Mada Alhowishel – 5HR03 - 88197419

Task One

)AC 1.1(

A thorough grasp of the complex interactions between performance management and organizational
culture's reward principles is crucial for evaluating these concepts. Performance management refers to
the methodical procedures used to evaluate and improve employee performance, whereas
organizational culture refers to the established norms, values, and behaviors that influence employee
interactions. It is impossible to overestimate the influence of these elements on how effective reward
systems are.

Among incentive principles, transparency stands out as a cornerstone that necessitates clear
communication of the factors influencing incentives. Increased employee trust and a sense of equity are
fostered by this transparency, which eventually increases motivation and job satisfaction (CIPD, 2022).
Further highlighting the beneficial effects of transparent pay practices on engagement and organizational
success is research by Clegg et al. (2020).

The concepts of justice and consistency are equally essential. Fairness is ensured by reward systems that
are based on objective standards, and employees are treated fairly when they are treated consistently in
similar situations. This dedication to fairness raises spirits and dampens ill feelings (CIPD, 2022). Fair and
consistent incentive programs are associated with higher employee satisfaction and engagement,
according to Gomez-Mejia et al. (2019).

Limitations: It's critical to evaluate related constraints. When incentive components are proprietary or
complex, transparency becomes problematic. Overly openness could lead to expectations without
matching performance, which would lower motivation. Likewise, even though consistency and fairness
are admirable traits, they might ignore variances in an employee's performance, which could make high-
achieving employees feel underappreciated.

Performance management and organizational culture work together to create a performance-oriented

culture that inspires workers to achieve company objectives through performance-based rewards (CIPD,
2022). According to Delaney and Huselid (2021), businesses with strong performance cultures are more
profitable and productive.

Importantly, strong organizational cultures and efficient performance management lead to higher levels
of employee engagement and retention (Wright et al., 2018), which makes hiring and retaining top talent
easier. In summary, assessing incentive principles requires a thorough grasp of organizational culture and
performance management.

)AC 1.2)

1. An Exemplar Reward Policy: The Performance-Based Bonus Policy

The performance-based bonus policy, which involves paying employees more depending on their
individual or team accomplishments, is a prominent example of a reward policy. Inspiring and rewarding
extraordinary performance is the main objective (Jones & Perkins, 2020).

2. GA Pensions Implementation: Examining the Performance-Based Bonus Policy's Execution

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A closer look at GA Pensions' performance-based bonus policy implementation process identifies several
crucial steps:

2.1 Planning the Execution

• Involving Important Parties: Developing a thorough plan for implementing the performance-based
bonus policy requires close coordination between senior management and the HR department at GA
Pensions.
 Role of Line Managers: At GA Pensions, line managers are essential in determining what performance
indicators and standards are pertinent to their teams.
 Policy Considerations: Depending on whether the strategy is at the higher or median quartile of
compensation benchmarks, it should take into account factors like current compensation levels,
budgetary constraints, and alignment with those benchmarks (Jones & Perkins, 2020).

2.2 Requesting Employee Feedback

• Active Employee Involvement: In order to get input, improve engagement, and take into account
employees' viewpoints, GA Pensions should actively involve employees in the policy design process.
• Policy Considerations: It is essential to follow legal requirements during the design phase, such as
adhering to anti-discrimination laws and meeting minimum pay rates, like the national minimum wage
in the UK (The National Minimum Wage Rates - GOV.UK, 2023).

2.3 Integration with Other HR Practices

• Collaboration with Key Stakeholders: It takes the cooperation of line managers, important teams, and
GA Pensions' HR department to successfully integrate the performance-based bonus policy with other
HR practices.
• Policy Points to Remember: According to Jones and Perkins' (2020) recommendations, it is imperative
that the policy be in line with pay structures, job evaluations, and pay progression policies.

