HUMAN RESOURCE MANAGEMENT

LUMBA
Submitted by
(ADITYA VIKRAM SINGH)
(200012135265)
MBA Semester II

Department of Business Administration

University of Lucknow
2021
(A) How is the Organisational Strategy related to

(1)Performance Benefits

Strategic Performance Management

Strategic performance management is more than cultivating a work

environment conducive to the needs of all employees. It involves a series

of supporting processes to be present such as strong leadership, healthy

interpersonal relationships, continuous and constructive feedback, and

collaboration.

Importance of Strategic Performance Management

1. Performance Management Encourages Employee Reward and

Recognition
Rewarding and recognising your employees can be hugely beneficial to

your business. A survey by American Express revealed a third of compa-

nies believe reward and recognition systems result in better staff retention,

while half also attribute greater motivation to offering incentives. Meaningful

reward and recognition systems can only operate in businesses where

there is an accurate and visible process of performance feedback and dis-

cussions. Continuous performance management enables management to

identify activity and efforts worthy of praise or reward. In turn, this promotes

a growth mindset among your team members.

Continuous performance management allows managers to see when

employees go above-and-beyond. It helps them track progress against

goals and personal development and make informed decisions about addi-

tional compensation, such as pay-rises or bonuses. Meaningful reward sys-

tems are immensely important for employee happiness.

2.Performance Management Helps to Boost Employee Engagement and

Productivity

Engaged employees stay longer, actively involve themselves in the work-

place and produce better results. Improving levels of employee engage-

ment is key to boosting productivity and maximising ROI. Performance

management, done well, is a vital tool for having engaged employees.

Continuous performance management creates an ongoing dialogue and an

atmosphere of trust, support and encouragement. It also helps develop a

relationship between employee and company. If an employee is aware that

their manager and the business cares about what they are doing and is

dedicated to helping them do better and progress their career — they are

far more likely to engage with the company.

3. Performance Management Helps to Create Employee Development

Strategies

Continuous performance management means you are proactively develop-

ing employees by covering their development needs. With regular catch-

ups, you can pursue continuous performance improvement, as you fre-

quently meet to discuss each employee’s performance, possible develop-

ment opportunities and development plans. By combining this with flexible

personal development objectives, businesses can cultivate talent in a way

simply not possible with once or twice yearly performance conversations.

Use the information you collect about an employee’s past performance and

current efforts, and the discussions you have, to grow their talent. Use

strategies that not only play to employees’ strengths but also reflect the

direction the business is heading.

4. Performance Management Allows for the Exchange of Feedback

The importance of feedback in performance management cannot be over-

stated. Employees want feedback — and they want it regularly. They need

(and deserve) to know how they are performing and how they can improve.

Furthermore, they should have the opportunity to give feedback on their

company and management. This is the only way company processes can

evolve and become more streamlined.

5. Performance Management Creates Clarification Concerning SMART

Goals

It is surprising and rather worrying to hear that studies have shown around

50% of employees aren’t clear on exactly what their role within the work-

place is or what long-or-short-term goals they are trying to achieve.

Lack of clarity is another reason why effective performance management is

so important. The right performance management processes can eliminate

ambiguity and confusion about goal setting. Having regular, future-focused

conversations through continuous review helps to ensure employees are

clear on everything they are supposed to be doing and what is expected of

them.

(2) .Compensation and Employee Benefits

Compensation is a tool used by management to create happier workplaces.

Compensation policies can be accustomed according the business

requirements, goals, and existing resources.

Compensation strategies can be used to:

● hire and retain top performer employees.

● increase the satisfaction level of employees.

● reward and recognition programs to inspire peak performance.

● achieve internal as well as external equity.

● lessen turnover and boost company loyalty.

● adapt practice of transparent payment policies.

Role of Compensation and Employee Benefits in Organizational

Strategy
1.Helps to increase the motivation of employees
Appropriately compensated employees feels that they add value to the

company. When employees feel appreciated, they feel good about coming

in to work. Henceforth, the morale of all employees upsurges and people

are encouraged to come to work with a good performance. Furthermore,

when employees know that they will get a bonus or incentives, they will be

highly motivated to deliver better results. Bonus and incentive

compensation plans become a crucial point for business success.

