Task 3.

1 - Assessing the link between motivational theory and reward system

"Motivation is the process by which the behavior of an individual is influenced by others,

through their power to offer or withhold satisfaction of the individual's needs and goals". (BPP
Learning Media, 2010). Motivation is a well-known and one of the most important aspect of
modern as well as traditional business. Every employee needs a certain motivation in order to
give his/her 100% while working in the organizations. There are a large number of motivational
theories to learn the different aspects of motivation and understand it completely.

One of the most famous motivational theory was given by Abraham Maslow also known as need
hierarchy theory. According to him, people tend to satisfy their needs in certain levels. He listed
five such levels. These levels have a certain priority associated with these. He argued that a
person at first tries to satisfy his most basic needs initially. They jump to the next level that is
more advanced, only if the previous level of needs is satisfied. There are many other theories that
depicts the correlation between reward and motivation. Actually, there is a direct and sensitive
relation between reward and motivation. If an employee is getting certain rewards based on
his/her performance, then it is obvious that he/she will feel motivated.

In the given case of Microsoft, which is a well-known U.S software company known for its
operating systems and some other software such as Office Tools. Microsoft is known for its
culture that is employee oriented. In the given case, Microsoft offers ownership to its employees
based on their performances in terms of stocks. Ownership has been a tremendous motivational
reward from many decades. In this reward system, companies give employee its stock rather than
paying them directly for their performance. It`s been an effective technique as employees feel
more empowered and motivated after getting ownership of the company they work for. It also
enhances their individual performances as they wish to see the stock prices going high and for
that cause, they perform well and so does the company. Microsoft is also giving them ownership
as the employees meet their objectives. Moreover, these objectives are achievable and realistic.
Therefore, after getting such great rewards employees respond accordingly with their
performances and they have stated that these rewards work as a great motivator and they give
their 100% to perform even better day by day.
Task 3.2 - Factors determining employee’s pay

There are several factors that account for the employee`s pay. Some of these are described
below:

Job Evaluation

Job Evaluation is an important factors that help an organization in determining an employee`s

pay. Job evaluation is the process of evaluating an employee`s performance for a specific period
say six months or an year. There are various methods of evaluating an employee`s performance
such as supervisor`s feedback, individual sales achievements and feedback from the customers`
etc. In the given example of Microsoft, the company uses a two-fold evaluation technique. At
first, employees do their internal evaluation on their own i.e. how much efficient they think they
are on their own. Secondly, the managers such as front line managers evaluates them over their
performances. Then employees and managers sit together and discuss their performances. Job
Evaluation helps an organization to make decisions related to the employees` pay including
incentives and promotions etc.

Education

Obviously, education matters when deciding the pay for someone. Candidates with higher
education are generally given higher salaries as well. Suppose there is a job opening of Technical
Support Executive. Now, the company has shortlisted two candidates; one with a bachelor’s
degree and other one with a masters` degree, given the fact that both the candidates can do the
job with similar effectiveness. Now, the company will consider their education and will be
paying more to the one with the Master`s degree.

Experience

Experience also acts as a dominant factor when making decisions about the pay of an employee.
Experience does matter a lot and experience can be a deciding factor. The type of company or its
reputation an employee has worked for, number of years of experience and relevancy of the
experience are some of the factors that need to be taken into account while deciding the pay.

Skills and Knowledge

The individual skills that an employee possess also affects the decision of deciding the pay for
him/her. Sometimes, the job is too complicated that the company needs someone with extra-
ordinary skills. These skills and knowledge are also considered by the companies when they
decide the pay of an employee.

Employment Legislations and the Industry Served

There are different employment legislations in different countries. Minimum wage is one of the
most important components of these employment laws. Therefore, firms consider that too while
deciding an employees` pay. According to the law, no company can pay less than the minimum
wage to an employee. Furthermore, different industries have different salaries` trends. Some
industries where more skills are needed pay higher to the employees and in some industries,
salaries are not that high.

Task 3.3 – Classification and Effectiveness of various reward systems

“Reward System is the mix of extrinsic and intrinsic rewards provided by the employer. It also
consists of the integrated policies, processes, practices and administrative procedures for
implementing the system within the framework of the human resources strategy and the total
organizational system”. (Bratton and Gold, 2003).

Rewards can be divided into two categories:

1. Extrinsic Rewards
2. Intrinsic Rewards

Extrinsic Rewards are performance based monetary benefits that are given to an employee in
return for his/her performance over a specific time period. Extrinsic Rewards may include:

 Bonus
 Gifts
 Increments in the Salary
 Tour Packages
 Incentives based on the Targets
Intrinsic Rewards, on the other hand are non-monetary rewards, like:

 Praise

 Promotions

 Big Responsibilities

 Authority

 Shift

 Recognition

 Seniority

 Trust

Google`s 80/20 principle can be taken as an example of intrinsic reward. At Google, Employees
are allowed to spend 20% of their working hours at their personal work or projects. Employees
take it as a great source of motivation and it is one of the reasons for Google being one of the
best companies to work for. Microsoft`s offering of ownership in terms of the stocks is a good
example of extrinsic reward. Microsoft gives stocks to the employees based on their
performances. Due to that, employees try to give their 100% and improve their performance
continuously by working in a smarter and harder way.

