This coursework examines the concept of total rewards in the context of today's competitive business environment. There are many different total rewards concept in the existing literature and therefore the primary focus must be to choose the most appropriate concept and to examine it and explain its benefits. Furthermore there are important questions whether the total rewards concept can easily be adopted by organizations in practice and to which extend this theory can be valuable for the organizations which are developing strategies to stay competitive in the globalizing business world of the 21st century. Critique against this model are hardly to be found in the literature, due to the reason that this is a very flexible model which can be adopted in many different facets balanced with the needs of each unique organization, the main reasons for its increasing level of prominence will be explained in the process of this essay.
Companies need to develop total rewards or reward packages that satisfy people to stay competitive or establish a competitive advantage. These total rewards include all the non monetary and monetary rewards allocated by a company to motivate, attract and retain employees. The success of total reward systems relies on connecting organizational strategies and objectives of compensation. The employees should be encouraged to work in a way that benefits the firm and its stakeholders. (Mathis R. and Jackson J., 2011,Human Resource Management, South-Western, USA, P. 359-361.)
[...] Furthermore the benefits illustrated in this work point out that a correct use of this approach generates a win-win situation for the employer and its employees. The employees are getting an attractive and satisfiying reward system with the possibilities to grow as individual, to get a positive work experience and total pay including base pay, benefits, incentives and recognition. The employer gets security to attract and bind talented and qualified individuals to increase the motivation of its workforce and therefore to increase the profitability of the whole firm. [...]
[...] In the framework of total rewards this is a key leadership task to increase the firm´s performance. People have different perceptions of the value of work and they show great effort when they believe their work is worthwhile and has meaning. There are jobs with a high public reputation but managers can also create a high morale environment which motivates the employees. In today´s labor market there is an increasing demand for professionals and a challenging and interesting job is a necessity to provide them with an optimal, satisfying intrinsic reward package and to motivate them. [...]
[...] In practice the elements of total rewards are interrelated and have influence on each other. This is the basis of the total reward models which have been developed over the past years. Over the past years several total rewards models have been developed by many academic authors, consulting firms and the research non-forprofit organization WorldatWork. A well known and very detailed model is the Hay Group Model of Engaged Performance which will be used in the process of the work to explain the total rewards theory. [...]
[...] In literature, recognition needs are often explained with Maslow´s hierarchy of needs, defined as the employees need for prestige and self estime to get satisfaction in a job. (Maslow Motivation and personality, Harper & Row, New York) Peter Boxall and John Purcell defined communication in Human Resource Management as " Employee voice is the term increasingly used to cover a whole variety of processes and structures which enable and sometimes empower employees directly and indirectly to contribute to the decision making in the firm." (Boxall and Purcell Strategic Human Ressouce Management, Routledge, London) Giving employees a voice might be rewarding and gives the people a feeling that the work they do contributes to the success of the whole organisation. [...]
[...] 360-363.) In the context of a total rewards approach, financial rewards are a requirement for the operativeness of a total reward package. In accordance with Herzberg´s two factor model of motivation money is a “hygiene factor” which means that it is a potential dissatisfier if it is not present in appropriate amounts. (Wall T.D. et al Herzberg's Two-Factor- Theory of Job Attitudes: A critical Evaluation And Some Fresh Evidence. In: Industrial Relations Journal, Vol No. 3.) The expectancy theory of Porter and Lawler states that motivation is strong if people can expect that their contributions and efforts will produce remunerative rewards. [...]
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