Y SPY

By paul prescott

A book about the ymca written for the childen of the ymca. The characters and places in the book are Based on real people and animals, different jobs at the ymca and facilities at the ymca.

• Language: English
• Publisher: paul prescott
• Release date: May 29, 2017
• ISBN: 9780692931608

paul prescott

i like to watch tv .and ride my bike

Book preview

CHAPTER 1

INTRODUCTION TO STRATEGIC REWARDS

¶1.0 Rewards and the employment relationship

At its most fundamental, the employment relationship is based on an exchange. While there is considerable variability and potential for conflict regarding the nature of this exchange, in essence, it comes down to what rewards an employee expects to receive from an employer in return for their time, capacity for labour and contribution to organisational success, and what an employer is prepared to offer and expects to receive in turn.

Typically the agreements and expectations regarding this exchange relationship are expressed formally in organisations via individual employment agreements or collective agreements or contracts, together with remuneration policies. However, such documents typically fail to capture the more informal or implicit beliefs that individual employees hold regarding the terms of the exchange in the employment relationship. These psychological contracts encapsulate the individual’s belief in mutual obligations between that person and another party, such as an employer.¹ For some individuals, these psychological contracts will focus on the more short-term transactional aspects of the employment relationship dealing with the exchange of material rewards, such as pay, in return for their time and compliance.² For other employees, the exchange emphasis may be on the longer-term emotional and relational aspects of the employment relationship,³ where, for example, having job security and friends at work, together with career development opportunities, are exchanged in return for loyalty, organisational citizenship behaviours (OCBs) and other aspects of employee engagement. Such implicit expectations about obligations and expected rewards manifest themselves in the everyday conversations and mundane interactions that occur between managers and other employees.

For much of the history of employment relations in the Western developed economies, determining the terms of the exchange has been a highly contested ground, characterised by conflict, mutual distrust, and the expectation that what is gained by one party will be at the expense of the other. Employment has therefore been seen as a win–lose relationship rather than one based on a mutuality of interests. It has been a history that assumed that the interests of employers and their managerial agents were mutually exclusive to those of employees; a history compounded by management’s desire to minimise labour costs in order to increase labour productivity and maximise the wealth created through the labour process. Such an approach to employment creates a pervasive tension underpinning the field of remuneration, organised labour-management relations, and the level of trust and interaction that exists between managers and non-managerial employees within an organisation.

Ideologically, this book is about shifting the conversation in three ways: (1) from one of conflict to one of mutual benefit between employees and the organisations they work for; (2) from a focus on techniques to a more strategic view about how the employment relationship is managed; and (3) from a focus purely on pay, to a broader consideration of rewards. This is done by shifting the strategic focus beyond narrow considerations of labour cost control and the need to buy industrial peace, to a wider focus on how rewards generally, and remuneration in particular, can enable organisational competitive advantage and other strategic needs of organisations, while also fairly and equitably meeting the needs of employees.

Footnotes

¶1.1 Rewards and the search for competitive advantage

In part, the shift from a short-term win-lose cost-control approach to employees has been driven by some major shifts in managerial thinking, including the dominance of resource-based thinking in strategic management, and the development of what has come to be called Strategic Human Resource Management (SHRM).⁴ It has also been driven by changes to the competitive landscape of contemporary business. The strategies for competitive success have become increasingly generic and focus on concepts such as quality, customer satisfaction, market dominance, responsiveness and/or flexibility (among others). These concepts and strategies are no longer novel, and any competitive advantage gained by a firm through employing them will probably be short-lived.

Sources of new advantage, such as untapped markets and regulatory protection, are also increasingly scarce and fleeting. Furthermore, as consumers demand more quality for less money, many firms, large and small, face increasing competition because of lower barriers to new entrants and pressure on prices. Firms also face an increase in substitute products and services; alternative, and increasingly digital, supply chains; well-informed consumers; and increased international competition for both consumer and financing dollars.

The search for some type of sustainable competitive advantage, defined as a situation when competitors are unable to negate a source of competitive advantage and cease their attempt to do so,⁵ has therefore become more focused and a continuous management activity. Typically, this search has concentrated on two related areas: identifying a unique strategic attribute (doing something different), or improving the execution of strategy (doing something better or faster). Both depend on people within the organisation for their success.

Doing something different involves identifying something uncommon or unique that distinguishes a firm from its competitors in ways that customers value, that provides positive financial benefits (adds value) and is not easily copied or substituted by a competitor.⁶ For example, a firm’s core competencies can be defined⁷ as things that:

▪ are not easily copied by competitors

▪ provide access to a variety of markets, and

▪ improve customers’ perceptions of products and services relative to a competitor.