2.4 Evaluating Efficiency

• Assessment Group: Senior management and the HR department of GA Pensions periodically evaluate
the efficacy of the policy.
• Staying Current: In accordance with Jones and Perkins's (2020) recommendations, ongoing
assessments and revisions are necessary to preserve competitiveness in the labor market and adhere
to changing legal requirements.

(AC 1.3)

The way that Home International approaches reward is greatly influenced by the relationship that exists
between individual performance and organizational performance. It is imperative to take into account
the ways in which individuals and wider organizational dynamics impact decision-making when
examining the compensation scheme of the company.

In the past, companies depended on salary to draw in talent, benefits to keep staff members on board,
and bonuses and incentives to spur them on. However, things have changed, and people now value a
wider range of advantages than just financial ones. According to Rose (2018), people are motivated by
both monetary and non-monetary incentives, and their preferences change depending on the state of
the labor market. While some people place a higher value on financial compensation, others might place

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a higher value on having a close alignment with the company's mission and core values. This underscores
the need for Home International to adapt its incentive program accordingly.

Performance-based incentives are also heavily impacted by the organization. According to Howlett
(2020), putting in place a performance-based incentive scheme highlights how crucial it is that every
worker achieves individual goals that are in line with the organization's overarching goals. These
incentives, which might include pay raises or bonuses decided upon by performance evaluations, might
be linked to Home International's overall performance.

The efficacy of Home International's compensation program is critical to its overall success. This program
is essential for drawing in top talent as well as keeping employees and inspiring them to support the
goals of the business. As such, it is critical to create a customized rewards program that satisfies
employees' varied needs and preferences while also being in line with business objectives. As a people
professional, your responsibility is to craft a compensation plan that fosters equity and transparency,
fostering a productive and positive work environment.

(AC 1.4)

Benefits, which include a range of provisions like paid time off, health insurance, risk coverage, pensions,
and allowances, are essential for drawing and keeping talent in an organization. Considering the unique
benefits that come with each one, it is essential to choose them according to the goals of the company
and the preferences of the staff.

One well-known benefit that guarantees employees' financial security after retirement is pensions. Some
governments require companies to provide pension plans, which combine employer and employee
contributions to create a retirement account. This promotes consistent income support for retirees and
their dependents as well as long-term financial stability. Pensions are essential to maintaining retirees'
standard of living, claims Admassie (2019).

Vacation and leave days are equally important benefits because most companies offer paid time off for a
variety of reasons, such as adoption, maternity, paternity, and loss of a loved one. This strategy fosters a
sense of camaraderie among employees, improving their general wellbeing and, as a result, their
productivity. According to Admassie (2019), having enough vacation time allows workers to take care of
personal matters without sacrificing their work commitments, which boosts job satisfaction and lowers
absenteeism.

Benefits related to risk and healthcare have a major impact on increased worker satisfaction and
productivity. These benefits protect employees' physical and mental health and include financial aid, life
insurance, paid sick leave, subsidized eye care, and gym memberships. As per Admassie (2019), offering
healthcare and risk benefits is like making an investment in the general well-being of the labor force.

Organizations may provide extra allowances like housing, transportation, or meal subsidies. Workers who
might otherwise be discouraged by the associated costs of housing or transportation can be drawn in by
these benefits. In addition to promoting responsible financial practices, they also help staff members
attain a more favorable work-life equilibrium (Admassie, 2019).

To sum up, businesses need to carefully select benefit packages that match employee preferences and
support organizational goals.

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(AC 1.5)

Extrinsic and intrinsic rewards can improve employee engagement and long-term organizational
performance in a variety of ways. When given externally and consisting of observable monetary benefits
like bonuses, pay increases, and benefits, extrinsic rewards work well to inspire workers, especially those
who are new hires and may need outside encouragement to adapt (Khern-am-nuai et al., 2018). It is
crucial to remember that extrinsic rewards lose their effectiveness over time if they are not continuously
increased.