2.Keep a competitive edge for recruitment

Candidates always look to put themselves in the best promising position

financially. Those who are worth a definite salary amount often know their

caliber and will seek for an opening that pays accordingly. Do research on

what your competitive companies compensation and remunerations

packages look like. Make sure you offer a comparable package to your top

hires so that you fascinate the best candidates for your corporation. Hiring

the perfect candidate, the first time decreases recruiting budgets and helps

free up business proprietors for other tasks.

3.Legal Compliance
State and government employment laws govern many facets of the

worker's pay and hours, comprising what the minimum rate is and how
many hours they may work on weekly basis before they're allowed for

overtime pay. Companies must pay workers as per the compensation laws

to elude lawsuits and actions by the state or centralized governments.

Some rules differ by state and by employee group.

4.Employee Loyalty

When workforces are being paid well and feel contended, they're likely to

stay with the establishment. Appropriate compensation is one factor why

workforces remain with employers. Reliability means that business owners

don't need to continue to spend time.

5.Increased Productivity
Contended employees are the most productive employees. Efficiency in

relation to compensation starts with employees feeling appreciated which

upturns motivation.

(B)

PERFORMANCE BENEFITS

A good performance management system works towards the improvement

of the overall organizational performance by managing the performances of

teams and individuals for ensuring the achievement of the overall

organizational ambitions and goals. An effective performance management

system can play a very crucial role in managing the performance in an

organization by:

● Ensuring that the employees understand the importance of their

contributions to the organizational goals and objectives.

● Ensuring each employee understands what is expected from them

and equally ascertaining whether the employees possess the

required skills and support for fulfilling such expectations.

● Ensuring proper aligning or linking of objectives and facilitating

effective communication throughout the organization.

● Facilitating a cordial and a harmonious relationship between an

individual employee and the line manager based on trust and

empowerment.

Performance management practices can have a positive influence on the

job satisfaction and employee loyalty by:

● Regularly providing open and transparent job feedbacks to the

employees.
 ● Establishing a clear linkage between performance and compensation

● Providing ample learning and development opportunities by

representing the employees in leadership development programmes,

etc.

● Evaluating performance and distributing incentives and rewards on a

fair and equated basis.

● Establishing clear performance objectives by facilitating an open

communication and a joint dialogue.

● Recognizing and rewarding good performance in an organization.

● Providing maximum opportunities for career growth.

Employee Benefits

Employee benefits typically refers to retirement plans, health life insurance,

life insurance, disability insurance, vacation, employee stock ownership

plans, etc. Benefits are increasingly expensive for businesses to provide to

employees, so the range and options of benefits are changing rapidly to

include, for example, flexible benefit plans.

Benefits are forms of value, other than payment, that are provided to the

employee in return for their contribution to the organization, that is, for

doing their job. Some benefits, such as unemployment and worker's

compensation, are federally required. (Worker's compensation is really a

worker's right, rather than a benefit.)

Prominent examples of benefits are insurance (medical, life, dental,

disability, unemployment and worker's compensation), vacation pay,

holiday pay, and maternity leave, contribution to retirement (pension pay),

profit sharing, stock options, and bonuses. (Some people would consider

profit sharing, stock options and bonuses as forms of compensation.)

Employee Compensation

Compensation includes topics in regard to wage and/or salary programs

and structures, for example, salary ranges for job descriptions, merit-based

programs, bonus-based programs, commission-based programs, etc. (Also

see the Related Info (including Benefits).)

Compensation is payment to an employee in return for their contribution to

the organization, that is, for doing their job. The most common forms of

compensation are wages, salaries and tips.

Compensation is usually provided as base pay and/or variable pay. Base

pay is based on the role in the organization and the market for the

expertise required to conduct that role. Variable pay is based on the

performance of the person in that role, for example, for how well that

person achieved his or her goals for the year. Incentive plans, for example,

bonus plans, are a form of variable pay. (Some people might consider

bonuses as a benefit, rather than a form of compensation.) Some programs

include a base pay and a variable pay.

