals
(Towers Perrin, 2007: 2).

Central to the model of Towers Perrin are the reward strategies and design of an
organisation. Tihs consists of four quadrants. The four quadrants with elements of each
quadrant are listed in Table 3.5.

Table 3.5: Towers Perrin four quadrants of total reward


Quadrants

Examples of elements

Compensation

Base pay, variable pay, stock and equity sharing,


monetary recognition

Learning & development

Career development, learning experiences, performance


management, succession planning, training

Benefits

Health care, retirement, savings, time off

Work environment

Organisation climate, leadership, performance support,


work/life balance, organisational reputation, challenge of
the work, relationships with colleagues
Source: Rumpel & Medcof, 2006: 29

75

3.5.3.3 Attraction, retention and engagement drivers of model


Towers Perrin published survey results that show the top 10 elements to attract, retain and
engage employees.

The results are shown in Table 3.6.

The number next to each

element shows the ranking of the element. The study was completed in 2003 and involved
40 000 employees working full time for medium and large organisations based in North
America (Towers Perrin, 2003: 23).

Table 3.6: Top 10 drivers of attraction, retention and engagement


TOP 10 ATTRACTION DRIVER
PAY
2 Competitive base pay
8 Pay raises linked to individual performance
BENEFITS
1 Competitive health care benefits
3 Work/life balance
4 Competitive retirement benefits
LEARNING AND DEVELOPMENT
5 Career advancement opportunities
6 Challenging work

WORK ENVIRONMENT
7 The caliber of coworkers
9 Recognition for work
10 Reputatuion of the company

TOP 10 RETENTION DRIVERS

TOP 10 ENGAGEMENT DRIVERS

PAY
6 Competitive base pay

PAY

BENEFITS
10 Overall satisfaction with benefits needed in
day-to-day life

1
2
4
8

LEARNING AND DEVELOPMENT


Career advancement opportunities
Retention of high-caliber people
Development of employees skills
Challenging work

3
5
7
9

WORK ENVIRONMENT
Overall work environment
Resources to get the job done
Clear goals from manager
Manager inspires enthusiasm

BENEFITS

2
4
5
10

1
3
6
7
8
9

LEARNING AND DEVELOPMENT


Challenging work
Customer orientation
Career advancement opportunities
Senior mangement vision
WORK ENVIRONMENT
Senior management interest in employees
Decision-making authority
Reputation of the company
Collaboration with coworkers
Resources to get the job done
Input on decision making

Source: Towers Perrin, 2003: 23

It is interesting to note that elements that attract individuals to an organisation differ from
the elements that retain and engage the employee. This supports the head and heart
argument of Veldsman as explained in Figure 2.3. Organisations therefore need to offer a
basket of rewards to attract, retain and engage employees.

3.5.4

The better workforce deal

3.5.4.1 Introduction
Zingheim and Schuster (2000: 23) refer to the concept of Stephen R. Covey which refers
to a win-win or no deal arrangement. In the context of work, it suggests that if the
individual and the company cannot both win from the employment relationship, they should
not make an employment deal. This would prevent deals where one party is a winner and
the other a loser. They talk about the concept of a better workforce deal that creates a

76

win-win for both parties. It focuses on figuring out how the company and workforce can
combine to share the abundance of success. It also implies that when the organisation is
not successful, employees should also share in this reality.

The organisation offers rewards to result in a win for the employee. Organisations need to
change their reward offering if this is not the case. The business case includes defining
the reasons for needed pay changes (Zingheim & Schuster, 2000: 25).

3.5.4.2 Total reward components


Total rewards in any organisation have four interlocked and directly related components.
The four components are illustrated in Figure 3.8. Two of the components, total pay and a
positive workplace, are at the foundation because how people are paid and how they view
the work environment are essential to attracting and keeping individuals.

They are

however not enough and organisations must consider providing the individual growth
component to make people increasingly valuable, and the component of a compelling
future such that people have opportunities to continue adding value to the organisation
(Zingheim & Schuster, 2000: 13).

Figure 3.8: Total reward components The better workforce deal


Source: Zingheim & Schuster, 2000: 13

77

3.5.4.3 Definitions of four components


3.5.4.3 (a) Individual growth
The first component of total rewards is individual growth. The people great organisations
require want to grow, learn, and become increasingly valuable. This creates need for:

Believing that investing in people gives the company lasting advantage.

Making development and training active and continuing.

Measuring and managing performance effectively.

Providing challenging career opportunities (Zingheim & Schuster, 2000: 14).

3.5.4.3 (b) Compelling future


The people great organisations need also want a vision of the future of which they are an
essential element. It involves developing ways to make people stakeholders so they want
the organisation to prosper, creating a work environment that provides a win-win
opportunity over a sustained period, and building a company that people can be proud of
both internally and in public. This means an organisation that is growing profitably as well
as one that actively invests in people.

In addition, organisation values are ones that

people can appreciate and want to live by (Zingheim & Schuster, 2000: 14).

3.5.4.4 (c) Total pay


The total pay solution base pay, short-term variable pay, cash and equity long-term
variable pay, recognition, and benefits must be attractive, be positive, and distinguish the
company (Zingheim & Schuster, 2000: 14).

3.5.4.5 (d) Positive workplace


The people in great organisations are positive and motivated to add value because the
organisation believes they are important. This requires having an effective leadership
team that sets the right examples, working with exciting and positive associates and
sharing accountability for delivering meaningful results by doing challenging and
interesting work. It means creating an atmosphere of trust and commitment (Zingheim &
Schuster, 2000: 14).

78

According to Zingheim and Schuster (2000: 19), most total reward strategies have a strong
alignment of pay with performance as one of their key tenets.

How organisations

accomplish this varies from organisation to organisation, depending on the business


strategy. The organisations ability to customise and implement the total reward strategy
determines if the reward programmes are successful.

3.5.5

Summary

This section briefly explained five of the most well known models with regard to total
rewards. The next section of this chapter will focus on the benefits of total reward models.

3.6

BENEFITS OF ADOPTING A TOTAL REWARD APPROACH

3.6.1

Introduction

The aim of total reward models is to create an environment in which each person feels a
sense of responsibility and ownership of the organisation. Only by creating a stake in the
results can we truly achieve this. Only when people understand and feel reinforced for
their actions can the organisation continually excel.

One of the aims of total reward

models is to create the conditions that would make an organisation more competitive and
successful. This can be done by enabling employees by letting them feel more valued and
rewarded for their achievements (Wilson, 1995: xvii).

3.6.2

Important benefits of adopting a total reward approach

According to Armstrong and Murlis (2005: 27), the benefits of a total reward approach are
considerable. The most important of these benefits are:

Greater impact. The combined effect of all rewards will make a deeper and longerlasting impact on the motivation and commitment of people.

Enhancing the employment relationship. The employment relationship created by


a total rewards approach will appeal more to and engage individuals because it
makes use of relational and transactional rewards.

Increased engagement as part of the process. Involving people in designing their


own reward package gives them a strong message about the organisation and its
values.

79

Flexibility to meet individual needs. Relational rewards may bind individuals more
strongly to the organisation because they recognise and can answer special
individual needs.

Winning the war of talent.

Relational rewards help to deliver a positive

psychological contract and can serve as an effective brand and differentiator in the
recruitment market. It is more difficult for competitors to replicate than individual pay
practices. The organisation can become an employer of choice and therefore attract
and retain the talented people, it needs.

WorldatWork (2007: 15) adds the following benefits of adopting a total reward approach:

Improved recruitment and retention. Organisations are facing key shortages of


top performers. A total reward strategy is critical to addressing the issues created by
recruitment and retention. It can help create a work experience that meets the needs
of employees and encourages them to contribute extra effort.

Reduced labor costs or cost of turnover.

The cost of turnover is sometimes

invisible. The estimated cost of turnover varies from 30 per cent to 150 per cent of
the yearly package of a specific position. This cost excludes indirect cost such as
losses from customers and sales and decreased efficiencies.

Adopting a total

reward strategy reduces the possibility of staff turnover.

Enhanced profitability. Employees are looking for something new at the same time
that organisations are struggling to deliver their financial targets. Employers are
readily cutting programmes to trim costs. Organisations needs to realise that by
remixing their rewards in a more cost-effective way, they can strengthen their
programmes and improve employees perception of value without necessarily
increasing their overall investment. As organisations start to understand their true
aggregate costs they can measure if they are getting a reasonable return on their
overall investment. The challenge is to implement a flexible total rewards programme
that will deliver the highest level of return for the organisation.

80

According to the Watson Wyatt human capital index an organisation can experience a
u16.5 per cent increase in shareholder value by improving or adopting a select set of
rewards and accountability practices (Pfau & Kay, 2002: 7).

Gross and Friedman (2004: 9) mention the following advantages:

Connects with the business strategy to create a high-performance culture. A


reward programme can either drive or diminish organisational performance,
depending on how well it connects with and supports the business strategy. It is
important to realise this benefit that the reward system must support the business
strategy.

Supports the employment brand.

The total reward package is an important

instrument to change behaviour of employees to live the employment brand of the


organisation.

Zingheim and Schuster (2000a: 17) describe some of the most important benefits of
adopting a total reward approach being the opportunity for individual growth and the
creating of a positive workplace.

Individual growth. People want to add value to their organisation. They want to
work for an organisation that will invest in their growth through training and career
development. They want feedback and coaching to help them chart what they must
do to become increasingly valuable.

Positive workplace. An employer of preference is a company that believes people


count, gives them a chance to be involved in the business, commits to and trusts
them, and establishes open communication about what is going on and what they
can do to make a difference.

They believe that total rewards attract people who want more than just pay and therefore
create a great place in which to work.

81

Kaplan (2005: 33) emphasises many advantages of adopting a total reward approach.
Two of the advantages not yet discussed are:

Congruency. A total rewards approach provides an integrated, comprehensive view


of all rewards to promote congruency and effectiveness of plan design and delivery,
in alignment with the organisations business strategy and people strategy.

Road map for human resource practitioners. A written total rewards strategy
serves as a reference guide to human resource professionals who are designing new
programmes or updating existing ones.

3.6.3

Summary

The section focused on the benefits identified by research when adopting a total reward
approach. The benefits varied from an increase in shareholder value to assisting human
resource practitioners in making reward decisions.

3.7

SUMMARY

The chapter started with explaining the context of total rewards and some of the reward
principles. It was identified that total rewards as a concept has developed over time and is
still today defined differently by different organisations and researchers. Some of the most
well-known total reward models were explained. The last part of the chapter focused on
the benefits of adopting a total reward approach which made it clear that an organisation
can not afford not to adopt a total rewards approach.

82

CHAPTER FOUR
APL CARTONS (PTY) LTD EMPLOYEE ENGAGEMENT AND CURRENT
TOTAL REWARDS PROPOSITION

4.1

INTRODUCTION

This chapter focuses on determining the current level of employee engagement and the
total reward proposition of APL Cartons (Pty) Ltd. The level of employee engagement will
be determined by using the 12-item survey instrument the Q. The current reward
proposition will be determined by the use of focus groups, interviews and the current
human resource policy of the organisation.

4.2

APL CARTONS (PTY) LTD EMPLOYEE ENGAGEMENT

4.2.1

The Gallup Q survey instrument

Gallup has developed a 12-item survey instrument the Q - designed to measure


engagement levels of a given group of employees. When they began to research, they
interviewed more than million employees over a 25-year period asking them hundreds of
different questions. From this information and questions, they delved to find the best
questions, those that most consistently and reliably discriminated top-performing
workgroups from their poorer-performing peers. After a comprehensive review of all the
workplace studies they had conducted up to that time, the final 12 emerged as the items
that had the strongest linkages to high performance and did the best job of measuring how
well companies were meeting employees core requirements on the job (Fleming &
Asplund, 2007: 163).

Since the instrument was developed it has been administered to more than 10 million
people in 51 languages and 144 different countries for 736 organisations. It has been
tested in many cultures and among employees of all ages and educational levels in 736
organisations. It has proven to be an accurate reflection of whether the core requirements
of employees are being met in the workplace. It was found that high scores on the 12
items reflected an underlying emotional engagement in the employees who took the

83

survey, an engagement that results in improved business outcomes, including increased


levels of productivity, profitability, and employee retention (Fleming & Asplund, 2007: 163).

The four dimensions of employee engagement together with a brief description of the
questions at each dimension can be seen in Figure 4.1.

Figure 4.1: Four dimensions of employee engagement


Source: Flemming and Asplund, 2007: 161

4.2.2

Methodology

In April 2009, the total permanent staff compliment of the company was 334 employees.
To ensure that the sample would be reliable, the formula for sample size determination in
the case of sampling from a finite population was used to determine the size of the
sample. The employees were placed in different strata according to the job grade of the
employees position, as well as if the position was a shift working position or not. Table
4.1. shows the distribution of the employees into the different identified strata.

84

Table 4.1: Distribution of APL Cartons (Pty) Ltd employees into strata
Strata

Job grade
1-6
7-9
10 - 13
14 - 99
Total

Non-Shift

7
17
42
12
78

Shift

Total

0
0
55
201
256

7
17
97
213
334

Source: APL Cartons (Pty) Ltd, 2009

The formula was calculated and the number of employees who needed to participate in the
sample was 45. The number of employees in each strata is shown in Table 4.2.