On the other hand, intrinsic motivation comes from the intrinsic worth of the job and the psychological
advantages it provides for workers (Khern-am-nuai et al., 2018). These rewards, which are based on
employees' individual efforts and internal motivation, dramatically increase intrinsic motivation and
promote long-lasting behavioral changes and enhanced performance. According to Khern-am-nuai et al.
(2018), employees who exhibit problem-solving, creativity, and self-management tend to exhibit positive
emotional responses, which in turn motivates them to make greater contributions to the company.

Because extrinsic benefits have the potential to negatively affect employee motivation and productivity,
they should be carefully considered. Employee demotivation, unhappiness, and decreased performance
can result from inadequate or unfair compensation in comparison to peers or industry standards (Cheng
& Brown, 2017). According to Deci, Koestner, and Ryan (2001), an overindulgence in extrinsic rewards
can potentially erode intrinsic motivation by instilling a sense of entitlement in workers, even in
situations where corporate objectives are not achieved.

However, there are drawbacks to intrinsic rewards as well. Their consequences can differ amongst
individuals and functions within an organization, and their measurement can be complex. Furthermore,
depending on the specifics of their positions, some workers might not have access to intrinsic rewards.
Thus, it is essential to implement a balanced approach to incentive management that includes both
extrinsic and intrinsic rewards in order to improve employee engagement, motivation, and performance.
Taking into account the advantages and disadvantages of each reward type, this strategy aims to
maximize their combined long-term effects on employee engagement and organizational success.

(AC 2.1)

We will assess the GA Pensions reward system's business context through a thorough PESTLE analysis,
focusing on variables that affect the incentive strategy. It is imperative to take into account the possible
effects on the incentive methodology of elements related to politics, economy, society, technology, law,
and the environment.

1. Political Aspects
• Influence on Reward Strategy: GA Pensions's compensation structure is heavily impacted by political
factors, including modifications to tax and labor laws. Changes in tax laws, for example, may have an
effect on how employee benefit plans are created (CIPD, 2022).
• Evaluation: GA Pensions must keep a careful eye on political developments and make any necessary
modifications to their compensation plans in order to ensure compliance with changing legal and tax
regulations.
2. Economic Factors:
• Influence on Reward Strategy: The affordability and competitiveness of reward packages can be
impacted by economic factors, especially when taking regional salary differences and inflation rates

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into account. GA Pensions may require incentive programs that are both affordable and appealing
during economic downturns (CIPD, 2022).
• Evaluation: In order to stay financially stable and competitive, GA Pensions must periodically evaluate
changes in the economy and make any necessary adjustments to benefit plans.
3. Social Aspects:
• Impact on Reward Scheme: Employee perceptions of rewards are impacted by shifting demographics,
workplace preferences, and social expectations. As societal norms evolve, benefits like health programs
and flexible work hours may require adjustments (CIPD, 2022).
• Evaluation: GA Pensions should be mindful of societal changes and consider employee preferences
when developing their reward program to enhance employee satisfaction and retention.
4. Technological Factors:
• Influence on Reward Strategy: Improvements in technology make it possible to manage incentives and
performance reviews more effectively. Additionally, they enable customized incentive programs (CIPD,
2022).
• Assessment: In order to improve data-driven decision-making, expedite the incentive process, and offer
personalized rewards based on the needs of specific employees, GA Pensions ought to make
technological investments.
5. Legal Factors:
• Impact on Reward Scheme: Labor laws, minimum wage policies, and equity regulations limit strategies
for employee rewards. Respecting legal obligations is necessary to stay out of trouble with the law
(CIPD, 2022).
• Assessment: GA Pensions needs to make sure that its pay plan complies with all applicable legal
requirements, including minimum wage statutes and anti-discrimination laws.
6. Environmental Factors:
• Influence on Reward Strategy: Growing awareness of environmental sustainability may lead to the
inclusion of eco-friendly benefits or incentives in reward packages (CIPD, 2022).
• Evaluation: GA Pensions should explore ways to implement sustainable rewards, considering the level
of environmental awareness among stakeholders and staff.