Employees have certain monies withheld from their payroll checks, usually

including federal income tax, state income tax, FICA (social security)

contributions, and employee contributions to the costs of certain benefits

(often medical insurance and retirement).

For example

1.TESLA:

(Performance benefit)

It recognized the importance of engaged employees and their impact on

customer engagement. In response, they created the Tesla360 Summary.

This was essentially a staff survey that used the Maslow Hierarchy of

Needs to guide performance management. The survey was a massive

success and achieved an impressive 91% participation rate.

So it's strange that during the tenure of Gaby Toledano, the Chief People

Officer who left late last year, Tesla appears to have embraced an entirely

different approach. Details are thin, but it seems that they've gone back to

using a traditional annual review to determine promotions, demotions and

firings.

That's a stark switch up from their previous engagement-focused approach

aimed at helping employees reach the top of the self-actualization pyramid.

(Compensation and Employe Benefits)

Tesla Employee Description

Benefits

Health Insurance Best health care plan coverage for basic

healthcare, drugs, vision, professionals,

 hospital room accommodations, medical

supplies and services, and travel emergencies.

Life Insurance ● Through Telsa Life Insurance

benefits, Beneficiaries get two

years’ salary plus additional

benefits

● Maximum of $1,000,000.

Vision Coverage Employees can get refunds up to $200 per 24

months for prescription glasses, contact

lenses, laser

eye surgery and eye-related medical

assistance.

Dental Insurance Dental coverage for preventive dental care,

orthodontia services, and reconstructive

 surgeries.

Retirement Savings Many investment options to opt from for

Plan retirements

Equity Incentive Plan –

Employee Stock Employees can get 15% discounts to the

Purchase Plan market price on all Telsa motors products for

Stock Purchase.

Short Term Disability ● Tesla pays 66.7% of employee’s

salary for up to 17 weeks in Short

Term Disability.

● Maximum of $1,000 per week

Long Term Disability ● Tesla pays 60% of the

employee’s salary in case if an

employee is unable to work due to

medical incapability
 ● Maximum benefit – $5,000

Accidental Death & ● Beneficiaries can get a lump-sum

Dismemberment compensation of two years’ salary

Insurance of employees

● Maximum Benefit – $1,000,000.

Business Travel Extensive travel insurance for traveling for

Insurance business

Employee Discount Employees can get up to 35% off discount on

all Tesla motors products and services

2.Amazon
Employee Benefits

Along with a starting pay of at least $15 per hour—more than double the
federal minimum wage—Amazon offers a range of great benefits that
support employees and eligible family members, including domestic
partners and their children. These comprehensive benefits begin on day
one and include health care coverage, parental leave, ways to save for the
future, and other resources to improve health and well-being.
Amazon’s Compensation System
● Positioned pay at above-market compensation, but did so
exclusively through equity, paying below-market salaries and
no cash bonuses – that’s right – no cash bonuses, except sign-
ons for new hires
● Granted RSUs exclusively for the equity layer, which is
allocated on a differentiated and episodic (i.e., not annually)
basis to those who have demonstrated value-creating
performance and have the potential to contribute to the future
long-term success of the company
● Required longer-than-usual vesting, e.g., 5 or 6 years to that
equity. For example, a typical “mega-grant” made to an
executive may carry 6-year vesting, with 0% vesting in the first
two years, 37.5% vesting in the third year, 12.5% vesting in the
fourth year, 37.5% vesting in the fifth year, and 12.5% vesting
in the sixth year
● Applied the system to all employees, creating alignment up
and down the organization

Performance Benefits

Amazon has introduced Amazon STEP that is a performance-based

benefits program designed to helps sellers accelerate their growth on
Amazon.in. STEP simplifies the seller experience by providing customised
and actionable recommendations to improve key customer experience
metrics and unlock benefits across multiple levels like "Basic", "Standard",
"Advanced", "Premium" (consistent performers at “Premium" will be
considered for "Premium Plus" and "Premium Pro"). These benefits include
online and offline training, waiver in weight handling fees and lightning deal
fees, faster disbursement cycles, priority seller support and free world-class
account management. Using customised and actionable recommendations,
STEP enables sellers to improve their performance on key seller
controllable customer metrics like cancellation rate, late dispatch rate and
return rate, among others. As sellers improve their performance, they can
unlock benefits associated with each level.

