Vita Group - Performance and Reward Strategies - Case Study Example

Vita Group: Performance and reward strategies Submitted to (INSTRUCTOR’S NAME) (INSTITUTION NAME) (ADDRESS) October 22nd, 2014 By (STUDENT NAME) (INSTITUTION NAME) Vita Group Introduction Vita group is a company with a reputation of using incentives to ensure that its employees toe the line in terms of performance. As such, it has capable charter of service delivery and employees fall under all three categories of service delivery, which are high performance, lower performance and average performance, and all these aims at meeting the objectives of the company. Alignment of the reward schemes and the company’s objectives can be questioned due to the employee types found in the company and the performance of the stated stores. This means that branding the company’s reward schemes stands out as crucial in its effectiveness to offer motivation and enhance performance as well as organizational commitment. With this, the report seeks to clarify the position of the company’s reward schemes and how they align with the company’s objectives, as well as how to improve performance using the schemes. Alignment Integration of performance and rewards schemes remain crucial, especially when done in line with organizational goals since these assist in generating motivation amongst employees and inculcation of organizational goals within the abilities of employees (Buckingham, 2005). Arguments in the world of management suggest that integration works hand in hand with motivational theories, and in particular intrinsic motivation, where this ensures that employees gain their maximum satisfaction in their jobs and performance of tasks. With regard to organizational culture, which means unobservable characteristics of an organization, integration of rewards schemes and performance blend in to create the best out of employees with regard to performance and confidence in their abilities meaning that employees get to do their best at any given time. The above is especially so when faced with challenging tasks that ordinarily do not fall within their own job descriptions and abilities, where once employees manage to acclimatize the goals of the organization within their own and into their scope of life. Implications of this are that employees are capable of engaging in organizational objectives, while at the same time performing the activities for their own benefit, which means workplace activities satisfy indirect personal goals. Alignment is also known to eliminate confusion and competition between personal goals and organizational goals since there are distinct aspects demanding achievement and may be conflicting. The above means that personal and organizational goals become one once alignment takes place since it assists in creating priorities for the organization and employees putting organizational goals first. A look at extrinsic motivation suggests that alignment of organizational objectives with reward schemes and performance allows increased performance amongst employees who receive rewards as part of their rewards. Implications of this point to higher output or performance with every increase in rewards, making it crucial to ensure that there is adequate external motivation directed at organizational goals. Similarly, in alignment, organizations must not go beyond their means to instill external motivations since this could misdirect the employees’ focus outside the intended scope. As such, the role of alignment in external motivation and reward schemes comes in the form of appreciating returns based on the amount and value of the rewards offered to employees. Alignment with fixed returns is not effective or adequate in the creation of effective teams to meet organizational goals, but this only according to extrinsic motivation since it focuses on catering to the personal needs of employees prior to those of the organization. This makes this form of alignment more of a bribe to the employees than a means of enhancing performs and should the reward/performance model become unsustainable, the organization is likely to collapse due to lack of motivation. Intrinsic motivational performance reward schemes, therefore, take the center stage in ensuring that there is sustainable growth and overall returns with regard to human resources remain high at all times. However, alignment using extrinsic performance reward schemes assists employees in the development of positive organizational behaviour, which is based on commitment, but only provided rewards are maintained. Lack of alignment Management scientists have found that a lack of alignment in organizational goals, reward schemes and performance result in collapse of organizational goals due to lack of achievement (Taylor, 2007). The above is based on employee perception towards reward schemes and performance, where a sense of entitlement comes in, as mentioned earlier making unaligned rewards serve as bribes. Consequences of this are that, there is a high likelihood of dysfunctional employee in the organizations since they lack a sense of purpose and belonging due to elimination or presence of rewards regardless of their performance. Similarly, reward schemes when maligned with organizational objectives lead to disintegration of employee commitment due to lack of support agents in the workplace, which include focus on personal needs. Based on scientific management theories, there is need to have support structures since employees make the workplace more effective in achieving