Table 4.2: Distribution of APL Cartons (Pty) Ltd sample employees


Job grade
1-6
7-9
10 - 13
14 - 99
T otal

Non-Shift

1
2
6
2
11

Shift

Total

0
0
7
27
34

1
2
13
29
45

Source: APL Cartons (Pty) Ltd, 2009

The specific employees to participate in the sample were selected by using a random
function of Microsoft Excel.

Employees were distributed in the different strata in a

spreadsheet. Next to the first name in the strata, the number one was placed. The
following person was number two with each additional employee receiving the next
number. An example would be the number of people, who do not work shifts between the
job grades of 10 to 13 and who needed to be selected, was six. The random function
would be programmed to supply six numbers between the total ranges of employees in
that strata being 42. The employees names that were listed next to the six numbers were
then selected for the sample. Using this method, the 45 employees were selected.

The questionnaires were distributed to the employees who have e-mail and internet
facilities via e-mail. The employees who do not have access to internet and e-mail were

85

placed in groups and the questionnaires were completed by them in pencil. The process
was managed and interpreted by Anneke de Bod from the University of Stellenbosch. She
is a manager of consulting from the Faculty of Economic and Management Services. All
questionnaires were completed anonymously. The questionnaire is added as Appendix A.

4.2.3

Results of employee engagement questionnaire

The number of questionnaires completed successfully was 42. The rating scale for the
twelve questions was as follow:

Not true

Rarely true

25%

Sometimes true

50%

Mostly true

75%

Always true

100%

0%

The interpretation of the actual scores was as follow:

75% ( 4/5)

strong workplace culture needs to be nurtured and leveraged

50% 75% (3/5)

average workplace culture needs to be developed

< 50% (< 3/5)

below average to poor needs to be overhauled.

In addition, the questions form a hierarchical path of employee engagement.

The

employees needs must be met at each camp sequentially. Poor scores in the lower
camps should therefore be addressed first (de Bod, 2009: 3).
hierarchical path of employee engagement.

Figure 4.2 shows the

86

Figure 4.2: Four dimensions of employee engagement and hierarchy of camps


Source: Adjusted from Flemming and Asplund, 2007: 161; de Bod, 2009: 1

The results of the completed questionnaires can be seen in Table 4.3. It is clear from the
results that the base camp can only be nurtured and leveraged, but from camp 1 it is
necessary to develop specific interventions to be more successful in the dimensions. The
total level of employee engagement will however be discussed later in this chapter.

Table 4.3: Results of Gallup12-item survey instrument


Score
Hierarchy

Element
Number of respondents

Base Camp

Camp 1

Camp 2

Camp 3

APL
sample
42

Expectations known

89.3%

Have materials & equipment

78.0%

Do what I do best

81.5%

Recognition last 7 days

54.8%

Supervisor cares

69.6%

Development encouraged

70.8%

Opinions count

56.5%

My work is important

81.5%

Co-workers do quality work

77.4%

Best friend

54.2%

6-month progress talk

53.6%

Growth opportunities past year

78.6%

Source: de Bod, 2009: 4

87

The areas marked in grey in Table 4.3 are all areas that need to be developed. The
questions that were asked for the specific areas can be seen in Table 4.4.

Table 4.4: Linkage between development elements and Q questions


Element
Recognition last 7 days

APL
Score

Gallup Q question

54.8%

In the last seven days, I have received


recognition or praise for doing good work.
Supervisor cares
69.6%
My supervisor, or someone at work, seems to
care about me as a person.
Development encouraged
70.8%
There is someone at work who encourages
my development.
Opinions count
56.5%
At work, my opinions seem to count.
Best friend
54.2%
I have a best friend at work.
6-month progress talk
53.6%
In the last six months, someone at work has
talked to me about my progress.
Source: Adjusted from Flemming and Asplund, 2007: 287; de Bod, 2009: 4

Employee engagement, based on various bodies of knowledge and research, has two
important dimensions:

Personal leadership refers to the personal relationship between an employee and his
direct supervisor. The supervisor provides him with encouragement, guidance and
material to do the job.

Group leadership refers to the functioning of the group as a self-guiding organism.


The leadership relationship is much broader and includes the cohesion with team
members, trust, guidance and involvement of top management and opportunities for
success within the group (de Bod, 2009: 17).

The impact of personal and group leadership on behaviour is depicted in Figure 4.3.

88

Figure 4.3: Impact of personal and group leadership on behaviour


Source: de Bod, 2009: 18

When the position of APL Cartons (Pty) Ltd is plotted on the personal and group
leadership quadrants, it falls in the quadrant of winning team. The position can be seen in
Figure 4.4.

89

Employee Engagement

100.0%

Backstabbers

Winning Team
APL Sample

Group Leadership Camp 2 and Camp 3

75.0%

50.0%

25.0%

0.0%

Band of Brothers

Organisational Terrorists
0%

25%

50%

75%

100%

Personal Leadership Base Camp and Camp 1

Figure 4.4: Employee engagement positioning of APL Cartons (Pty) Ltd


Source: de Bod, 2009: 19

The interpretation of the result is that people in the organisation are bound together, there
is effective leadership through the line and employee engagement exists.

If the 42

individual participants of the questionnaire are plotted on the personal and group
leadership quadrants, the results are as seen in Figure 4.5.

90

Employee Engagement

100%

Winning Team

Backstabbers

Group Leadership Camp 2 and Camp 3

75%

50%

25%

Organisational Terrorists

Band of Brothers

0%
0%

25%

50%

75%

100%

Personal Leadership Base Camp and Camp 1

Figure 4.5: Individual employee engagement results


Source: de Bod, 2009: 23

4.2.4

Interpretation of results

Although the total level of employee engagement at APL Cartons (Pty) Ltd is high, there
are individual employees who participated in the questionnaires who do not fall into the
quadrant of a winning team. There are a few that fall into the quadrant of band of brothers
and one individual that falls into the organisational terrorists quadrant. To ensure that the
maximum number of individuals falls into the quadrant of the winning team, the writer is of
the opinion that the aspects listed in Table 4.4 need to be addressed. This will form part of
the total reward solution for APL Cartons (Pty) Ltd.

4.3

CURRENT TOTAL REWARDS PROPOSITION

The first part of this section will focus on the human resource policy and reference to total
reward aspects.

The second part will summarise findings from focus groups and

interviews with current employees.

91

4.3.1

APL Cartons (Pty) Ltd human resource policy

The human resource policy will be briefly discussed under a few major headings. The
policy document does not focus on total rewards as described in Chapter Three.

It

focuses more on the financial rewards than on the non-financial rewards.

4.3.1.1 Relationship with employees


The organisation strives to ensure that each employee experiences personal growth, job
satisfaction and security in a safe working environment.

Remuneration needs to be

market related. The organisation offers employees who perform above the norm to share
in an incentive remuneration scheme.

The organisation will create the necessary

atmosphere where employees feel free to work creatively at different solutions to problems
and challenges.

The performance of the team and the individual is taken into

consideration when the necessary incentive remuneration scheme is allocated.

The

organisation will assist employees to attain the necessary knowledge and skills through
training and self-development. This will assist employees to develop their careers inside
the organisation (APL Cartons (Pty) Ltd, 2009: 5-6).

4.3.1.2 Manpower provision


The organisation offers a comprehensive induction programme to ensure that new
employees feel part of the organisation and can contribute in full to the achievement of
individual and team goals as soon as possible.

When new employees relocate to

Worcester to join APL Cartons (Pty) Ltd, the organisation pays for the transport of furniture
and vehicles. The organisation also pays an relocation allowance of one twelfth of the
yearly package of the employee (APL Cartons (Pty) Ltd, 2009a: 8-9).

4.3.1.3 Compensation
With reference to compensation, two different categories of employees exist in the
organisation. Monthly paid employees are those who are remunerated on a total cost of
employment principle and whose compensation is compared to salary surveys to
determine if it is market related. Weekly paid staff are those who form part of a bargaining
unit and whose wages and benefits are negotiated by a trade union. Monthly paid staff
can between certain limits structure their compensation package in such a way that it suits
their specific needs (APL Cartons (Pty) Ltd, 2009a: 10).

92

The contents of the compensation offering are summarised in Table 4.5.

Table 4.5: Summary of APL Cartons (Pty) Ltd compensation offering


Compensation

Monthly paid

Weekly paid

element

staff

Staff

Basic salary

Yearly bonus

Determined by deducting all Negotiated with the union


benefits and other cash
remuneration from the total
cost of employment
One months basic salary paid out in November each year.

Dependent on job grade the maximum possible incentive


varies. The more senior the position, the higher the
possible maximum incentive. All personnel participate.
All overtime except Sunday at All overtime after 10 hours
Overtime
1.5 rate of normal basic salary per week and Sunday at
2.0 rate of normal basic
salary
When call out to do emergency maintenance work the
Call-out allowance
person is compensated at a rate of 2 times the normal basic
salary.
For all hours worked between 19:00 and 07:00 a shift
Shift allowance
allowance of 15% of normal basic salary is paid.
When employees sleep away from home for training or
Meal allowance
work, they are compensated depending on the amount of
meals they must purchase.
Between job grade 19 and 10 employees who work in a
Acting allowance
more senior position would receive the difference in
remuneration between the persons permanent position and
the position in which is being acted.
Not applicable
One weeks wage at 10, 15
Long service bonus
and 20 years
Not applicable
Receives the bonus when
Attendance bonus
in work for 40 hours of the
week
Source: APL Cartons (Pty) Ltd, 2009a: 10-16
Incentive remuneration

4.3.1.4 Benefits
The benefits can be divided in two sections, one being leave benefits and the other being
benefits like retirement fund and medical aid.

The leave benefits are summarised in Table 4.6:

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Table 4.6: Summary of leave benefits at APL Cartons (Pty) Ltd


Leave type
Normal leave

Sick leave

Study and
examination leave
Special leave
Family responsibility
leave

Benefit
The amount of normal leave increases at certain seniority
levels. Leave can be capitalised with certain minimum
balances.
The amount of sick leave varies according to seniority and
appointment date. The maximum amount of sick leave is six
months for a three-year cycle and the minimum is 33 days.
The amount of leave to attend training courses and write
exams is uncapped. When writing exams the day of the
exam and the day before is study leave.
Leave to attend a court case for example.
Leave of three days per year to attend to funerals of close
family members or when a child is sick.

Four months maternity leave, which is paid at 66 per cent of


normal pay.
Compulsory weekend Personnel who need to attend to client functions over
weekends or who participate in month end stock taking
leave
receive an additional days leave with every occurrence.
People who are invited to play golf and do not form part of
Golf leave
the marketing team can apply for golf leave.
An employee who qualifies for provincial and national colours
Sporting leave
in a specific sport receives paid sporting leave to attend.
Source: APL Cartons (Pty) Ltd, 2009a: 16-21
Maternity leave

The other benefits are summarised in Table 4.7.

94

Table 4.7: Summary of other benefits at APL Cartons (Pty) Ltd


Benefit type

Retirement fund

Monthly paid

Weekly paid

staff

staff

Part of the total cost of


employment. Can decide
which percentage from 15
till 20 would like to
contribute.
Life and
disability insurance forms
part of the retirement fund.
Individual
investment
choices can be made twice
a year.
Compulsory
scheme.
Contribution forms part of
total cost of employment.

Belongs to the union


retirement funds.
Total
contribution is 10 per cent.
Life and disability insurance
forms part of the retirement
fund.

Compulsory
scheme.
Company subsidise 50 per
of
the
total
cent
contribution.
During working time all employees receive personal
Personal insurance
insurance that would pay out to the family of the
employee in case of death.
The company offers a The same as monthly paid
Housings benefit
housing guarantee if the staff,
except
the
employee has been in organisation also offers an
employment for longer than additional housing subsidy.
three years.
Marketing
people
can Not applicable
Car policy
decide
between
car
allowance, company car or
pool car. Other staff can
claim
back
from
the
company
for
business
expenses.
If an employee must be available to be contacted on a
Cellphone
continuous basis a cell phone is issued to the person. A
person is responsible for paying for private calls.
Source: APL Cartons (Pty) Ltd, 2009a: 21-25
Medical Aid

4.3.1.5 Manpower development


The organisation acknowledges that it is of great benefit to develop employees. For this
reason, the organisation has a study aid scheme. When an application for study aid is
approved the organisation pays all cost involved in studying. This includes the tuition fees,

95

literature cost, and travelling cost and if needed accommodation cost. As long as the
employee is successful, all costs are paid for. If the employee stops studying all costs are
repayable. If the employee is unsuccessful with a subject the employee must pay the cost
for that subject.

The other benefit is attending of courses, conferences and practical

training for which all cost are paid by the organisation (APL Cartons (Pty) Ltd, 2009a: 2526).

4.3.1.6 Summary of APL Cartons (Pty) Ltd human resource policy


APL Cartons (Pty) Ltd offers employees the traditional financial rewards as to be expected
from a medium to bigger organisation. The following section will focus on the feedback
from employees regarding the total rewards experience at APL Cartons (Pty) Ltd.

4.3.2

Focus group results

The following section of this chapter focuses on the results of focus group discussions that
were facilitated by the writer between 26 August 2009 until 22 September 2009.

4.3.2.1 Methodology
The nature of the information to be obtained from employees of APL Cartons (Pty) Ltd
made focus group interviews the most applicable method of information gathering. The
number of people for each focus group was limited to eight people.