(AC 2.2)

It is essential to carry out a thorough analysis that integrates knowledge from both academic research
and real-world applications in order to collect benchmarking data and track progress for informed
development (Fan & Yan, 2010). Surveys and trade journals are frequently used, but it's important to
understand and work around their inherent limitations.

Surveys: A Common Source for Benchmarking

Because they provide an organized method, surveys are frequently used to gather benchmarking data.
Their efficacy is contingent upon variables such as sample size and question structure, which have a
substantial impact on response rates, data dependability, and trustworthiness (Fan & Yan, 2010).

Publications: Abundant Data Sources

The Annual Mercer Total Remuneration Survey and the UK's Office for National Statistics (ONS) are two
examples of industry journals and research papers that are useful sources of benchmarking data

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(Mercer, 2022; ONS, 2022). These sources are rich, but they might not be specific enough for some
industries or areas, which makes them difficult to access and use accurately.

Audit Companies: An Objective Perspective

Working with audit companies like Deloitte offers a neutral way to obtain benchmarking information,
particularly when it comes to budgets for incentive programs and employee perks (Deloitte, 2017). But
this approach might be more expensive and might not provide cross-sector diversity.

Limitations and Considerations

It is critical to recognize and comprehend the particular constraints connected to each strategy. For
example, low participation rates and response bias can affect surveys' ability to produce data that is
representative. Publications might not offer up-to-date data and might not be geographically or
business-specific. Audit firms' benchmark data might not include all industry sectors and might be more
expensive.

Conclusion:

In conclusion, it is critical for human resources professionals and organizations looking for benchmarking
data to thoroughly investigate all available methods, such as publications, surveys, and working with
audit firms. It highlights the necessity of a strategic and comprehensive benchmarking approach to
identify and manage the advantages and disadvantages of each approach.

(AC 2.3)

In order to create comprehensive organizational reward plans based on insights, businesses need to take
a more diverse approach than just benchmarking. Robust reward schemes are developed through the
integration of several essential elements:

1. Pay Scales and Work Assessment: Integrating pay scales and job evaluation procedures is an essential
first step. A fair and competitive compensation structure that conforms to market standards is
established through job evaluation, which evaluates the relative worth of tasks within the organization
(Adams, 2022).
2. Financial Rewards: Regular pay increases, performance-based salary advancement, and performance-
linked pay raises are examples of financial incentives that are essential components of compensation
packages. Long-term financial security for employees is ensured by placing a strong emphasis on
pension plans in the rewards strategy (CIPD, 2021).
3. Non-Financial Rewards: Non-cash benefits are becoming more and more important. Examples include
programs that help employees grow in their careers, mentorship schemes, and apprenticeships that
help them develop their skills and future prospects. Employee assistance programs help people
overcome obstacles in their personal or professional lives, which promotes a healthy work-life balance
(Jones & Brown, 2023).
4. Personalized Advantages: Benefits customization is essential for drawing in and keeping talent. Certain
companies provide special benefits like paid sick leave, childcare reimbursements, and allowances for
housing or cars. But it's crucial to make sure that every perk fits the company's mission and basic
values while also being reasonably priced (Adams, 2022).
5. Data-Driven Decision-Making: Using benchmarking data that is in line with current market trends is
essential to designing competitive pay plans. Organizations can stay competitive by integrating external

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data on pay scales, salary increases, and benefits. Finding the ideal balance between monetary and
non-monetary benefits while keeping costs under control is made easier with the help of this data-
driven approach.

In summary, harmonious integration of pay structures, job evaluation, financial and non-financial
rewards, and customized benefits is required for effective organizational reward packages (Adams,
2022). This method guarantees a comprehensive plan that fits the company's overarching goal and the
dynamics of the market.