its goals. However, in the absence of these support structures brought about by lack of integration enhances dismal performance due to poor motivation and poor relations between employees and employers. Similarly, there exists mass wastage of local talent in the workplace since maligned reward schemes instigate poor commitment in the workplace for top performing employees since the rewards work against the spirit of the organization in meeting both the needs of the organization and those of its employees (Mehmood, 2013). This means that organizations harbour disgruntled employees with whom organizational objectives and personal goals are in conflict, especially since rewards of a non-monetary nature work towards satisfying personal goals in the workplace. With regard to leadership and management, poor alignment of reward schemes and performance have serious implications in that there tends to be poor communication of expectations between team leaders and employees, as well as from employers to employees (Buckingham, 2005). As such, this lack of integration drives a wedge into organizations with employees perceiving employers as exploiting their abilities since the incentives offered have no bearing with regard to their performance. Aligning rewards and performance are supposed to be part of strategic planning within the organization to have all arms of the business considered and their efforts put to good use and rewarded. Misalignment, on the other hand, develops mistrust between employers and employees since reward schemes appear to assist only specific employees rather than catering for the entire organization and its staff. Issues As an organization, numerous issues may come up as challenges, but relating to reward schemes and performance, Vita group faces challenges in the form of loyalty to the organization by its employees. Based on humanistic management theories, there are aspects of lack of commitment to the organization, which stems from indirect communication with employees by the leadership and management of the company (Babakus et al, 2003). The above is evident in that there is no mention of personalised goals in the organization, but rather employees work towards stated goals and rewards and offered on achievement of the stated goals. This means that employees do not face the desired amount of persona interaction with the leadership of the company resulting in poor communication and low job satisfaction (Ahmad, 2010). This means that the company does not understand the different goals and abilities that each employee has and wishes to achieve while still working with the group. This way, commitment stands at a low point and loyalty towards organizational goals fares similarly since counselling only follows stipulated goals and not personal interest and how they affect the group, as well as other employees. Reward schemes in this case are taken to mean that all employees have similar qualities and capabilities thus judging all employees by the same standard and offering rewards to those who achieve the organization’s objectives. Humanistic management and motivational theories strongly advise against this since all employees should be treated as individuals rather than collectively which kills motivation and rivalry, as well quarrels in the workplace. In addition, the organization faces serious alignment issues based on organizational citizenship behaviour and successful integration of reward schemes in the group. The above is derivative of the fact that organizational citizenship behaviour stems from the aforementioned loyalty and commitment, and with the presence of reward schemes, one cannot define the proliferation of organizational citizenship behaviour (Kymlicka, 2004). Organizational citizenship behaviour in this case means that ability of employees to go the extra mile regardless of rewards, but for one’s own satisfaction and without official recognition. This way, appraisals cannot even determine this ability since the reward systems side-track performance as a form of extrinsic motivation. The given motto of the organization “Love what you do”, in this case, does little to disambiguate the question of reward schemes versus organizational citizenship behaviour. The above motto does not align the performance of employees with the goals of the organization, were it also fails to consider the needs of employees. The motto, despite sounding humanistic in nature, its role in alignment leaves a gap due to scientific management aspects, where employees are left to fulfil organizational objectives as stated and not as negotiated (Taylor, 2007). This makes employees a collection rather than individuals capable of appealing to the organization. In addition, in alignment, the group appears to lack in synergy, where all organs of the group need to be integrated and understand the importance of working together, bringing up the issue of leadership. In accordance to the systems theory, it is crucial to have all departments understand one another and ensure that efforts keep complementing one another for purposes of completing the organizations goals. In this case, the presence of over performers and underperformers clearly refutes the ability of the company to lead its employees in accordance to their needs and abilities. As such, reward schemes are skewed to fit only a certain group rather than having leaders and managers in the organization come together to help all employees achieve organizational objectives. This presence poses a threat to reward schemes