The number of

interviews for the different organisational groups in the organisation was as follow:

Production floor

5 interviews

(40 people)

Administration

1 interview

(8 people)

Middle management

2 interviews

(2 people)

Senior management

1 interview

(1 person)

The interviews were all done during the working hours of the people being interviewed.
The managers of the different departments selected the people who were interviewed.
People who attended the group interviews did not necessarily work together but were on
the same production shift. The administration people were from different departments.
All the interviews were recorded and the writer made notes of the answers.

The

recordings have been kept for future reference. Before the questions were asked, the

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employees were introduced to two different total reward models. The models explained
were the WorldatWork and Hay group total reward model. The concept of employee
engagement was also briefly explained. Eight questions were asked. The questions that
were asked were the following:

a)

Why is it good to work at APL Cartons (Pty) Ltd?

b)

Why it is not good to work at APL Cartons (Pty) Ltd?

c)

What needs to change at APL Cartons (Pty) Ltd?

d)

Except for money, is there something you would like to receive or experience from
APL Cartons (Pty) Ltd?

e)

How would you explain the relationship between employees in APL Cartons (Pty)
Ltd?

f)

Is there anything that happens at APL Cartons (Pty) Ltd that you are to ashamed to
tell somebody else?

g)

Visualise a person on his way to work who is happy and looking forward to go to
work.

What do you think the organisation offers the individual to ensure this

behaviour?
h)

Do you know of any other organisations that offer their employees any form of reward
that you feel would be good for APL Cartons (Pty) Ltd to add to their current reward
offering?

All of these questions focus on the employees current experience working for APL
Cartons (Pty) Ltd. The second last question uses the technique of visualising and the last
question uses comparison with other people or organisations they know.

4.3.2.2 Results of the focus group interviews


The average time of the group interviews was 105 minutes. The individual interviews were
on average 50 minutes. The total number of answers for each question is shown in Table
4.8.

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Table 4.8: Number of answers for focus groups questions


Question number

Amount of answers

73

80

64

43

32

26

59

37

Total number of answers

414

Source: Focus group and interview results from Appendix B, 2009

When an answer was given by employees and it needed further exploration, the writer
used the question why or please explain in more detail to ensure that what the employee
meant, was captured. The answers of the employees were in Afrikaans, as this is their
first language. The list of all answers can be studied in Appendix B.

4.3.2.3 Interpretation of results


The technique used to analyse the information is called the scissors and sort technique. It
sorts the different ideas and themes together out of the raw data that was obtained
(Stewart et al., 2006: 116). The total number of different concepts for each question can
be seen in Table 4.9.

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Table 4.9: Number of different concepts for focus groups questions


Question number

Amount of different concepts

28

42

45

27

18

19

30

30

Total number of answers

239

Source: Focus group and interview results from Appendix C, 2009

The writer wanted to ensure that when decisions are made to address the concepts from
focus groups, the most important concepts would be addressed first. For this reason, the
writer sorted the concepts according to the most times they were mentioned in all the
interviews. To identify the most important concepts, the writer identified the concepts
which were characterised by the following criteria:

more than two of the non-production groups mentioned it, or

more than 60 per cent of the production groups mentioned it, or

one group mentioned it more often than the number of groups there were for that
grouping.

If any one of the criteria was realised the concept was marked as important. The list of
concepts is attached as Appendix C.

The concepts with a grey background are the

concepts marked as important.

The most important concepts for each question according to the criteria identified were as
follow:

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a)

Why is it good to work at APL Cartons (Pty) Ltd?

Job security Financially strong even in bad economic times.

Training is good and opportunities to learn are created.

Good successful organisation to work for and is better than our competitors proud
of working here.

Good relationship with fellow employees based on mutual respect and where an
employee is not only a number.

Vouchers, hampers, long service reward and other recognition are appreciated.

Good working environment. Not too formal, clean and very safe.

Flexibility to attend to childrens extramural activities when possible.

b)

Why it is not good to work at APL Cartons (Pty) Ltd?

Conflict exists and is not addressed in the right manner, causing people and
departments to work against each other.

The process to determine the successful candidates for vacant positions or acting is
not consequent and results are not communicated to unsuccessful applicants.

Not all relevant departments take the necessary disciplinary action. Departments are
also not consequent with the steps they do take. This results in insufficient discipline.

Not all operators respect the people on their production line and do not treat them
well, especially if they are family members of other staff.

Supervisors do not set the right examples, treat people differently with regard to
leave approval and sometimes shout at people on the production lines.

Temporary staff on the production lines is problematic, as is the quality of the people
and attitude.

Shift work has a negative effect on the safety of people at home and personnel. You
are not there to protect them.

c)

What needs to change at APL Cartons (Pty) Ltd?

A special area for lockers, cafeteria and toilets must be created outside of the factory.

Tea times must be longer to be able to eat.

The process of disciplinary hearings is not correct and is not confidential.


Disciplinary actions are only in the production area.

Temporary position on machines must be made permanent.

100

d)

Except for money, is there something you would like to receive or experience
from APL Cartons (Pty) Ltd?

Recognition system must be developed to include administrative staff and give more
continuous recognition like vouchers.

More benefits at the end of service The longer a person worked the bigger the
benefit.

The value and workload of each position must be communicated to the rest of the
organisation.

e)

How would you explain the relationship between employees in APL Cartons
(Pty) Ltd?

Team work is good but more so in departments than between.

f)

Is there anything that happens at APL Cartons (Pty) Ltd that you are too
ashamed to tell somebody else?

The low salaries of the special job grade employees.

The smoking area which is outside of the company premises.

g)

If each one can visualise a person on his way to work and this person is so
happy, he/she is looking forward to go to work, he/she cannot wait. What do
you think the organisation offers the individual to ensure this behaviour?

Sufficient remuneration and benefits.

Do not want to disappoint the organisation. It can be because the organisation has
helped him/her.

Employees are friendly towards each other, loyal towards each other and show the
necessary respect.

The organisation has a well known name and the person is proud of it.

h)

Do you know of any other organisations that offer their employees any form of
reward that you feel would be good for APL Cartons (Pty) Ltd to add to their
current reward offering?

Cafeteria to eat lunch and buy meals for supper at home.

101

Free transport to and from the work.

The results under each question must be taken into consideration when a total reward
model is developed for APL Cartons (Pty) Ltd. The aspects under question one, even
those not identified as most important, can be seen as the current value proposition by
current employees. The aspects mentioned with the other questions can be addressed in
a possible new model.

4.4

SUMMARY

APL Cartons (Pty) Ltd is fortunate to have a high level of employee engagement. This is
the result of offering employees an organisation with a reputable name in the industry and
in the local community. All employees experience job security. Sufficient time and money
are spent on developing employees and learning new aspects regarding their work. The
working environment is of such a nature that it contributes to the engagement levels of
employees. Employees are allowed to attend to personal issues during working hours if it
is possible. The organisation recognises the performance by employees through different
rewards on a yearly basis.

If the organisation strives to increase the engagement levels, they need to address specific
aspects. The relationship between supervisors and their subordinates needs to improve.
Supervisors must start to listen to their subordinates and show them they care about them.
Supervisors need to start praising employees when needed and not wait for yearly
rewards. Supervisors must talk with employees regarding their progress in their work and
encourage employees to develop themselves.

The organisation needs to ensure that the following procedures and practices improve:

Process of recruitment

Disciplinary process

Conflict management

These procedures need to be improved and communicated so that all employees are
aware of the contents and the application of it. The human resource function needs to

102

play a critical role.

Currently these aspects have a negative impact regarding the

experience of employees when they work at APL Cartons (Pty) Ltd. The organisation
must also address the current smoking area which is situated outside of the organisation
premises.

Smoking personnel experience this current practice as something they are

ashamed for. The intention of the organisation is good, but it can maybe be addressed
differently. The remuneration received by the job grade, special grade, employees must
be investigated to ensure it is market related. This group of employees, the biggest in the
organisation, is currently ashamed of their income. The use of temporary staff to make
provision for seasonal peaks in workload needs to be investigated, as this is currently a
negative experience.

If the organisation would like to address the aspect that would make APL Cartons (Pty) Ltd
a great place to work for according to the employees they need to increase tea times and
build a cafeteria for their employees. This would result in employees being able to eat a
sufficient meal with enough time available to eat in a clean environment. As some of the
administration staff mentioned, they would also purchase meals for supper from the
cafeteria. This would contribute to better quality time with their children at home during the
evenings. When employees compare themselves with people from other organisations,
the free transport is something they would like APL Cartons (Pty) Ltd to offer them.

It is important to note that before any cost is spent addressing any of the issues, each one
must be evaluated by the return on the investment if possible.

The following chapter will focus on the development of a total reward model for APL
Cartons (Pty) Ltd by using the information in Chapters Three and Four.

103

CHAPTER FIVE
DEVELOPMENT AND IMPLEMENTATION OF
APL CARTONS (PTY) LTD TOTAL REWARDS MODEL

5.1

INTRODUCTION

The aim of this chapter is to develop a total reward model that will ensure APL Cartons
(Pty) Ltd will be in a position to attract, motivate and retain the strategically important skills
necessary.

The total reward model would also ensure that the engagement level of

employees would increase further.

The development of the model will be done by

combining the different total reward models as discussed in chapter three. The most
important aspects from Chapter Four will also be included in the model. Specific issues
that APL Cartons (Pty) Ltd must address when the model is implemented will conclude the
chapter.

5.2

DEVELOPMENT OF NEW TOTAL REWARDS MODEL

5.2.1

Methodology

A list was drawn up with all the sub-elements of the following total reward or engagement
models:

WorldatWork

Hay engaged performance model

The better workforce deal

Towers Perrin

HAD employee engagement matrix

Theo Veldsman people value proposition.

All of these models were discussed in Chapters Two or Three. The sub-elements, which
were duplicated when the models were combined, were deleted from the new list of subelements. The element names used to combine the different sub-elements were changed
to better combine the different sub-elements from the different models. Aspects that form
part of the models but are not currently part of APL Cartons (Pty) Ltd human resource

104

policy and were not identified as important aspects in the focus group discussions were
taken out of the new model.

An example is stock options.

The elements and sub-

elements of the total reward model are combined in a graphical picture to ensure
understanding by all employees.

5.2.2

Contents of the new developed model

The contents of the newly developed model for APL Cartons (Pty) Ltd can be seen in
Table 5.1.

Table 5.1: Elements and sub-elements of APL Cartons (Pty) Ltd total rewards model
COMPENSATION
Base pay
Fairness of reward
Incentive
for
higher
performance
Rewards and recognition
are competitive
JOB RELATED FACTORS
Roles are challenging and
fulfilling
Feeling of achievement
Value
of
work
is
acknowledge
Informal, safe and clean
environment
Equipment is sufficient
Workloads are full but not
excessive
Freedom and autonomy
ENABLING ORGANISATIONAL
ENVIRONMENT
Environment is supportive
and empowering
Open communications
Good organisational values
and behaviours
People focus
High
quality
of
work
relationships
Safe working environment
High level of trust and
commitment
Innovating
and
caring
culture
Work
environment
is
attractive and stimulating
Diverse friendly setting

BENEFITS

Retirement
Leave
Disability and death cover
Health and welfare
Legal required

DEVELOPMENT AND CAREER


OPPORTUNITIES
Personal and career growth
Career management
Learning opportunities exist
Career
leverage
are
competitive
Sufficient
investment
in
people

INSPIRATIONAL
ENVIRONMENT
Reputation
of
the
organisation
Company
growth
and
success
Services
and
products
continue to excite and
challenge
Shared stretch vision and
core values
Win-win over time

CREDIBLE AND INFLUENTIAL


LEADERSHIP
Quality leadership
Competent managers
Coaching and mentoring
Job training
Involvement
and
participation
Sufficient communication
PERFORMANCE &
RECOGNITION
Performance objectives are
clear
Performance is regularly
reviewed
Performance
is
fairly
managed for improvement
Business
performance
management
Recognition and celebration
of performance
WORK-LIFE
Workplace
flexibility
/
Alternative
Supportive environment
Community involvement
Financial support
Paid and unpaid time off
Recognition
of
lifecycle
needs/flexibility
Ongoing
performance
contracting

105

The explanations of the different elements of the total reward model are explained in Table
5.2.

Table 5.2: Explanation of elements of APL Cartons (Pty) Ltd total reward model
Element
Compensation
Benefits
Credible and
influential
leadership
Job related factors

Development and
career
opportunities
Performance and
recognition
Enabling
organisational

Description
It is the pay provided to the employee for services rendered.
Programmes designed to protect the employee and his or her family from
financial risk.
Leaders are the source of important reward such as recognition and
feedback. Leaders need to set the example of behaviour that leads to
success in the organisation. Leaders must ensure they involve employees
in decision-making and communicate sufficiently to ensure maximum
involvement from employees.
The contents of a job needs to be created in such a way it is challenging
but possible for the job holder to experience a feeling of achievement.
The environment and equipment must be of such a nature it would
contribute to the positive experience of the employee.
A set of learning experiences to enhance employees applied skills and
competencies. A plan for employees to advance their own career goals
that may include promotion into a more responsible position in the
organisation.
The performance management programme of the organisation needs to
address individual and organisational performance.
Performance
objectives must be agreed upon and continuous feedback and assistance
to improve must be given.
The internal organisational environment must be of such a nature it
enables employees to commit to the organisation goals and values.

environment
Inspirational
environment
Work-life

5.2.3

The reputation and vision of the organisation leads to employees wanting


to be associated with the organisation and experience a feeling of proud.
It is practices, policies, programmes and a philosophy that actively
supports efforts to help employees achieve success both at work and at
home.