Task 3.4 – Methods for monitoring employees` performance

Self-Evaluation

Microsoft is currently using it for monitoring the employees` performance, according to the
given case. In this monitoring methods, employees do their personal evaluation by considering
various internal factors that account for their performance. Generally, it is done by giving
employees a feedback form containing multiple choice and subjective questions about their
performance. Companies also ask for their advice or any improvement that they need. For
example, if an employee thinks that he might be needing some specific training, then the
management does consider that.
Maintaining a file for each employee

It is also a good method of monitoring the performance and can be used by Microsoft. In this
method, companies maintains a different file for each of the employees. This file contains the
achievements, sales figures, drop/rise in performance in the past and feedback from different
sources etc. It can be helpful for monitoring the individual performance of the employees other
than measuring performance of work teams of groups.

Meetings between staff and managers

Many companies use meetings between staff and the managers as a final performance feedback.
In this method, employees sit with the managers and supervisors in a room and discuss their
performances. It is beneficial because employees can justify their performance for a particular
monitoring period.

360 degree feedback

As the name suggests, a lot of individuals belonging to different designations give a feedback
about the employee. It is an overall result of the analysis of all the feedbacks from the different
sources about an employee. As shown in the image, different parties such as customers,
suppliers, colleagues, supervisors, employee himself/herself and peers etc. provide their feedback
that is accounted for monitoring the employee`s performance. Microsoft can also include the
feedback from other employees, managers, supervisors, reports, customers about an employee
about his/her performance.

Task 4.1 – Identifying reasons for cessation of employment

In the given case, following reasons can become the reasons for cessation of employment:

Absenteeism

Employers understand the fact that every employee needs some time to attend personal matters
or some health related concerns. That is why, according to the employment law, each employee
has a right to some paid leaves. Other than paid leaves, if an employee does not go to the work,
then his/her salary is deducted for absents from the workplace. But, it does not mean that
employees can take as many leaves as they want. As absenteeism affect the productivity of the
organizations in an adverse way, employers take it as a serious concern and many employees
lose their job each year due to absenteeism. In case of the given scenario as well, Reem was
frequently absent from the work and it can lead to her termination.

Attitude

In this given case, the attitude of Reem can also lead to her termination as she had been given
warnings regarding absenteeism and reaching late to work. Moreover, she has also been asked
about the cause for her actions but her answers clearly reflect an unacceptable attitude to work.
Most of the times, employees` attitude becomes a reason for their termination.

Neglecting Warnings

Employers can`t generally fire someone due to his/her actions without giving any warning.
Number of required warnings may differ from organization to organization. In this case, Reem
has been given multiple warnings but still she is absent from work without any reasonable cause.
If an employee does not amend his/her behavior even after getting a warning, employers may
terminate him/her.
Task 4.2 - Employment exit procedures of two organizations

We will take first example of London Borough of Barking and Dagenham.

1. Employees give a resignation letter to their immediate front line manager.

2. Managers then inform the H.R Department
3. Managers Issue the details of exit procedure to the employee.
4. Exit interview takes place between employees and the managers.
5. Exit Questionnaire is filled and submitted confidentially by the employees to the H.R
Department that contains questions like reason for leaving, feedback, complaints and
suggestions etc.

In the second example, we will discuss the exit strategy adopted by NHS, UK. It can be divided
into four steps.

First step is to process the resignation letter. After employees submit their resignation in the H.R
department, the department will process it by contacting the line managers if all the resources
allocated to the employee are ready for going to the another person. Some other formalities are
also done at this step.

In the second step, an exit interview is conducted in which employee is asked for the feedback
and reasons for leaving.

Third step is there for giving references to the employee so that he/she can use these in their next
employment.

In the fourth step, the H.R department reviews the complete documentation and make necessary
changes, if any. Then finally, the employee is relieved from his/her service.

Task 4.3 - Impact of the legal and regulatory framework in the given case

In the given case, absenteeism is the main reason for the termination of employment contract
between Reem and her employer. On legal grounds, Absenteeism can be covered if it is due to
some sort of injury, illness or any other health related or serious concern. In such cases,
employees can submit their medical certificates and their absenteeism will not become the reason
for their termination in most of the cases. But, here, in this case, no such thing exists. Reem is
frequently absent and late to work without any justifiable cause. In such cases, generally
employers issue a warning for the employee`s behavior hoping that it will be improved. Reem`s
employer did the same thing and Reem was issued two warnings. Still, she reaches late two times
and is absent for one day after getting the final warning from her employer. Therefore, Reem`s
employer has full right to terminate her employment. Absenteeism is a serious concern and it is
often mentioned in the employment contracts as well. Reem can`t resist her termination because
it is not a case of unfair termination of employment.

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