3. APPLE INC.

Employee Benefits

Apple employees get an annual 25% discount when they purchase an

iPod, computer, or iPad. Every three years, workers can get $250 off an
iPad or $500 off a Mac. Apple software is 50% off. The company also offers
other discounts for family and friends, depending on the product.

Apple allows mothers to take four weeks of paid leave before giving birth
and 14 weeks after. Non-birth parents get six weeks of paid time off,
according to TIME.

Compensation
The average Apple executive compensation is $235,778 a year. Apple's
highest paid executives include: Johny Srouji $24,162,390 and Daniel J.
Riccio $24,146,050.

The median estimated compensation for executives at Apple including

base salary and bonus is $219,096, or $105 per hour.
Comparably has 2 executive salary records from Apple employees
including job titles like VP of Engineering and VP of Advertising.

(C) IMPLICATIONS

Compensation and Employee Benefits

1.ON EMPLOYEE PERFORMANCE

Compensation is the remuneration received by an employee in return for

their contribution to the organization. It is an organized practice that
involves balancing the work-employee relation by providing monetary and
non-monetary benefits to employees. Compensation includes payments
such as bonuses, profit sharing, overtime pay, recognition rewards and
sales commission.

Performance management starts with discussing the job duties,

responsibilities and expectations with candidates during the recruitment
and selection process. Ideally, a job posting should contain a summary of
the job, the qualifications the company is looking for and what the company
expects from employees in that particular role. Methods of employee
compensation Some of the most common methods of employee
compensation which as impact on employee performance are as follows,
Individual incentives: Pay incentives are associated with increased
performance and productivity. Bottom line increases in quantifiable
productivity are associated with individual incentives; with studies showing
increases on average of 30 percent when incentive programs are
introduced.

Merit pay: This involves giving employees bonuses or other compensation

when they perform well. It is the most widely used method for
organizations. Research studies show that there is some support that merit
pay is associated with increased performance, though many studies failed
to demonstrate a definitive impact of this system on performance.

Profit sharing: This involves rewarding employees when profitability

targets are met. Studies suggest that they do have an impact on
performance. However, employees may be less motivated by this type of
reward as compared to other reward systems, because they may not see
the connection between their own efforts and increased profits. Profit
sharing rewards are also often disseminated in the future (e.g., at
retirement) and can therefore be less motivating than immediate rewards.

Stock plans: This involves offering employees the opportunity to buy stock
in the company at a fixed rate. Studies investigating the impact of this
approach for middle and upper management show positive results.

2.ORGANIZATIONAL LEVEL

1.The positive direct effect of the compensation variable on organizational

commitment

2.The positive direct effect of career development variables on

organizational commitment

3.The positive direct effect of work environment variables on organizational

commitment

4. job satisfaction with organizational commitment

5. compensation for job satisfaction

6.career development towards job satisfaction

7. work environment towards job satisfaction

Performance Benefits
Individual Related

1. It Can Give Employees Something To Work Towards

There is rarely anything for employees to work towards in the workplace

that isn't their salary. Although it can be argued that some employees may
be working towards promotions or being given more responsibilities, those
in roles with little chance of movement in the company can feel
downtrodden.

2. Make Employees Feel Valued

As stated above, many employees don't feel valued in their roles. This is
understandable as when there are no perks or benefits on offer it can feel
as if they are simply working to increase the salaries and bonuses of
directors. This isn't a good way to feel in the workplace: feeling as if you are
part of a team and that your role really is valued is hugely important. Often
in large corporations, employees can feel as if they are simply just another
number.