Evaluation of the total reward model for APL Cartons (Pty) Ltd

It is necessary to evaluate the total reward model according to the characteristics of total
reward model approaches as discussed in Table 3.2. The evaluation of the model against
the characteristics is shown in Table 5.3.

106

Table 5.3: Evaluation of APL Cartons (Pty) Ltd model against total reward
characteristics
Characteristic
Holistic

Evaluation
An array of financial and non-financial rewards is offered with
mention on specific aspects necessary to attract, motivate and
retain talent.

Best fit

The total reward model is tailored according to the organisations


culture and work processes

Integrative

Not all rewards are traditional rewards and some are integrated
with human resource policies and practices.

Strategic

Rewards are linked to the strategic direction of the organisation.

People-

It is built on both the organisations strategic direction but also

centered

acknowledges the inputs from employees according to what they


value in the employee and employer relationship.

Customised

It offers some choice.

Total remuneration package can be

structured according to employee needs.


Distinctive

Aspects like the culture of the organisation are very distinctive and
difficult to copy.

Evolutionary

The model is a summary of current benefits with changes from the


inputs of aspects employees value.

Source: Adjusted from Charted Institute of Personnel and Development, 2009

The model does address the different elements from the total reward models as discussed
in Chapter Three. It also takes into consideration the most important aspects that ensure
employee engagement from Chapter Two. The specific element of credible and influential
leadership is specifically part of the model because of the importance of leaders and
supervisors in the increase of employee engagement. Although APL Cartons (Pty) Ltd do
not offer all the contents of the newly developed model it would do so as soon as the
necessary approval is received. It is important though to address the specific issues that
were identified through the engagement questionnaire and focus group discussions and
interviews.

107

The APL Cartons (Pty) Ltd total reward model also addresses the 10 elements identified
by Towers Perrin as identified in Table 3.6. This confirms the model capability of attracting
people to the organisation, retaining them and engaging employees.

The evaluation of the model gives the necessary confidence to proceed with the
implementation of the model.

5.3

IMPLEMENTATION OF TOTAL REWARD MODEL

5.3.1

Branding the total reward model

The employees at APL Cartons (Pty) Ltd do not know the concept of total rewards. To
ensure the holistic understanding of the different parts of the total rewards model it is
necessary to communicate it as a package of rewards. To ensure easy communication it
would be beneficial to brand the model in an applicable name. The concept of different
presents in a box can be used. The box refers to corrugating boxes which is APL Cartons
(Pty) Ltd core business. The seven different presents refer to the elements of the total
reward model. The name can be APL Cartons (Pty) Ltd box of rewards. The box can be
visually displayed as can be seen in Appendix D.

Seventy five per cent of APL Cartons

(Pty) Ltd products are used in the agricultural industry. The shareholders are all fruit
export pack houses. The flaps of the box are the inspirational environment. The inside of
the box is the enabling organisational environment. Inside the box are different types of
fruit which each symbolises an element of reward.

The branding would ensure it is easy to communicate and to understand.

5.3.2

Implementation of total reward model

5.3.2.1 Planning of the implementation process


It is important to plan the course of action that is needed for the implementation of the total
reward model. The specific aspect, which needs to be considered, is:

Consider if APL Cartons (Pty) Ltd normally introduce change slowly or rapidly. A
progressive approach could also be followed where programmes are revamped one
at a time.

108

A reasonable timeline needs to be developed.

Time must be allowed for

management approval and communicating of total rewards model.

The necessary individuals and departments must be determined to implement the


model.

A plan must developed to continue tracking and assessing the model periodically to
ensure that its measures and structure are still relevant (WorldatWork, 2007: 38).

5.3.2.2 Obtaining senior management approval


A convincing case for total rewards needs to be built, and it should be accepted and
supported by management. It is important to identify and communicate to management
the following elements.

The strategic need for total rewards

What the competition is doing

Total rewards philosophy

The new programmes purpose/objectives

Proposed design

Competitive market trends

Implementation schedule and timing of rollout

Key participants

Level of employee involvement

Communication plan to introduce the programme

Evaluation plan.

This would assist in ensuring an presentation would be successful (WorldatWork, 2007:


39).

At APL Cartons (Pty) Ltd, the presentation will be done to the senior management team
and not the board of directors.

The reason for this would be the nature of changes

necessary to implement the concept of total rewards does not need directors approval as
it is in the trading authority of the managing director.

109

5.3.2.3 Forming an implementation team


It is important to involve other employees in the implementation of the total reward model.
This will ensure that the implementation is not seen as another human resource
programme. When key employees are involved in the design and implementation, most
employees look forward to the change. When selecting a team it is important to:

choose employees with broad-based presentation;

define the teams role and support mechanisms;

provide training on what to do and how to do it;

define the role of the human resource department (WorldatWork, 2007: 38).

Part of the approval from senior management can also be the approval of the people who
will be involved in the implementation team. It will be important to ensure representation
on all organisational levels. When explaining the total reward model to the implementation
team it will already be the first feedback from employees regarding the model.

Any

possible changes could lead to a change in the model for which senior management
approval must be asked.

5.3.2.4 Communicating the total reward model


Many human resource aspects are not well understood by employees. Therefore it is
critical to ensure an efficient and effective communication plan to be developed to ensure
employees will understand the new total rewards model.

An effective communication

programme is important, because it:

provides an opportunity for management to share information with employees;

helps set expectations of the total rewards model;

helps employees understand the total value of their compensation package;

conveys commitment to employees;

lets employees know the opportunities available in their organisation (WorldatWork,


2007: 40).

110

The size of the personnel of APL Cartons (Pty) Ltd makes it possible to communicate the
message verbally to all employees. This must however be supported by visual and written
communication. The concept must also be included in the human resource policy.

5.4

INTERVENTIONS NEEDED TO ENSURE SUCCESS OF TOTAL REWARD


MODEL

5.4.1

Total reward model elements which need to be improved

The current reward offering as described in Chapter Four makes it possible to offer the
total rewards as specified by the developed APL Cartons (Pty) Ltd total reward model.
The following aspects, however, need to be addressed urgently, as they will negatively
influence the experience of employees. This will limit the experience of an exchange
relationship from the employee. The specific aspects are discussed in Table 5.4.

Table 5.4: Total reward elements and interventions needed to improve them
Total reward element
Credible and influential
leadership

Performance and

Intervention needs to ensure


The relationship between supervisor and employees needs to
improve. Supervisors must start to listen to the inputs from
employees. They need to show they care about the employees.
Supervisors must motivate employees and give them immediate
recognition when deserved. Supervisors in the development of
employees must show active interest.
Supervisors need to set performance targets with employees.

recognition
Enabling organisational
environment

Compensation

Job related factors

Work-life

The following practices need to be addressed in such a way


that they are seen as fair and just by all employees: process of
recruitment, disciplinary process and conflict management.
The employees are currently ashamed of the smoking area and
alternative arrangements must be made without compromising
safety.
The remuneration of the special job grade employees needs to
be investigated. If it is not market related, the necessary
adjustments must be evaluated. If their remuneration is market
related, it must be communicated to them. The special job
grade is the biggest component of all employees.
The temporary employees used for seasonal peaks must be
limited to the minimum to ensure production lines have
employees with the necessary skills and competencies.
Tea times need to be increased to make it possible to eat
during an eight-hour shift.
The building of a cafeteria where employees can eat lunch and
buy supper needs to be investigated.

111

5.5

SUMMARY

The development of a total reward model for APL Cartons (Pty) Ltd makes it possible to
communicate to current and prospective employees the total value proposition associated
with the organisation. The model was developed by combining the different total reward
models as discussed in academic literature, taking into consideration specific needs of the
employees of APL Cartons (Pty) Ltd. A brief description of the implementation process
was explained. The chapter was concluded by specific interventions needed to ensure the
maximum return on the total rewards model.

112

CHAPTER SIX
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

6.1

SUMMARY OF RESEARCH RESULTS

The world of work has changed during the last decade. Loyalty between employees and
employers has decreased because of different economic pressures. This has resulted in
employers retrenching employees for the sake of profits. The long-term relationship was
replaced with shorter-term relationships where employees would evaluate what they
receive and experience from the relationship. If there were no win in for the employee,
he/she would move to an organisation offering more.

Organisations have spent a lot of money on trying to motivate employees to deliver their
best. A higher level of motivation, engagement, however does not come automatically.
Employers need to identify what it is that will lead to the engagement of their employees.
The drivers of engagement for different employees would not be the same. It is also
important for organisations to determine what character person would fit in better with the
organisation to ensure a higher level of engagement.

The research shows a direct

correlation between employee engagement, customer satisfaction and better financial


results.

To ensure organisations can attract, retain and engage employees they need to move
away from focusing only on the compensation component of rewards. A total reward
approach where all rewards are holistically packaged to ensure the different expectations
and needs of employees is addressed. The flexibility between rewards will ensure that
each employee can experience the value exchange or a better workforce deal. This will
result in the employee giving his heart to the organisation and therefore giving more of his
discretionary effort.

A few of the well-known total reward models were identified. The elements which form the
models were compared with each other to determine all the elements that contribute to
total rewards. This will be used to assist in the development of APL Cartons (Pty) Ltds
own total reward model.

113

Using the Q12 employee engagement questionnaire of Gallup, it was determined that the
current employee engagement level of APL Cartons (Pty) Ltd is labelled as a winning
team.

Although the engagement level is high, there were individuals who were not

engaged.

The focus group and interview results identified the rewards employees

currently value most, as well as specific areas where development or improvement of


rewards is necessary to ensure engagement by all employees.

The specific issues which need to be addressed are the relationship between leaders or
supervisors with their employees. This will increase the employee engagement level of
employees and support the literature that points out that leaders drive the engagement
level of his/her employees. The remuneration for the special grade employees, as well as
the current smoking area, make the employees feel ashamed. This procedure needs to
ensure fairness and consequent behaviour. Other aspects that need to be addressed are
procedures regarding appointments, a disciplinary processes and the way conflict is
managed. The increase of time allowed for breaks and the building of a cafeteria were
important points of discussion from employees and need to be considered.
The inputs from the Q12 employee engagement questionnaire and the focus group and
interviews were used to develop a total reward model for APL Cartons (Pty) Ltd. The
model was evaluated according to the characteristics of total reward models.

The

evaluation delivered enough confidence to suggest that it can be implemented. The model
will ensure that APL Cartons (Pty) Ltd is in a position to attract, retain and engage the
necessary skills to ensure it obtains its business objectives.

6.2

CONCLUSIONS

It will be to the benefit of APL Cartons (Pty) Ltd to increase the level of employee
engagement. One of the most important contributions could be the implementation of a
total reward model. The development of a model specifically for APL Cartons (Pty) Ltd
addressed the main problem and objective of the research. The subordinate problems of
determining the current level of employee engagement as well as determining the current
total reward offering were also addressed.

114

6.3

RECOMMENDATIONS

It is recommended that the newly developed model for APL Cartons (Pty) Ltd be
implemented as soon as possible. Sufficient time and resources must be allocated to
explain the model to all employees in the organisation. The specific issues identified
during the focus group discussions and interviews, as well as the Q12 questionnaire, can
then be further explored to determine specific needs and discuss possible solutions. This
could be used to improve the total rewards model.

115

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122

Appendix A: Employee engagement item questionnaire


EMPLOYEE ENGAGEMENT QUESTIONNAIRE
Job Grade
Shift worker

No.
1

Question
I know what is expected of me at work.

I have the materials and equipment I need to do my work right.

At work, I have the opportunity to do what I do best every day.


In the last seven days, I have received recognition or praise
for doing good work.
My supervisor, or someone at work, seems to care about me
as a person.

4
5

1-6
Yes

7-9
No

10-13

14-99

Not true

Rarely
true

Sometimes
true

Mostly
true

There is someone at work who encourages my development.


At work, my opinions seem to count.
The mission or purpose of my company makes me feel my job
is important.
8
My associates or fellow employees are committed to doing
quality work.
9
I have a best friend at work.
10
In the last six months, someone at work has talked to me
about my progress.
11
In the last year, I have had opportunities at work to learn and
grow.
12
Copyright 2000 Gallup, Inc
6
7

Source: Flemming and Asplund, 2007: 286

Always
true

123

Appendix B: All 414 answers from the focus group discussions

FOCUS GROUP INTERVIEWS


Interview comments
Question 1. Why is it good to work at APL Cartons?
Elke dag bestaan daar kompetisie en nuwe uitdagings by die werk. Werk
is interessant en uitdagend.
Selfs in resessie tyd het ons altyd genoeg werk.
Voel soos familie wat saam werk op masjien.
Goeie sekuriteit selfs in die moeilike ekonomiese tyd.
APL is baie suksesvol. Tegnologie brei uit. Sukses stop nie by spesifieke
punt nie.
Elke dag word iets nuuts aangeleer. Kry geleentheid om met mens se o
te steel in ander afdelings.
Beter as ons mededingers.