Task Two - Report Section Two

(AC 2.4)

Understanding legislative requirements is crucial for HR officers when it comes to rewarding staff. In any
country, these laws are designed to ensure fairness, equity, and dignity in the workplace. Let's explore
can help HR officers give proper compensation and rewards to staff:

Equal Pay and Reward: That people in the same job must get the same reward no matter who they are
or where they are from. It is an indispensable measure for workplace justice and also a defensive fort
against discrimination on any ground which engenders protection under law: age, sex, race or disability.
The United Kingdom's Equality Act of 2010 is a key example in that respect. For example, the Act states
that the employer shall conduct a pay audit to ascertain and monitor the economic position of the old
firm. It also stipulates communication on both rewards at work and their consequences (GOV.UK 2015).

By knowing and operating in line with equal pay and reward law, human resource managers can create a
context where staff members point to them as valued associates--no matter what personal attributes
they have. This is conducive to building an environment of human rights within the company and a more
pleasant climate works well. Staff moral, satisfaction and efficiency therefore will increase.

Minimum Pay: Establishes a baseline for ensuring that workers receive fair and adequate compensation
for their labor. It serves as a safeguard against exploitation and helps maintain a decent standard of living
for employees. In the UK, the National Minimum Wage Act 1998 sets minimum hourly rates that
employers must adhere to. As of April 2024, the National Living Wage (NLW) for workers aged 21 and
over is £11.44 per hour, and the National Minimum Wage (NMW) for workers aged 18 to 20 is £8.60 per
hour (BBC, 2024).

HR officers have an essential role in ensuring compliance with minimum wage laws through regular
adjustments of salary levels to meet or exceed these legally mandated minimum limits. By giving workers
competitive pay that is fair and competitive themselves, HR officers contribute to higher levels of job
satisfaction, engagement and retention within the organization.

Working Hours: Promotes work-life balance and employee welfare by setting limits on working hours,
mandating rest breaks, and enforcing paid annual leave entitlements. It is essential for safeguarding
employees' physical and mental well-being and preventing burnout. For example, in the UK, the Working
Time Regulations 1998 govern these aspects. For instance, under these regulations, workers are entitled
to a minimum rest break of 20 minutes if their working day exceeds six hours, and a minimum of 11
hours' rest between working days (UK Government, n.d.).

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HR practitioners can help companies comply with working hours through measures like putting in place
rules to track and supervise employees' working hours and encouraging a culture of work life balance. By
paying more attention to employee welfare, HR practitioners contribute to a healthier and more
successful workforce, which ultimately leads to higher levels of organizational performance and resulting
success.

(AC 3.1)

Assessing different approaches to performance management reveals various methods that can
effectively enhance employee productivity and organizational effectiveness. Two prominent approaches
are performance evaluations and 360-degree feedback.

Performance Evaluations:

performance Evaluations are a traditional method approach to performance management, involving

setting clear goals, maintaining open communication, and providing timely feedback to employees
(DeNisi & Murphy, 2017). A major strength of performance evaluations is their structured nature,
allowing managers to evaluate individual performances against pre-determined standards. Within this
framework, employees also know what is expected of them and where they stand in relation to those
expectations, both of which makes motivation easier to maintain than Greenberg (1986) might
otherwise suggest.

However, performance evaluations also have their limitations. They are subject to personal biases and
subjectivity, as managers use their own perceptions and interpretations when assessing staff
performances. (DeNisi & Murphy, 2017) Furthermore, performance evaluations are often made on an
annual or semi-annual basis that may not provide timely feedback for employees to make necessary
adjustments in real time.

360-Degree Feedback:

This kind of approach can see all of an employee's performance in radiant detail. Drawing on the
feedback of other people who work with them - associates, underlings, and superiors-this
comprehensive approach covers strengths and weaknesses from multiple perspectives, showing what
really needs improvement. 360-degree feedback calls for a feedback culture in which everyone feels free
to give opinions: It thus becomes an integral part of the working system because people are always
learning and developing.