3. Employee Benefits May Genuinely Improve The Lives Of Employees

Many people, especially those in low salaried roles, can struggle financially
in this ever-changing economy. This means that certain employee benefits
may be very valuable to them. Some people may rely on childcare options,
or flexible working patterns to be able to work. It is important to recognize
that some employee benefits may greatly improve the lives of your staff.

4. They Can Positively Impact Health And Wellbeing

Although it may sound cliche, a healthy team may be a happy team. Many
companies offer gym memberships or memberships to clubs that focus on
health and wellbeing. This is a perk that can greatly improve productivity in
staff. Exercise does many wonderful things to the body that increase mood
and focus, so offering this perk to your employees is likely to show in their
performance at work.

5. Boosts Morale

Anyone that has ever attended an event regarding success in the

workplace will know the importance of morale. A positive workforce is likely
to yield positive results, and using benefits and perks is a great way to
ensure this. It is paramount that companies do all they can to promote
happiness, confidence and overall job satisfaction among their employees.
If employees feel they are valued and that their personal needs are being
met, they are likely to perform better.

Organizational Level

1. Consistency.
The selection of employees for promotion, transfer, or other action should
be more consistent. The right person — or a right person — should be
matched with the right job more often.

2. Motivation.

All the organization’s employees (as well as supervisors and managers)

should be more highly motivated. Objective performance appraisal will
identify those who are outstanding, and management — applying
promotion, transfer, and other policies — will reward them.

3. Morale and retention.

More highly motivated employees are likely to be more loyal, as well, so

that management will have better success retaining valuable employees
even as the nation’s workforce becomes more mobile.

4. Organizational impacts.

Those who do research on human behavior stress that individual

employees will grow in maturity and responsibility if their efforts are
accurately judged and rewarded. The organization should see daily
benefits — including financial — from having more responsible people
throughout.

5. Training needs.

While accurate evaluation is most often recommended for its role in making
“good employees better,” it has a valuable remedial use as well. Evaluation
can spot employees who need training — and not all of them will be recent
hires.

6. Firing risks.

Finally, employees who are sufficiently weak that they should be dismissed
can be spotted with more certainty under an evaluation system. Perhaps
more important, management may be more willing to dismiss an
inadequate employee if an objective evaluation system can be pointed to
as identifying the inadequacy.

REFERENCES
https://study.com/academy/lesson/aligning-recruitment-strategy-with-
organizational-strategy.html

https://www.clearpointstrategy.com/strategic-performance-management/

https://www.naturalhr.com/2019/12/12/6-benefits-of-performance-
management/

https://www.clearreview.com/why-performance-management-
important/#:~:text=Performance%20Management%20Helps%20to
%20Boost,boosting%20productivity%20and%20maximising%20ROI.

https://thethrivingsmallbusiness.com/compensation-strategy/

https://smallbusiness.chron.com/strategic-plan-employee-compensation-
benefits-15613.html

https://smallbusiness.chron.com/employee-benefit-strategies-776.html

https://talentedge.com/articles/benefits-performance-management-
organisation/

https://hbr.org/2020/02/how-tesla-sets-itself-apart

https://www.boston25news.com/news/trending-now/6-most-impressive-
benefits-offered-to-amazon-employees/733189499/

https://www.forbes.com/sites/robinferracone/2019/04/23/dare-to-be-
different-the-case-of-amazon-com/

https://sell.amazon.in/grow-your-business/step.html
https://www.hrkatha.com/culture/fancy-perks-and-benefits-apple-
employees-enjoy/#:~:text=Apple%20employees%20get%20an
%20annual,discount%20is%2050%20per%20cent.

https://www.researchomatic.com/compensation-and-benefits-system-apple-
inc-perspective-183422.html

https://smallbusiness.chron.com/benefits-employee-stock-options-
company-2842.html

https://www.jstor.org/stable/30040666

https://www.emerald.com/insight/content/doi/10.1108/09556219510098064
/full/html

https://www.hrtechnologist.com/articles/compensation-benefits/5-reasons-
employee-benefits-increase-staff-performance/