Date

Area

02/09/2009
02/09/2009
02/09/2009
02/09/2009

Produksie
Produksie
Produksie
Produksie

02/09/2009

Produksie

02/09/2009
02/09/2009

Produksie
Produksie

Binne departemente bestaan die beginsel van "each one teach one".

02/09/2009

Produksie

APL begin om op alle vlakke mense met kwalifikasies aan te stel.


Die "incentives, spurvouchers" en "hampers" is baie goed.
Sien topbestuur daagliks in plaas van ander fabrieke waar mense hulle
glad nie sien nie.
20 jaar toekennings was baie goed.
Raving fans opleiding is baie goed en kan ook gebruik word buite die
werk.

02/09/2009
02/09/2009

Produksie
Produksie

02/09/2009
02/09/2009

Produksie
Produksie

02/09/2009

Produksie

Om veiligheid te verseker is sommige outokratiese besluite goed geneem.


Aangename informele atmosfeer. Nie meneer ens. nie.
Goeie werksomstandighede.

02/09/2009
03/09/2009
03/09/2009

Produksie
Admin
Admin

Geen spanning oor more nog inkomste het nie. Sal altyd daar wees.
Nie te groot dat slegs nommer is nie. Soos familie.
Maatskappy doen goed. As met kompetisie praat dan is ander jaloers as
hulle hoor mens werk by APL.
Die departementshoofde en afdelingshoofde is baie verstaanbaar en
akkomoderend as dit kom by persoonlike probleme.
Maatskappy bied baie ekstras' aan. "Hampers, Vouchers" ens.
Daaglikse werk is uitdagend.
Ons is beter as kompetisie.
Bevorderings geleenthede.
Maatskappy is sterk finansiel en salaris is veilig.
Goeie kwaliteit produk en uitsekende diens word.
Lae personeelomset wat aandui personeel is baie gelukkig.
Direkte hoof wat jou vertrou, motiveer en aanspoor.
Goeie geleenthede vir self-ontwikkeling.
Die werksure is nie te veel nie.
APL voorsien 'n beter kwaliteit produk as mededingers.
Ten spyte van die resessie vaar APL nog steeds goed.
Almal is altyd besig om mekaar aan te moedig.
Dit is lekker om in 'n skoon fabriek te werk.
Werk saam met 'n lekker groep mense.

03/09/2009
03/09/2009

Admin
Admin

03/09/2009

Admin

03/09/2009
03/09/2009
10/9/2009
10/9/2009
10/9/2009
14/09/2009
14/09/2009
14/09/2009
17/09/2009
17/09/2009
26/08/2009
26/08/2009
26/08/2009(1)
26/08/2009(1)
26/08/2009(1)
26/08/2009(1)

Admin
Admin
Produksie
Produksie
Produksie
M/B
M/B
M/B
M/B
M/B
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie

124

Daar is genoeg geleenthede om vorentoe te kan gaan.


Mens kan elke dag iets nuuts leer.
Daar is genoegsame geleenthede om nuwe kennis op te doen.
Gedurende die resessie tyd het mense nooit gevrees of mense nog die
volgende dag 'n werk met inkomste gaan h nie.
Spesiale posgraad verdien min geld maar daar is sekuriteit.
Mense op die masjiene is baie bereidwillig om mens te leer.
Maatskappy het 'n passie vir mense.
Goeie standaard produk.
Netjiese werksomgewing.
Daar is altyd werk.
Atmosfeer bestaan van wedersydse respek vir mekaar.
Lekker om te werk.
Maatskappy help soms met probleme en dit bly vertroulik.
Kommunikasie en menseverhoudinge is baie goed.
Dit is die veiligste maatskappy om voor te werk.
Baie opleiding.
Baie "rewards" incentives.
Tydens vloervergaderings word daar erkenning gegee.
Mense wat hier werk doen meer as wat van hulle verwag word.

26/08/2009(1)
26/08/2009(1)
26/08/2009(1)

Produksie
Produksie
Produksie

26/08/2009(1)
26/08/2009(1)
26/08/2009(1)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
27/08/2009
27/08/2009
27/08/2009
27/08/2009

Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie

Gevestigde maatskappy wat nog more hier gaan wees.


Staan sterk teenoor die groter mededingers.
Ten spyte van die resessie het ons nog genoeg werk.
Trots om vir APL te kan werk.
Goeie bestuur en leierskap.

27/08/2009
27/08/2009
27/08/2009
27/08/2009
27/08/2009

Produksie
Produksie
Produksie
Produksie
Produksie

Erkenning - Hampers wat huis toe gaan om vir families dankie te s.


Toerusting en personeel wat transformasie ondergaan het vir die
positiewe.
Die standaard bly voortdurend lig.
APL help die hele gemeenskap. Donasies, skenkings ens.
Probeer om sover moontlik nie te meganiseer nie.
Vroue operateurs wat gewerk het. Waardering vir die werk wat gedoen
word.
Goeie waardes van maatskappy.
Goeie verhoudinge met mede-kollegas.
Sekuriteit - 42% aandeelhouers volumes.
Omgewing waar mpy gele is - platteland (kwaliteit gesinslewe).
Goeie vergoeding.
Daaglikse interaksie met alle dissiplines in maatskappy.
Buigsaamheid om in werkstyd buitemuurse aktiwiteite van kinders te kan
bywoon wanneer moontlik.
Geleenthede geskep vir opleiding.
Question 2. Why it is not good to work at APL Cartons?
Nie konsekwentheid by aanstellings en waarneming nie. Vriende of familie
kry voorkeur.
Dit gebeur dat persoon lank in 'n pos waarneem maar nie eers na
onderhoud genooi word nie.

27/08/2009

Produksie

27/08/2009
27/08/2009
27/08/2009
27/08/2009

Produksie
Produksie
Produksie
Produksie

27/08/2009
22/09/2009
22/09/2009
22/09/2009
22/09/2009
22/09/2009
22/09/2009

Produksie
S/B
S/B
S/B
S/B
S/B
S/B

22/09/2009
22/09/2009

S/B
S/B

02/09/2009

Produksie

02/09/2009

Produksie

Aansoeker kry nie terugvoer wanneer onsuksesvol is vir posisie nie.


Persone in hor posisies groet nie altyd mense op die produksievloer nie.
Dit veroorsaak dat mense negatief raak.

02/09/2009

Produksie

02/09/2009

Produksie

125

Geen konsekwentheid as dit kom by dissiplinre optrede nie.


Operateur het nie respek vir homself nie dan het hy ook nie respek vir ons
op die masjien nie.
Daar is nie genoegsame dissipliene in die maatskappy nie.
Familie lid wat na ander skof gaan word daar nie regverdig behandel nie
as gevolg van familie verbintenis.
Die rookbeleid is outokraties verander.

02/09/2009

Produksie

02/09/2009
02/09/2009

Produksie
Produksie

02/09/2009
02/09/2009

Produksie
Produksie

02/09/2009
02/09/2009

Produksie
Produksie

02/09/2009

Produksie

03/09/2009

Admin

Foute herhaal hulleself te veel. Daar word nie uit foute uit geleer nie.
Mens moet die hele tyd ander opvolg om goed te doen.

03/09/2009
03/09/2009

Admin
Admin

Bestaan 'n gebrek aan eienaarskap by ander vir dit wat hulle moet doen.
Altyd iemand anders se fout. Nooit mens se eie fout nie.
Die blaam word heeltyd verskuif.
Probleme met mense word nie direk uitgepraat nie. Hoor altyd eers by
ander en soms eers by bestuurder.
Geneig om konfrontasie te vermy en probleme eers met bestuurder te
bespreek en dan is konfrontasie erger.
Word baie dikwel oor reageer wanneer daar probleme is.
Daar is neiging om iemand te "label" en maak nie saak wat daarna gebeur
nie die "label" bly.
Mense begin baie negatief in plaas van positief wees.

03/09/2009
03/09/2009
03/09/2009

Admin
Admin
Admin

03/09/2009

Admin

03/09/2009
03/09/2009

Admin
Admin

03/09/2009
03/09/2009

Admin
Admin

Daar bestaan nie konsekwentheid ten opsigte van apsekte soos tyd af nie.
Teetyd is te kort.
Konflik tussen kollega's seniors.
Verdeeldheid tussen verskillende afdelings.
Bevorderings neem lank by produksie.
Met nuwe werkstukke moet R&D dit eerder kom afteken.
Samewerking tussen verskillende afdelings is nie goed nie.

03/09/2009
10/9/2009
10/9/2009
10/9/2009
10/9/2009
10/9/2009
10/9/2009

Admin
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie

Daar is nie altyd konsekwente toepassing van toestaan van verlof nie.
Voorman stry oor verlof en gee dit nie sonder geldige redes.
Mense word tydens aanstellings voorgetrek.

10/9/2009
10/9/2009
10/9/2009

Produksie
Produksie
Produksie

Die arbeidsmakelaar se mense kry soms voorkeur behandeling. As hulle


weier om iets te doen word aangespreek. Indien die makelaar se mense
weier en dit is 'n vriend gebeur daar niks.
Baie swak kommunikasiekanale.
Mense, afdelings en departemente werk teen mekaar.
Daar is persone wat betaal word vir spesifieke verantwoordeliheid maar
nie die verantwoordeliheid neem nie.

10/9/2009
14/09/2009
14/09/2009

Produksie
M/B
M/B

14/09/2009

M/B

14/09/2009
17/09/2009
17/09/2009

M/B
M/B
M/B

17/09/2009
17/09/2009

M/B
M/B

Poste word soms onnodig geskep wat geldelike verlies veroorsaak.


Hierdie poste leef ook nie altyd op na die verwagte uitsette.
Daar word nie altyd by besluite gebly nie.
ISO word toegepas maar die voorbeeld wat die toesighouers stel is baie
swak.
Wanneer daar in werksverband probleme is kry mens nie altyd
ondersteuning om dit op te los nie.

Te veel le beloftes word gemaak na klinte en ook na werknemers.


Besluitneming van bestuur wat kort-kort verander.
Bestuurslede wat nie vertroue in bemarking het nie.
Inmenging van ander departemente in bemarking se area van
verantwoordelikheid.
Kantooropset verander dat meer privaat is.

126

Personeel is nie opreg teenoor mekaar nie "back stabbing".


Spesiale posgraad se vergoeding is te min.
Die taxi's wat ons vervoer is gereeld laat en onbetroubaar.
Daar bestaan nie altyd vryheid om jou taak te doen op die wyse wat jy wil
nie.
Soms daag mens op vir werk en die masjien is stukkend of daar is geen
werk nie.

17/09/2009
26/08/2009(1)
26/08/2009(1)

M/B
Produksie
Produksie

26/08/2009(1)

Produksie

26/08/2009(1)

Produksie

Weet nie altyd wat bevorderings geleenthede daar vir mens is nie.
Wanner poste geadverteer is, is dit reeds gevul aangesien sommige
mense voorgetrek word.
Daar begin elke dag nuwe mense te werk by die arbeidsmakelaar.
Daar is daagliks 'n tekort aan mense en die operateur vul dit nie.
Behuingshulp kan voorsien word.

26/08/2009(1)

Produksie

26/08/2009(1)
26/08/2009(1)
26/08/2009(2)
26/08/2009(2)

Produksie
Produksie
Produksie
Produksie

Daar bestaan nie tans formele afskeid nie. Familie word nie betrek nie.
Die nuwer mense groei verby die ouers mense.
Daar is nie genoeg loopbaan bevorderings geleenthede nie.
Die mense in verskillende poste is jaloers op mekaar. Operateur en setter
poste.
Die posgraad van setter kan nie reg wees nie.

26/08/2009(2)
26/08/2009(2)
26/08/2009(2)

Produksie
Produksie
Produksie

26/08/2009(2)
26/08/2009(2)

Produksie
Produksie

Daar is nie konsekwente optrede as dit kom by dissiplinre optrede nie.


Aanstellings vind nie altyd regverdig plaas nie.
Aftree ouderdom van almal is nie dieselfde nie.
Spesiale posgraad verdien te min geld.
Daar is slegs een vakbond by wie mens kan aansluit.
Te min teetyd.
Kamara stelsel. Skep indruk van geen vertroue nie.
Familie wat hier werk word op ander skofte benadeel oor jaloesie.
Telkaarte kan nie lekker deur die operateurs gedoen word nie.
Sekere opleiding is slegs vir operateurs.
Die taxi's is laat, onveilig of drywer is onder die invloed.

26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)

Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie

Nie lekker om nagskof te werk nie. 23-7 en gesin is by die huis.


Hartseer om kind by die huis te los as nagskof werk. Nie daar om hulle te
beskerm nie.
Vrees van vrou dat hy seerkry as gaan werk. Taxi en op roete. Vrees van
hom dat hulle gaan seerkry by huis.
Baie koud in die nag. Sement en deure van fabriek wat oop is.
Somer is dit baie warm in fabriek.
Die fisiese werkslading op die masjiene is baie.
Skofbestuurders is soms geneig om ons uit te skel.
Sommige van deeltydse werkers is nie bedoel om hier te werk nie. Pas
nie lekker in die fisiese omgewing in nie.
Wedywering tussen afdelings/persone.
Outokratiese bestuurstyl soms.
Onwilligheid tussen sommige persone om saam te werk.
Min respek van middelbestuur vir bestuur uitsonderings.
Question 3. What need to change at APL Cartons?
Familie lede moet geskuif word weg van mekaar af om sodoende nie
bevoordeel te word nie.
Die aanleg moet fisies groter word. Alles is op 'n knop en nrens is
genoeg spasie nie.

