The paper "Performance Measurement and Rewards Management - Fabian Advertising Company" is a good example of a management case study. The sole aim of any business organisation is to get higher returns from its investments. This can only be achieved when that organisation is able to produce goods and or services that meet the dynamic needs of the customer. These needs can only be met by creating value to the ultimate consumer. The beauty of this is then once an organisation is able to meet the needs of the target market, it is able to lock in customers and lock competitors thus, achieving market leadership.
This will in turn guarantee continued sales and hence, higher returns. The path towards the later is through strategic planning where organisation exploits its key competencies, resources and success factors. Most of these desired ends are met through streamlining of internal operations through best practices like cost reduction, employees motivation, systems approach to management, managing by objective, total reward management, proper organisation structure & culture, industrial relations and total quality management among others. One way of streamlining internal operations and ensuring higher productivity is through performance measurement and reward systems (PMRS).
This report outlines the same in the context of Fabian’ s Advertising mission, new business strategy and key success factors (KSF); (Appendix 1). 2.0 Elements of PMRS According to Armstrong and Murlis (2007, p. 99) employees ought to be paid according to their skills and contribution to the organization. The current human resource practices are based on balancing efficiency, effectiveness and marketplace viability so as to ensure “ value exchange” between employer and employee. In the 1970s and 80s, most organizations acknowledged that “ strategically designed compensations and benefits programs could give them edge in a rapidly changing environment” .
Moreover, in 1990s companies experienced numerous challenges this pushed the need to have “ alignment of pay and performance, tighter control on benefits costs and more relevant and valued employee reward programs” (Alliance for work-life progress, 2006). The basis of this is that a well-rewarded employee will have improved performance. However, corporate managers should be able to determine if they are getting the value for their money based on this approach. This then calls for having various parameters that can be used to measure the performance of an employee or department. Elements which are critical to PMRS and can be used to measure performance include cost, time and return on investments (ROI).
Cost of production and operation is an important element in the company’ s operation. Employees and all head of departments are critically in ensuring that the company reduces its operation and production cost. Burrow (2008, p. 34) explores the concept of pricing as a basis of competitive strategy based on reduction of internal costs associated with production.
The underlying belief is that once a company is a low-cost producer, the same can consequently be transferred to consumers. This is well combined with value creation, would guarantee a platform of attracting & retaining customers and thus, the whole idea of market leadership and increased returns. Time is another important element in measuring the performance of an individual and departments. Performance contracting demands that employees should meet their targets of delivering products within the specified or even less time while maintaining the same quality or even high. Time management in business process is a critical element of attaining competitive adage.
One factor that highlights the need for this is how Japanese companies were able to adopt the concept of lean manufacturing through just-in-time production. This system advocates for doing things on a timely basis so that they can be delivered to the customer on a timely basis (Sohal, Keller & Fouad, 1989, p. 16). The last is the return on investment. This concept underscores the fact that businesses exist to get returns on their investments. Shareholders expect returns from their investment.
This means that employees should work towards the same.