The paper "Is There Such a Thing as a Perfect Remuneration and Performance Management System" is a perfect example of management coursework. Most companies in the old economy were centered on robust financial capital and strong infrastructure. The shift slowly moved towards a focus on technology know-how. The emerging economy stresses on knowledge, investment in human capital is now at the centre of the business world and today, most companies have changed their focus from physical assets to knowledge and information i. e. intellectual capital. “ The effective management of human and intellectual capital poses new challenges in the organisation for leadership and managerial capabilities” (Rennie, 2003).
The same article states that successful companies shape and mould their culture to fit their overall vision. Human Resource Management activities can be utilised effectively to ‘ reinforce certain ideas, values and behaviours and discouraging others’ . People are the lifeblood of organisations. A company’ s workforce represents one of its most potent and valuable resources. This, in turn, means that managing a workforce effectively is an extremely critical element in enhancing and sustaining organisational performance. Dealing with people and managing them, becomes one of the most difficult aspects of organisational management as it translates into understanding the needs of people who differ from each other both psychologically and physically.
The core elements of personnel management include Employee Resourcing, Strategy and Organisation, Employee Relations, Employee Development, Reward Management and Employment and personnel management. In a nutshell, Human Resource Management is basically intended to increase the value of an employee. This paper aims to analyse whether there is anything that can be classified as the perfect remuneration or a perfect performance management system.
We will first look at the elements that would make up a perfect remuneration and performance management system and whether such a system can be designed. We will then look at whether there exist the perfect remuneration and performance management system and also highlight the fact that the system utilised by one company may not be necessarily suitable for another company. For the purpose of this paper, we will analyse the kind of remuneration and performance management system that is followed in health organisations. All this will allow us to come to a conclusion on whether there is such a thing as a perfect remuneration or performance management system. Definition of the Perfect Remuneration System and Performance Remuneration refers to the monetary value of the compensation received by an employee in return for the performance of their contracted duties and responsibilities (Mackay, 1997).
This could also include rewards, which covers remuneration along with other intangible and tangible value gains by employees. While remuneration involves the compensation (actual salary, commissions, direct benefits and wages) and incentives (gain sharing and bonuses); rewards also include indirect benefits such as travel opportunities, development opportunities, study time etc. Remuneration and Rewards could be either performance-based or skills-based.
Within these two categorisations, the approach can be either team-based or individual-based. Compensation is termed as ‘ performance-based’ when remuneration directly links an individual/team’ s achievement or non – achievement measured against the performance of the company or similar pre-determined outcomes. This could either be providing a base pay along with bonuses or other one-off type rewards.
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Lofthouse, Tina, (2006), Managing Partner,Cover Story: Just Rewards, Volume 9, Issue 6. Viewed on October 20, 2009, < http://www.mpmagazine.com/xq/asp/sid.0/articleid.64ED845E-75BF-400F-920E-1EE61B5085BB/eTitle.Cover_story_Just_rewards/qx/display.htm>. Webpage.
Mackay Paul (1997), ‘Which Remuneration and Rewards System will Work Best For Us’, p. 3-6. Report.
Oyedele, Olufemi, SciTopics, Research Summaries by Experts, (2009). Viewed on October 20, 2009. http://www.scitopics.com/How_to_become_a_great_manager.html. Webpage.
Rennie H. Wendy (2003), ‘The Role of Human Resource Management and The Human Resource Professional in the New Economy, p. 11. Report.