27/08/2009

Produksie

27/08/2009

Produksie

27/08/2009
27/08/2009
27/08/2009
27/08/2009
27/08/2009

Produksie
Produksie
Produksie
Produksie
Produksie

27/08/2009
22/09/2009
22/09/2009
22/09/2009
22/09/2009

Produksie
S/B
S/B
S/B
S/B

02/09/2009

Produksie

02/09/2009

Produksie

127

Die "lockers", kafeteria, toilet en groenarea moet buite die fabriek geskep
word.
Tee breuke moet dalk aaneenlopend geneem word en mense moet
wissel. Moet egter konsekwent wees.
Die huidige tee breuke is te kort en moet langer wees.
Die tyd wat rokers gaan rook is onregverdig teenoor nie rokers.
Masjienerie moet gereeld verander om sodoende gereed te wees vir nuwe
uitdagings vanaf klinte.
Die stoorarea moet nader kom aan die produksie area om sodoende geld
te spaar.
Die bestuur moet meer meng met produksievloer mense om sodoende vir
ons beter te leer ken.
Mense moet bewus gemaak word van beleide en kodes wanneer iemand
begin werk.

02/09/2009

Produksie

02/09/2009
02/09/2009
02/09/2009

Produksie
Produksie
Produksie

02/09/2009

Produksie

02/09/2009

Produksie

02/09/2009

Produksie

02/09/2009

Produksie

Tydens vloervergaderings moet een uit elke afdeling kom vertel watter
veranderinge en nuwe dinge is daar wat in daardie afdeling
gemplementeer was.

02/09/2009

Produksie

Ongemaklik met die wyse waarop dissiplinre verhore gehou word.


Privaatheid ten opsigte van verhore moet herstel word.

02/09/2009
02/09/2009

Produksie
Produksie

Daar vind geen dissiplinre verhoor behalwe in die produksie vloer nie.
Mense moet aangewend word waarvoor hulle aangestel is.
Die fabrieksmense moet meer uniforms kry as mense in ander afdelings
aangesien hulle aan meer skade blootgestel word.
Daar is nie voldoende kommunikasie van buite af na fabriek buite kantoor
ure nie.
Die taxi fooie moet gesubsidieer word.
Gewone verlof word te veel geweier.
n Baadjie vir 15 jaar diens is nie voldoende nie.
Die doel van studieverlof moet wees dat mense uitgerus is wanneer hulle
eksamen gaan skryf.

02/09/2009
02/09/2009

Produksie
Produksie

02/09/2009

Produksie

02/09/2009
02/09/2009
02/09/2009
02/09/2009

Produksie
Produksie
Produksie
Produksie

02/09/2009

Produksie

Winsdeel moet oor daaglikse "targets" beskik en weekliks uitbetaal.

02/09/2009

Produksie

Mense se gesindhede moet meer positief wees en nie kla oor werk nie.
Mense moet begin eienaarskap neem.
Topbestuur neem te vinnig besluite met radikale gevolge en groot impak.
Te impulsief.
Die vryheid binne poste moet ingeperk word. Strenger riglyne waarbinne
moet beweeg en besluite neem.

03/09/2009
03/09/2009

Admin
Admin

03/09/2009

Admin

03/09/2009

Admin

Almal moet begin saamwerk en sodoende sal produksie beter wees.


Daar moet nie vingers gewys word nie.
Erkenning moet aan die regte mense gegee word.
Kort 'n kafeteria om in skoonomgewing te kan eet.

03/09/2009
03/09/2009
03/09/2009
10/9/2009

Admin
Admin
Admin
Produksie

Daar moet gekyk word na die spesial posgraad mense se vergoeding.


Kan moontlik elke 2de jaar as 'n standaard posgraderings doen.

10/9/2009
10/9/2009

Produksie
Produksie

Die klokke wat die begin en einde van tee tye aandui moet herstel word.
Kan nie lekker hoor wat oor die interkom ges word nie.
Daar is mense wat dooie hout is in die maatskappy en geen waarde
toevoeg tot die maatskappy nie.

10/9/2009
10/9/2009

Produksie
Produksie

14/09/2009

M/B

Elke bestuurder moet fokus op sy eie area van verantwoordelikheid.

17/09/2009

M/B

128

Ander moet vertroue in bemarking h en saam met hulle werk, nie teen
hulle nie.
Ondersteuning van almal in die maatskappy.
Die laboratorium moet verander. Beste toerusting moet aangekoop word.
Moet ook groter gemaak word.

17/09/2009
17/09/2009

M/B
M/B

26/08/2009(1)

Produksie

Ons eetarea. Dit is nie aanbaar nie. Baie stof.


Die rye by die klokstelsel is te lank. Meer klokpunte.

26/08/2009(1)
26/08/2009(1)

Produksie
Produksie

Kafeteria moet begin word.


Tee tye moet langer wees sodat ons kan eet. Dalk langer werk en
middagete bysit.
Weer begin om lenings toe te staan.
Hulp aanbied met die aankoop en verkryging van huise.
Telkaarte moet verander. Sit eerder vaste bedrag per span.
Meer spanbou hou sodat ons 'n eenheid kan vorm.

26/08/2009(1)

Produksie

26/08/2009(1)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)

Produksie
Produksie
Produksie
Produksie
Produksie

Die nie peramente poste op masjien moet permanent gemaak word.


Voortdurende die produkte bly verbeter.
Mense moet geleer word hoe om oor die algemeen verhoudings te
verbeter.
Mense moet in mekaar begin glo.
Kommunikasie oor verwagtinge moet verbeter.
Almal moet regverdig en konsekwent behandel word aangesien sekere
mense voorgetrek word.
Ordenklike eetplek wat skoon is en sonder stof.

26/08/2009(2)
26/08/2009(2)

Produksie
Produksie

26/08/2009(2)
26/08/2009(2)
26/08/2009(2)

Produksie
Produksie
Produksie

27/08/2009
27/08/2009

Produksie
Produksie

Te min tyd vir ete en tee - Gee vir ons meer geld en trek teetyd af.
Permanente crews. Elke dag werk ons met ander mense en het nie altyd
die tyd om hulle opleiding te gee nie.

27/08/2009

Produksie

27/08/2009

Produksie

Die tyd wat skofte begin moet anders wees in die winter as in die somer.
Impakstudie van die steenkoolgas in die lug moet gedoen word.
Vergoeding moet regverdig wees.
Spesiale posgraad se vergoeding is net genoeg om van te lewe.

27/08/2009
27/08/2009
27/08/2009
27/08/2009

Produksie
Produksie
Produksie
Produksie

Weg beweeg wod vanaf Capacity mense na APL tydelike personeel.


Strenger toepassing van beleide.
Effektiewe aanspreek en voorkoming van herhalende afwykings.
Groter werkslojaliteit by almal - bereid om die ekstra myl te stap.
Question 4. Except for money, is there something you would like to
receive or experience from APL Cartons?
Meer voordele by beindiging van diens. Hoe langer iemand gewerk het
hoe meer gaan uitbetaal.
Behuingshulp en bystand met bou projekte.
Sportdag of indoor cricket tussen die drie skofte.
Behoefte aan meer formele afsluiting of sportdag.

27/08/2009
22/09/2009
22/09/2009
22/09/2009

Produksie
S/B
S/B
S/B

02/09/2009
02/09/2009
02/09/2009
02/09/2009

Produksie
Produksie
Produksie
Produksie

Sal meer ure insit na-ure en naweke indien die tyd weer in week afkry.
Meer erkenning moet gegee word in afdelings buite produksie.
Te veel kennis is opgesluit in een of twee individue. Hulle kennis kan nie
sommer vervang word nie.
Mens se posisie word nie na waarde geag nie.
Daar moet meer erkenning gegee word aan admin personeel. Ook ten
opsigte van vergoeding.
Die "make them fly" werk nie vir admin personeel nie.
Min mense buite die afdeling weet van die ekstra werk wat mens doen.
Nie indien mens vertel daarvan nie.

03/09/2009
03/09/2009

Admin
Admin

03/09/2009
03/09/2009

Admin
Admin

03/09/2009
03/09/2009

Admin
Admin

03/09/2009

Admin

129

Elke afdeling moet dalk 'n "make them fly" toeken.


Ander erkennings stelsel moet ontwikkel word buite produksie.

03/09/2009
03/09/2009

Admin
Admin

Moontlik kan daar een keer per maand geskenkbewyse uitgedeel word.
Meer kursusse verskaf word vir loopbaan ontwikkeling. Nie vir huidige
pos nie.
Daar is baie opleidings geleenthede maar die vermo om dit uit te leef
word beperk meer geleentheid moet gegee word vir praktiese
blootstelling.
Bestuurstyl van die maatskappy is baie outokraties moet meer
deelnemend wees.

10/9/2009

Produksie

10/9/2009

Produksie

14/09/2009

M/B

14/09/2009

M/B

Mense moet meer vra wat kan hulle bydra en nie wat kan hulle kry nie.
Sal graag meer wil weet hoe dit met die maatskappy gaan en wat die
strategie van die maatskappy is.
Opregtheid en samehorigheid.
Eie inhuise medieseskema vir alle personeellede omdat almal nie medies
kan bekostig nie.
Die APL klere moet gesubsidieer word. Goedkoper wees.
Meer erkenning moet uitgedeel word. Geskenkbewyse ens.
Daar moet meer kompetisies wees. Iets waarvoor werk. Targets ens.
Werknemers se kinders help met studies.
Moslem en ander gelowe respekteer.
Mense afgee om persoonlike dinge te gaan doen.
Moet die MD meer gereeld sien. Gesels maar kan ook skryf.
Tydens aftrede meer bied sodat goed kan aftree.
Ook meer bied by diensbeinding.
Nie alle siekbriewe moet na die suster gaan vir evaluasie nie.
Plek vir teetyd en genoegsame teetyd.
Help om behuising te bekom.
Verder groei en ook ander takke in ander provinsies begin.

14/09/2009

M/B

14/09/2009
17/09/2009

M/B
M/B

26/08/2009(1)
26/08/2009(1)
26/08/2009(1)
26/08/2009(1)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
27/08/2009
27/08/2009

Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie

OTM op perseel sodat nie hoef te betaal vir taxi om te gaan geld trek nie.
Bywoningstoelaag is te min want deur mense wat hier is, groei die
maatskappy.
Die groenare is te oop en nie lekker om te eet nie.
Rook area moet gebou word wat buite sig is en meer privaat.
Dagsorg en vervoer vir kinders wat gesubsidieer word.
Lenings weer begin toestaan vir spesifieke kriteria.
Sekere tye spesifiek vasmaak vir uitreik van beskermde klere, soos
byvoorbeeld net voor winter.
Die verskaffer van die klere moet nie elke jaar gewissel word nie.
Voordele by mpy bo verwagting.
Question 5. How would you explain the relationship between
employees in APL Cartons?
Nogals goed. Spanwerk is goed.
Met die "raving fan" konsep raak dit net nog beter.
Almal praat karton taal en nie ander tale nie.
Opleiding is baie goed.
Voor "raving fans" was mense baie opvliend. Gaan nou baie beter en
word ook by die huis toegepas.
Die verhoudinge is baie platonies. Een dimensioneel. Nie op vriendskap
basis nie.

27/08/2009

Produksie

27/08/2009
27/08/2009
27/08/2009
27/08/2009
27/08/2009

Produksie
Produksie
Produksie
Produksie
Produksie

27/08/2009
27/08/2009
22/09/2009

Produksie
Produksie
S/B

02/09/2009
02/09/2009
02/09/2009
02/09/2009

Produksie
Produksie
Produksie
Produksie

02/09/2009

Produksie

03/09/2009

Admin

Sommige mense is baie vriendelik maar stap dan uit en skinder oor mens.

03/09/2009

Admin

130

Soms ontstaan daar vriendskappe, maar nie te veel nie.


Mense wat op dieselfde vlak werk kom oor die algemeen goed oor die
weg.
Mense binne afdelings kom ook oor die weg.

03/09/2009

Admin

03/09/2009
03/09/2009

Admin
Admin

Daar is sommige mense wat baie bombasties is en mens wegstoot.

03/09/2009

Admin

60% van mense kan egter goeie verhoudinge aanknoop.


Verhoudinge met kollega's het baie verbeter na Raving Fans.
Almal pas ongelukkig nie Raving Fans toe nie.
Verhoudinge met kollega's is oor die algemeen baie goed. Mense sal
weet waar hulle met my staan.

03/09/2009
10/9/2009
10/9/2009

Admin
Produksie
Produksie

14/09/2009

M/B

Gemiddelde verhouding met kollega's. Baie konflik met sekere afdelings.