But, like anything else, 360-degree feedback also has its problems. To put this approach into practice
requires large amounts of time and resources in gathering feedback from multiple stakeholders
effectively analyzing data collected as raw material for future work (DeNisi & Murphy, 2017). Also, the
anonymity of feedback sources may produce unconstructive or unclear feedback preventing
improvement in individual performance (DeNisi & Murphy, 2017).

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Conclusion:

In conclusion, organizations should select the most suitable performance management strategy based on
their unique requirements and objectives, considering the benefits of performance evaluations and 360-
degree feedback in enhancing employee performance and organizational success.

(AC 3.2(

In facilitating fair and effective reward decisions, people professionals play a crucial role in supporting
line managers. Let's review two key aspects of their support:

1. Training and Development: People professionals are pivotal in providing line managers with necessary
training and development opportunity to improve their skills in making consistent and appropriate
reward judgments (Russell et al., 2018). Comprehensive training equips line managers with the
necessary knowledge and tools to assess employee performance objectively, understand what rewards
decision imply, navigate through the complexities of performance management systems. With training
programs tailored to the needs of line managers, rewarded with of course a decision by HR professionals
is to let this group make informed and fair Once again.

Further, continuous training enables line managers to improve their communication skills, conduct good
performance reveiws, provide constructive feedback Structured data and set clear performance goals
(Gerhart & Fang, 2014). Through ongoing learning opportunities, line managers can refine their abilities
to make fair and transparent reward judgments, thereby contributing a positive environment of
appreciation for the working individual.

2. Promoting Communication and Decision-Making: In supporting the line manager to make fair and
consistent reward decisions, the key is effective communication. People professionals encourage open
lines of communication between line managers and staff members, ensuring that performance
expectations are clearly expressed, objectives are established, and feedback is respectfully given
( Gerhart & Fang, 2014). Transparent communications educate employees about the reasons for reward
decisions and can thus lead to a greater sense of personnel fairness throughout the workplace

Secondly, people professionals encourages line managers decision-making autonomy by equipping them
with the necessary tools and resources to shield employee performance, engage in meaningful
discussions, take valuable feedback ( Russel et al., 2018). Through methods such as opinion surveys of
employees and 360-degree feedback evaluations, line managers can capture an invaluable snapshot of
employee performance hypertext link and tailor reward decisions accordingly

In essence, people professionals serve as strategic partners to line managers, offering guidance, training,
and support to ensure that reward decisions are fair, transparent, and aligned with organizational
objectives.

(AC 3.3)

In order to ensure that reward decisions are in line with an organization's overall rewards strategy, line
managers play a crucial role. Their main duties involve making certain that workers receive fair
compensation for their work and appropriately acknowledging their contributions to the organization. In

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order to do this, line managers use a variety of techniques to evaluate employee performance and
choose the right incentives.

One important method that line managers use to determine how effective their employees are is the
performance evaluation process. Russell et al. (2018) state that line managers evaluate employees' work
on a regular basis and provide constructive criticism at periodic or annual evaluations. By utilizing
instruments such as 360-degree feedback and Key Performance Indicators (KPIs), they acquire a
thorough grasp of every person’s ability and contribution. This data is essential to the decision-making
process regarding rewards because it helps line managers recognize and reward workers who make a
substantial contribution to the goals of the company.

Line managers consider the organization's policies and overall incentive strategy when determining
rewards. As per the CIPD (2022), line managers are responsible for executing the incentive policies and
procedures of the organization. Their responsibilities also include coordinating the awards' equitable and
transparent distribution in accordance with the organization's principles, aims, and objectives. When it
comes to informing employees about the awards that are available and the requirements for receiving
them, line managers are essential.

In conclusion, line managers are critical players in the process of determining rewards based on
organizational reward strategies. Their use of a variety of techniques for goal-setting, performance
evaluation, and feedback-giving is crucial in inspiring workers to put forth their best effort and contribute
to the organization's success as a whole.

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