Such attributes can serve as a source of competitive advantage. A firm’s human resources can also be seen as a potential source of sustained competitive advantage. Many writers have suggested that having committed, loyal, skilled and motivated (engaged) employees is difficult for competitors to imitate, adds long-term value, and clearly differentiates one firm from another.⁸

Doing something better involves improving the execution of strategy by, for example, increasing workforce flexibility, improving inventory controls, selecting employees with a customer service orientation, better managing employee performance, and improving managerial skills in the management of change. All of these factors have been identified as ways in which organisations can improve both efficiency and effectiveness.

Reward systems, including remuneration, have a role to play in both of the above by, for example:

i) Helping build workforce flexibility by encouraging the acquisition of competencies⁹ and rewarding those who apply them to improve individual and team performance.

ii) Providing the employee value proposition¹⁰ that attracts people with the desired competencies to come and work for an organisation, and facilitating retention management to keep those hired.

iii) Supporting major organisational change efforts that necessitate employee involvement and participation to identify and implement strategic initiatives. As Lawler and Jenkins put it, reward systems are central to the implementation and effective operationalization of strategies.¹¹

At the same time, the ability of human resource practices to contribute to business success has been documented in long-term studies of national and multinational companies.¹² While it should make intuitive sense that good people and good systems should help organisations deliver to the bottom line, recent research has clearly defined effective people management practice as a source of economic success.¹³

Indeed, the degree of alignment between a reward system and business strategy may well be a key determinant of a firm’s effectiveness. For example, research suggests that inferior firm performance is associated with discrepancies between pay policies and business strategy.¹⁴ That said, it is not any single human resource practice that makes the difference but how these are put together into a coherent system that directly enables an organisation’s strategy. Indeed, there is no inherent reason why reward systems in general, or remuneration systems in particular, should generate a competitive advantage for a firm, sustained or otherwise. The quantity of published literature on such programmes means they are neither rare nor inimitable. Nor is there any particular guarantee that the implementation of reward programmes will add positive economic value to a firm. Instead, as will be discussed below, firms are most effective when reward and remuneration systems are integrated with other human resource systems.

Footnotes

¶1.2 Rewards and Remuneration

So far, the terms reward and remuneration have been treated as largely synonymous in this book. This may seem intuitively obvious but it is worth clarifying the relationship. In brief, effective rewards are anything that:

i) satisfy an individual employee’s needs, and

ii) are perceived as fair by the individual in relation to the effort expended to obtain the reward, and

iii) are seen by the individual as equitable in relation to the perceived rewards and effort of other people.

Anything that meets these three criteria of need satisfaction, fairness and equity can be used to modify employee behaviour and therefore serve as an incentive for improved performance. Managers who understand the needs of their employees, and who control employee access to rewards that satisfy those needs, have a basis for energising and directing employee behaviour. Managers also need to be clear on what they want as performance, and the behaviours or actions that must be done to achieve these. There is a truism that what gets rewarded tends to get done in organisations. That may seem overly simplistic but does communicate an important point. Namely, reward systems communicate to employees what things are seen as important by managers and therefore to be achieved (or sabotaged in the case of a hostile organisational culture). Designed well, they should also communicate what results are expected from the employees and, depending on the nature of the work performed, the kind of behaviour that will be needed to achieve these results.

Rewards on this basis need not necessarily be financial. The catch is that what satisfies the needs of one person does not necessarily satisfy the needs of another. Indeed, a common mistake made by managers when designing some element of their firm’s reward system is to assume that what they personally find rewarding will be so for others. In the end, there is no substitute for finding out what your people want or need in the way of rewards. Hence, the phrase stay interview is used to describe the practice of meeting with staff to discuss what keeps them feeling rewarded at work.

While managers may feel constrained regarding pay, particularly in larger organisations where performance management and pay are highly systematised, managers have a wide range of potential rewards that they can control (see Figure 1). More specifically:

1. Rewards may be intrinsic to the job itself. Examples include the variety, satisfaction and feelings of challenge and accomplishment that may be obtained from simply doing a job. Jobs, of course, need to be designed to offer such rewards and the means of doing this are fortunately well documented in the job enrichment, job redesign, employee engagement, and workplace reform literature.

2. Rewards can derive from social interaction with other people at work. In addition to providing opportunities for company and possibly friendship, having a job also potentially provides a sense of belonging to a social unit beyond the family and a sense of being needed by others. It may also provide a