Mense stry ongelukkig baie met mekaar.
Mense skinder ook baie van mekaar.
Die vurkhyser personeel is nie na wense nie.
Induksie moet beter wees sodat mense makliker kan begin werk op die
regte standaard.
Daar moet meer Kwaga's gehou word wanneer daar probleme is.
Die pitstop voor 'n skof moet weer gehou word.
Tyd is te kort, mens leef verby mekaar.
Meeste verhoudinge is op 'n volwasse vlak.
Ongelukkig luister ons nie altyd vir mekaar nie.
Ons is nie altyd deelnemendheid.
Voel tuis by APL Cartons.
Gemaklik om op een skof te werk.
Gebeur ongelukkig soms goed wat mens ongelukkig maak.
Skofbestuurders is nie altyd tegemoetkomend as dit kom met ruiling vir
skofte nie.
Die verhoudinge tussen skofte is nie altyd goed nie. Op ander skofte word
mens anders hanteer.
Oor die algemeen goed, maar daar is egter wel enkele voorvalle van
persoonlike verskille of voorkeure waar individue nie oor die weg kom nie.
Question 6. Is there anything that happens at APL Cartons that you
are ashamed to tell somebody else?
Dinge wat mense gesels oor veral vrouens wat skoonmaak.
Die salarisse van die spesiale posgraad is groot probleem.
Mense wat buitekant rook lyk nie goed nie. Skep slegte indruk.
Veiligheid verbonde aan buite rook is nie goed nie.
Skaam om soms aan die ontwerp op 'n boks te werk wat ander vir jou gee
en dit is nie mooi nie.
Weet nie altyd van poste wat geadverteer is nie.
Indien daar baie poste binne afdeling adverteer word dan dink hulle daar
is fout.
Mens kry die gevoel dat donasies nie vir almal is nie maar slegs vir sekere
gemeenskappe, kerke, skole ens.
Soms kom mens by sekere sport geleenthede en dan is daar nie enige
APL bokse nie.
Na-ure wanneer mens in ander se geselskap is en 'n kollega praat sleg
oor APL.
Niks waaroor skaam nie.

17/09/2009
26/08/2009(1)
26/08/2009(1)
26/08/2009(1)

M/B
Produksie
Produksie
Produksie

26/08/2009(1)
26/08/2009(1)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
27/08/2009
27/08/2009
27/08/2009

Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie

27/08/2009

Produksie

27/08/2009

Produksie

22/09/2009

S/B

02/09/2009
02/09/2009
02/09/2009
02/09/2009

Produksie
Produksie
Produksie
Produksie

03/09/2009
03/09/2009

Admin
Admin

03/09/2009

Admin

03/09/2009

Admin

03/09/2009

Admin

03/09/2009
14/09/2009

Admin
M/B

17/09/2009

M/B

Dat ons nie as span funksioneer nie maar elkeen probeer vir hom of
haarself die beste doen. Afdelings probeer mekaar eerder uitvang en sleg
s as om saam te werk.

131

Slegs 10 min breuke wat ons het.


Ink vingers wat mens nie kan skoonkry nie. Ons word op straat uitgeken
dat ons by APL werk.
Soos familie besigheid kom aanstellings.
Mense op spesiale posgraad hulle salaris aan ander moet vertel.
Spesiale posgraad wat nie op alle opleiding kan gaan nie.
Rook area wat buite in die straat is.
Promosie klere se prys is te hoog.
Skinder te veel oor ander.
Mense wat steel of stand van diefstal.
Daar nie genoegsame konfidensialiteit met siekbriewe is nie.
Vuil inkhande wat nie skoongemaak kan word nie.
Skoonmaak van mense. Geen storte ens.
Elte op mens se voete as gevolg van veiligheid skoene.
Spesiale posgraad is skaam oor hulle lae vergoeding.

26/08/2009(1)

Produksie

26/08/2009(1)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
27/08/2009
27/08/2009
27/08/2009
27/08/2009
27/08/2009

Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie

Question 7. If each one can visualise a person on his way to work


and this person is so happy, he/she is looking forward to go to work,
he/she cannot wait. What do you think the organisation offers the
individual to ensure this behavior?
Daar bestaan 'n gees van vriendskap.

02/09/2009

Produksie

Groot verantwoordeliheid vir huis gesin. Lief geraak vir dit wat hy doen.
Wil graag nooit die maatskappy in die steek laat nie.
Geld moet genoeg wees en byvoordele ook.
Die persoon is dankbaar hy het werk.

02/09/2009
02/09/2009
02/09/2009
02/09/2009

Produksie
Produksie
Produksie
Produksie

Die maatskappy het dalk groot klip vir die persoon uit die pad uit gerol.
Sy geestelike lewe speel belangrike rol vir hom. Hy staan op met 'n lied in
sy hart.

02/09/2009

Produksie

02/09/2009

Produksie

Het in sy agterkop bevordering.

02/09/2009

Produksie

Dit is 'n persoon met wie dit dalk net goed gaan. Sy hart pomp sjokolade.
Die maatskappy het die persoon help ontwikkel en geleer om sy werk te
doen en sodoende nie hoef te ontslaan nie.
Die inhoud van die pos moet die persoon regtig van hou.
Daar is 'n balans tussen die werk en privaat lewe.
Alles op 'n vergoedingsmodel moet aangespreek wees.
Omgewing waarin werk moet lekker wees.
Alle hulpmiddele moet reg wees. Rekenaars ens.
Probleme word nie net vir ander gelos nie. Eienaarskap word opgeneem.
Fokus is om ander gelukkig te maak en nie self nie.
Almal is vriendelik teenoor mekaar.
Daar is groot lojaliteit teenoor die werknemers.
Spanwerk is uitstekend.
Almal het respek vir mekaar.
Netheid, stiptelikheid en eerlikheid.
Daar is 'n doel vir elkeen, visie vir elke persoon.
Die taak wat gedoen moet word, is baie uitdagend.
Dankbaarheid en blydskap vir werk.
Goeie gesindheid.
Dalk 'n kollega in die oog.
Persoon is of n "workacholic" of ontvlug van gesin.
Mededingende vergoedingspakket.

02/09/2009

Produksie

02/09/2009
03/09/2009
03/09/2009
03/09/2009
03/09/2009
03/09/2009
03/09/2009
03/09/2009
10/9/2009
10/9/2009
10/9/2009
10/9/2009
10/9/2009
10/9/2009
10/9/2009
10/9/2009
10/9/2009
10/9/2009
14/09/2009
17/09/2009

Produksie
Admin
Admin
Admin
Admin
Admin
Admin
Admin
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
M/B
M/B

132

Bevredigende werksomstandighede tov kantoorruimte.


Regverdige mpy voertuig pakket.
Buigbaarheid tov werksure.
Begrip vir persoonlike omstandighede.
Billike geleentheid om te kan wins deel uit maatskappy se opbrengs.
Atmosfeer is reg, vriendelike atmosfeer.
Die besigheid se naam is baie bekend.
Daar is 'n trots om by die maatskappy te werk.
Goeie salaris.
Goeie vergoedingspakket wat ontvang word.
Toesighouer vriendelik met personeel.
Goeie mensverhoudinge tussen alle mense.
Konsekwentheid en regverdigheid.
Doelwit wat gestel word waana elkeen streef.
Baie geleenthede vir loopbaan groei.
Goeie byvoordele, veral medies.
Trots op die maatskappy vir wie werk.
Werksarea is gerieflik en toegangklik.
Word reg vergoed.
Word ekstra vergoed as iets ekstra gedoen word.
Kry erkenning wanner iets goed gedoen is.
Regverdigheid en konsekwentheid geskied.
Goeie produk wat gemaak word. Lang produksielopies. Trots om naam
op boks te sit.
Elke dag nuwe uitdagings.
Goeie pakket en byvoordele.
Loopbaan met bevorderingsgeleenthede binne die maatskappy.
Sekuriteit - Finansieel gesonde maatskappy.
Personeel met wie hy kan assosieer.
Gesonde werksetiek, waardes.
Goeie lewenskwaliteit in area/stad/dorp waar mpy gele is.
Question 8. Do you know of any other organisation that offer their
employees any form of reward that you feel would be good for APL
Cartons to add to their currend reward offering?
Ander maatskappy het kafeteria's waar mense kan eet.
Gratis vervoer na en van die werk per bus.
Toelaes vir huur in plaas van koop.
Ses maandelikse aansporingsbonusse om sodoende afwesigheid aan te
spreek.
Die geleentheid om te kan spaar moet teruggebring word.
Tydens diensverlating moet daar diensjare bonus uitbetaal word.
Ontspannings lokaal. Tafeltennis, gim ens.
Slegs 30 min middagete en dan Vrydae vroer huis toe gaan.
Kafeteria uitbrei sodat middagetes daar kan koop. Ook vir huis toe neem
en vir klinte besoeke.
Defnitiewe parkering vir klinte.
Vir alle personeel 'n stort om skoon te maak.
Ontvangs lokaal moet verbeter word.
Sal leker wees om vrugte te ontvang vanaf die aandeelhouers.
Kan dalk sap ook ontvang vanaf die aandeelhouers.
Lenings wat gegee kan word binne 24 uur as daar nood is.

17/09/2009
17/09/2009
17/09/2009
17/09/2009
17/09/2009
26/08/2009(1)
26/08/2009(1)
26/08/2009(1)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
27/08/2009
27/08/2009
27/08/2009
27/08/2009
27/08/2009
27/08/2009

M/B
M/B
M/B
M/B
M/B
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie

27/08/2009
27/08/2009
22/09/2009
22/09/2009
22/09/2009
22/09/2009
22/09/2009
22/09/2009

Produksie
Produksie
S/B
S/B
S/B
S/B
S/B
S/B

02/09/2009
02/09/2009
02/09/2009

Produksie
Produksie
Produksie

02/09/2009
02/09/2009
02/09/2009
03/09/2009
03/09/2009

Produksie
Produksie
Produksie
Admin
Admin

03/09/2009
03/09/2009
03/09/2009
03/09/2009
10/9/2009
10/9/2009
10/9/2009

Admin
Admin
Admin
Admin
Produksie
Produksie
Produksie

133

Spanbou saam met bestuur waar hulle ons kan leer ken en vir ons
terugvoer gee.
Mense op masjiene vir die klinte besoek.
Einde van die jaar vir kinders geskenke gee.
Dalk die "incentive" meer eweredig versprei oor alle posgrade.
APL kan personeel weer begin help om huise te bekom.
Meer verlof kan aan personeel toegestaan word.
Wanneer verjaar kan daar iets van gemaak word.
Wanneer mense aangestel word kan dit moontlik in die koerante aangedui
word.
Familie sportdae.
Vir familie kan kom wys hoe hulle werk by APL.
Die bus by begrafnisse borg.
Die winste van die maatskappy kommunikeer.
Bel in kinders deur beurse.
Beter mediesefonds.
HACCP en Veiligheids opleiding.
Volledige induksie.
Parkeerplekke vir motors wat skoon en netjies is.
Mense wat taxi's ry veilige aflaai plek gee.
Stort en kleedkamers.
By bedanking of afdanking erkenning kry vir die aantal diensjare wat
gewerk het.
Grond koop en vir werknemers huise bou wat die werknemers weer by die
maatskappy koop.
Gratis vervoer na en van die werk per bus.

10/9/2009
10/9/2009
10/9/2009
14/09/2009
26/08/2009(1)
26/08/2009(1)
26/08/2009(1)

Produksie
Produksie
Produksie
M/B
Produksie
Produksie
Produksie

26/08/2009(1)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)
26/08/2009(2)

Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie
Produksie

27/08/2009

Produksie

27/08/2009
27/08/2009

Produksie
Produksie

134

Appendix C: Different concepts that were identified from focus groups

FOCUS GROUP INTERVIEWS


Concepts from answers
Question 1. Why is it good to work at APL Cartons?
Job security - Financially strong - even in bad economic
times.
Training is good and opportunities to learn are created.
Good successful organisation to work for and is better
than competitors - proud of working here.
Good relationship with fellow employees based on
mutual respect and where an employee is not only a
number.
Vouchers, hampers, long service rewards and other
recognition are appreciated.
Good working environment, not to formal, clean, very
safe.
Career opportunities exist.
Good quality product and service.
Flexibility to attend to children extramural activities when
possible.
Good management and leadership.
Incentive remuneration is good.
Job is interesting and challenging.
Strives to improve continuously and increase standards.
Company has a good value system.
Daily interaction with all disciplines in the organisation.
Good remuneration.
The rural area in which the organisation is situated
contributes to high quality of life.
Direct superior trust, motivate and encourage.

Number of
times
mentioned

Production

12
8

8
7

160%
140%

100%

80%

100%

80%

100%

3
3
3

1
3
2

20%
60%
40%

2
2
2
2
2
1
1
1
1
1

Admin

1
2
2
2
2

M/M

S/M

50%

2
1

200%
100%

50%

100%

50%
1

100%

1
1
1

100%
100%
100%

100%

200%

100%

40%
40%
40%
40%

50%

135

Low labour turnover which show employees are


satisfied.
Opportunities exist for self development.
Employees done more than what is expected from them.
Organisation sometimes helps when employees are in
need.
Qualifications of people are good.
See senior management every day.
Supports labour intensive processes instead of
mechanised processes.
The organisation helps and supports the community.
The organisation is passionate about people.
Working hours are acceptable.
Question 2. Why it is not good to work at APL
Cartons?
Conflict exists and are not addressed in the right manner
causing people and departments to work against each
other.
The process to determine the successful candidates for
vacant positions or acting is not consequent and results
are not communicated to unsuccessful applicants.
Problems repeat itself because of bad discipline or
persons do not take ownership for his/her
responsibilities.
Not all departments when needed take the necessary
disciplinary action. Departments are also not
consequent with the steps they do take. This results in
insufficient discipline.
Not all operators respect the people on their production
line and do not treat them right, especially if it is family
members of other staff.
Supervisors do not set the right examples, treat people
differently with regard to leave approval and sometimes
shout at people on the production lines.
Temporary staff on the production lines is problematic,
the quality of the people and attitude.