since they suggest only a certain elite group of performers receive them creating cartel like behaviour in the group thus contributing to poor leadership and low motivation for all. Performance and reward schemes integration There appears to be some of integration of performance and reward management strategies based on presented evidence, where the reward schemes are presented in line with performance modules. This is evident according to the different stores in place and the rewards they get upon reaching a certain quota of organizational goals. This means that the reward schemes are not independent of organizational gals and employee characteristics as underperformers receive counselling. However, this is not full integration since it lacks in individual appraisals and individual set goals, but rather collective goals independent of individual capabilities. Studies indicate that failure to integrate performance and reward schemes contributes to a communication breakdown between management and employees leading to poor performance (West, 2012). As such, integration assists in generation of job satisfaction amongst employees and cordial relationships with the management, where there are feedback systems on the effectiveness of the reward schemes on performance. In addition, integrationists state that it assists in exploiting individual capabilities through appeal to personal values. However, failure to integrate rewards schemes and performance tend to contribute to opposition of work policies and ethics with the squabbles of forced work. This is because there is a low motivation amongst workers since they engage in duties beyond their job description making it virtually impossible to command respect for their leaders. As such, integration requires inclusion of employee input to ensure agreement and synergetic workflow throughout the organization with goals set based on employee needs, abilities and limitations. Performance and management Performance and reward management strategies would enable managers to effectively manage and motivate their employees who are high performers in that these are easily influenced employees with high motivation towards their jobs. Studies indicate that performance and reward systems work best for high performers, when they include favourable leadership that involves them in decision making towards the goals. As such, the schemes assist in creating intrinsic motivation for the employees to engage in sensible activities, from which they reap positive relationships. In the case of average performers, studies indicate that this group should be withdrawn from all financial incentive based schemes and towards services (Mujtaba and shuaib, 2010). These assist in motivating the employees to work towards their personal goals, while at the same time enhancing their performance of organizational tasks. In this case, it creates harmony between personal and organizational goals for high performance and returns are offered in services that help achieve personal goals. On the other hand, low performers need higher incentives that are of a drastic nature based on payment for only fully achieved goals. This means that there would be no more canopy rewards for canopy performance, but rather an individual reward for individual performance. Similarly, it points to no pay and no incentives for no goals achieved thus creating high extrinsic motivation to maintain one’s position in the workplace. Recommendations To ensure proper integration and alignment of performance and reward systems in Vita Group, there is need to come up with clear objectives based on the abilities of each employee and his or her needs. According to humanistic management and transformational leadership, there are numerous ways in which reward schemes and performance can work together, and these include recognition of individual effort and setting goals for each employee. In addition, the rewards offered should not be of financial vale, but rather service in nature, where non-monetary incentives contribute to higher returns, while monetary gains for incentives result in lower returns, especially when the reward scheme is fixed (Wheatley, 1992). This means that Vita group should continue to offer services as rewards, and this remains a commendable step. Also, Vita group can also increase loyalty to the company, where this can be done through better relationships with management in decision making regarding reward schemes for the company as a whole, which will also enhance motivation Conclusion Altogether, Vita group remains a company that is capable of utilizing its reward schemes appropriately, especially in alignment. As such, the company is observed to use its incentive to motivate performance and offer rewards to those who make, while at the same time catering for those who lag behind. It can improve its reward scheme by ensuring better communication and looking after the individual needs of each employee and regarding each individually. Similarly, it can set goals per capabilities of each employee to cut back on individuality and personal commitments in the organization and reward individuals based on this performance. 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West, M.A and Lyubovnikova, J 2012. Real Teams or Pseudo Teams? The Changing Landscape Needs a Better Map,” Industrial and Organizational Psychology, 5(1), pp. 25-28. Wheatley, M 1992, Leadership and the New Science. Learning about organizations from an orderly universe, New York, Berrett-Koehler Publishers. Read More