1
1
1

20%

1
1
1

1
1
1

20%
20%
20%

1
1
1
1

1
1
1
1

20%
20%
20%
20%

40%

120%

0%

80%

80%

60%

60%

1
1

50%
50%

300%

100%

400%

50%

100%

136

Shift work has negative effect on the safety of people at


home and personnel. You are not there to protect them.
The time allowed for tea breaks in the factory are too
short.
Special job grade earns too little money.
Taxi transport for production personnel is not reliable
and normally late for work.
Personnel is not aware of possible career progression
paths.
Employees don't always receive support in the solving of
problems.
People are labeled and it is not possible to get rid of the
label.
People start off negatively and not positively.
Consistency regarding issues like time-off for admin staff
is lacking.
Autocratic leadership style sometimes.
Reluctance of some people to work together.
The occasional middle manager who does not respect
senior management.
Communication is not good.
Too many empty promises are made to employees and
clients.
Offices are not private enough.
Personnel is not always honest with each other and a lot
of back stabbing takes place.
Decisions are made too quickly, changes too much and
are not kept.
People in senior positions do not always greet lower
levels of staff. It makes the lower level staff negative
towards organisation.
Smoking policy was done autocratically and is not
practical.
Jobs are some times created unnecessary and then
don't deliver the expected results - waste of money.

60%

2
2

2
2

40%
40%

40%

40%

100%

1
1

1
1

100%
100%

1
1
1

100%

1
1

50%

1
1

1
1

50%
50%

50%

50%

20%

20%

20%

20%

1
1

100%
100%

100%

137

Promotions at the production side take a long time.


The research and development team needs to sign of
new jobs and not the quality department.
The autonomy to do a specific job is not always given.
People sometimes arrive for work and the production
machine is broken or there is no work.
No assistance exists for purchase of houses.
Currently no formal year-end function takes place where
husband and wives are invited.
Remuneration does not equal responsibilities.
People in different jobs are jealous of each other'
benefits and working conditions.
Retirement age for all staff is not the same.
Only one union which can be joined.
Camera system creates feeling of non-trust.
Performance management scorecards not manage
correctly by operators.
Certain training is only for operators.
Very cold in the evenings in winter and very warm in
summer in the factory.
The physical workload for the production lines are high.
Question 3. What need to change at APL Cartons?
A special area for lockers, cafeteria and toilets must be
created outside the factory.
Tea times must be longer to be able to eat.
The process of disciplinary hearings is not correct and is not
confidential. Disciplinary actions are only in the production
area.

Temporary positions on machines must be made


permanent.
Increase in the amount of communication to ensure
expectations are clear and everybody is informed about
performance.
Special grade employees remuneration must be
increased.

20%

1
1

1
1

20%
20%

1
1

1
1

20%
20%

1
1

1
1

20%
20%

1
1
1
1

1
1
1
1

20%
20%
20%
20%

1
1

1
1

20%
20%

1
1

1
1

20%
20%

5
4

5
4

100%
80%

60%

60%

40%

40%

138

The sirens that announce the start and finish time of


shifts and tea times must be repaired.
All employees needs to be taught on improving
relationships at work
People in the organisation need to have a more positive
influence on the organisation.
Senior management must make sure it does not take
decisions too quickly and think about the consequences
of a decision.
People need to start taken ownership for their
responsibilities.
More guidelines need to be created for all job
incumbents.
Departments and sections need to increase teamwork.
No blame fixing must take place.
Recognition must be handed out to the right people.
Stricter adherence to policies and procedures.
The effective addressing of repetitive deviations.
More loyalty by all employees to be willing to go the
extra mile.
People who are dead wood need to be motivated so
they can contribute to the organisation.
The people in the organisation must trust and support
each other.
The laboratory must be equipped with the best possible
testing instruments.
Family members should be moved to different machines
or shifts to avoid special treatment.
The physical area for production must be increased
because machines are to close to each other.
The time smokers take to smoke is not acceptable and
non-smokers must be treated similarly.
Production lines must be kept up to date with the newest
technology.

40%

40%

100%

100%

100%

1
1
1
1
1
1

1
1
1
1

100%
100%
100%
100%

1
1

20%
20%

1
1

100%
100%

20%

100%

50%

50%

50%

20%

20%

20%

20%

139

The stores section must be moved closer to production


to save cost.
Management must spend more time on the production
floor to learn employees better.
New employees must be made aware of policies and
codes.
People should be utilised in the positions they have
been appointed.
Production employees should receive more safety
clothing because of all the ink and other chemicals they
work.
Taxi cost needs to be subsidised from the organisation.
No refusal of an application form for normal leave.
A bigger recognition price for 15 years service is
needed.
Study leaves aim must be to ensure the employee is
well rested when writing exams.
Profit share incentive must be calculated against daily
targets and paid out weekly.
Every second year job grading must be done on all jobs.
The amount of points which can be used to clock in or
out of work must be increased.
The organisation must assist in loans when needed to
employees.
The organisation must assist employees in the
purchases of houses.
Performance incentives must change and replace by a
fix amount per team.
Need to increase the amount of team building to
increase the feeling of unity.
Products needs to be improved continuously.
The time shifts starts in the winter and summer must be
different.
Study must be done to determine the impact of forklift
gas in the factory.

20%

20%

20%

20%

1
1
1

1
1
1

20%
20%
20%

20%

20%

1
1

1
1

20%
20%

20%

20%

20%

20%

20%

20%

20%

20%

140

Remuneration needs to be fair.


Question 4. Except for money, is there something
you would like to receive or experience from APL
Cartons?
Recognition system must be developed to include
administrative staff and give more continuous
recognition - like vouchers.
More benefits at the end of service. The longer a person
worked the bigger the benefit.
The value and workload of each position must be
communicated to the rest of the organisation.
Assistance with purchase of house or housing projects.
More feedback about company performance and
strategy.
The ability to take time-off in the week for time worked
on the weekend.
The opportunities to practically apply new learned
aspects are limited.
Leadership in the organisation needs to be less
autocratic and more participative.
Employees must ask more what they can contribute and
not what they are going to receive.
Employees to be more authentic and stand together.
In-house medical aid which is affordable for all
employees.
Sport competition between different shifts.
Year end function in formal or sporting format.
More training must be done for career progress.
APL branded clothing must be subsidised.
The setting of targets to increase competition.
Assisting employees children with studies.

20%

60%

60%

2
2

0%
40%

20%

1
1
1
1
1
1
1

1
1
1
1
1
1

20%
20%
20%
20%
20%
20%

Respect for all religions.

20%

Time-off to attend to personal issues.

20%

Not all sick leave letters must be evaluated by the nurse.

20%

400%

200%

50%

50%

50%

1
1

1
1

50%
50%

50%

0%

100%

141

The organisation to grow more and start branches in


other provinces.
ATM on the premises to safe money on transport to
withdraw money.
Increase in attendance allowance.
Smoking area which is more private and out of sight.
Day care and transport for children which is subsidised
by organisation.
Assistance with loans.
The safety clothing supplied by one supplier and issued
fixed time during the year.
Question 5. How would you explain the relationship
between employees in APL Cartons?
Team work is good but more so in departments than
between.
Relationships is very platonic and not on a friendship
level.
Some people gossip a lot.
Some people are bombastic.
Conflict between different departments exist.
All employees talk about work related aspects.
People inside sections have good relationships.
People on the production floor do argue a lot with each
other.
Induction needs to be improved so people can start to
work quicker on the necessary standards.
When a problem is identified, more small group
meetings (Kwaga's) must be held to address the
problem.
The meetings before the beginning of each shift must
start again.
Time is too short to create relationships.
Most relationships are on a mature level.
Employees don't always listen to each other.
Not always participative.

20%

1
1
1

1
1
1

20%
20%
20%

1
1

1
1

20%
20%

20%

40%

100%

2
2
1
1
1
1

1
1

20%
20%

1
1
1

100%
100%
100%

1
1

20%
20%

20%

20%

20%

20%

1
1
1
1

1
1
1
1

20%
20%
20%
20%

50%

50%

142

Feel at home at APL Cartons.


The relationship between shifts is not always good.
Relationships are generally good, but there are incidents
of personal differences.
Question 6. Is there anything that happens at APL
Cartons that you are ashamed to tell somebody
else?
The low salaries of the special job grade employees.
The smoking area which is outside of company
premises.
Not to be able to clean hands properly from ink stains
before leaving from work.
To work on product, but the art work was ugly and
developed by outside company. People believe it is
your own art work.
Sometimes not aware of vacant positions which are
advertised.
When quite a few positions are advertised in a
department, people think there is something wrong in
the department.
The feeling exists that donations are not for all. Only
certain groups.
Local school sporting events with no APL waste bins.
When a colleague talks negatively about the
organisation at private functions.
Departments that do not work together but rather against
each other.
Certain things people discuss about the ladies who do
the cleaning.
Breaks that are only 10 min long.
The amount of family members being appointed.
Promotional clothing which is too expensive.
Gossip to much.
Employees who steal from the organisation.
Not enough confidentiality about sick leave letters.

1
1

1
1

20%
20%

20%

80%

60%

40%

100%

100%

100%

1
1

1
1

100%
100%

100%

1
1
1
1
1
1
1
1

1
1
1
1
1
1
1
1

20%
20%
20%
20%
20%
20%
20%

50%

143

No cleaning facilities for employees like showers.


Safety shoes that hurt feet.
Question 7. If each one can visualise a person on
his way to work and this person is so happy, he/she
is looking forward to go to work, he/she cannot wait.
What do you think the organisation offers the
individual to ensure this behaviour?
Sufficient remuneration and benefits.
Do not want to disappoint the organisation. It can be
because organisation has helped him/her.
A spirit of friendship at work and an environment which
is enjoyable.
Employees are friendly towards each other, loyal
towards each other and show the necessary respect.
The organisation has a well-know name and proud of it.
Physical work environment is motivational.
The task to be done is challenging.
The person likes the contents of the job.
A balance between private and work life exists.
Resources are sufficient.
Employees take ownership for problems.
Focus is on making other staff members happy.
Financially strong organisation.
Good work ethic and organisational values.
Good quality of life in the place where the organisation is
situated.
Person is a workaholic or do not want to be at home.
Flexible working hours.
Insight into personal circumstances.
Developed a love for the work he/she does.
The person's religious life plays an important role in his
life.
He/she is thinking of a promotion or career progress.
It is a very positive person.
The organisation supplies in all the persons needs.

1
1

1
1

20%
20%

11

120%

80%

40%

3
3
3
2
1
1
1
1
1
1
1

3
3
2
1

60%
60%
40%
20%

100%

100%

1
1
1
1
1

1
1
1
1
1

20%

1
1
1
1

1
1
1
1

20%
20%
20%
20%

150%

50%

100%

100%

1
1

100%
100%

100%

100%
100%
100%
100%
100%

1
1
1

50%
50%
50%

144

Every employee has a purpose and vision and know


what needs to be done.
Supervisor is very friendly with personnel.
Consequent and fair treatment from organisation.
Sufficient opportunities for career growth.
Receives recognition when something is done well.
Good product that is manufactured.
Teamwork is brilliant.
Question 8. Do you know of any other organisation
that offer their employees any form of reward that
you feel would be good for APL Cartons to add to
their current reward offering?
Cafeteria to eat lunch and buy meals for supper at
home.
Recreation facility. Table tennis, etc. Shower and
locker facilities.
Free transport to and from work.
Service bonuses to be paid out when employment ends.
Assistance with the purchase or building of houses.
30 minutes lunch and going home earlier on Fridays.
Dedicated parking for customers.
A modern reception.
More proportionate distribution of the yearly incentive
bonus.
Allowances to rent accommodation.
Six monthly incentives.
The opportunity to save at work.
To receive fruit or juice from the shareholders.
Loans that can be paid out within 24 hours if there is a
crisis.
Teambuilding with senior management so we can learn
each other better.
Factory staff to visit clients.
End of the year presents for children.
Increase in the amount of leave.

1
1
1
1
1
1
1

1
1
1
1
1
1
1

20%
20%
20%
20%
20%
20%
20%

60%

2
2
2
2
1
1
1

2
2
2

100%

200%

1
1
1

100%
100%
100%

40%
40%
40%

1
1
1
1
1

1
1
1
1

0%
20%
20%
20%
20%

20%

1
1
1
1

1
1
1
1

20%
20%
20%
20%

50%

145

To make something special of an employees yearly


birthday
When people are appointed to the organisation to place
it in the newspaper.
Family sport days.
To be able to show family members their work.
To sponsor the bus at funerals.
To communicate profits of the organisation.
Invest in the future of their children through study
bursaries.
Better medical aid.
HACCP and safety training.
Sufficient induction to new employees.
Parking for vehicles that are clean.
To allocate a safe dropping zone for taxis

20%

1
1
1
1
1

1
1
1
1
1

20%
20%
20%
20%
20%

1
1
1
1
1
1

1
1
1
1
1
1

20%
20%
20%
20%
20%
20%

146

Appendix D: Box of rewards