Management and Rewards
Management and Rewards Essay
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I need an essay in the following subject:
Why do you think competency-based management of rewards is the least popular area of use
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1) I want a typical and a quality answer which should have about 1400 words.
2) The answer must raise appropriate critical questions.
3) The answer must include examples from experience or the web with references from relevant examples from real companies.
4) Do include all your references, as per the Harvard Referencing System,
5) Please don’t use Wikipedia web site.
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SAMPLE ANSWER
Management and Rewards
Competences have largely been defined as an individual’s characteristics that act as basic prerequisites of work behavior. They revolve around values, knowledge abilities, work style personality, and attitudes. The importance of competences in recruitment, training, coaching, and skills appraisal cannot be underestimated (Ilhaanie, 2010). This fact does not mean that competences are easy to institute and manage. In order for an organization to be successful, the competences of individual workers must be superior, updated, and focused on improving value of the assigned organization. This paper develops an argument that tends to explain why competency-based management of rewards are the least popular area of use.
When organizations chose to eliminate activities that do not add value, they achieve lean operations. This strategy can be complemented by implementing a competence-based reward system (Ilhaanie, 2010). This system uses an employee’s competencies critical to the successful performance of individual roles, to determine the value of their work output.
A competence-based reward system will reward employees for their knowledge, skills, behavior and other characteristics important for organizational success and personal performance and not basically the work activities they perform (Holton, Coco, Lowe & Dustch, 2006). When an organization chooses the competence-based reward system, it must ensure the environment is right for its success. The organization must, thus, make known to the employees the knowledge and skills that are valued by the organization and which it handsomely rewards.
When the standard of competent performance is determined, it makes it clear to employees what training development will be valued. Thus the Human Resource department will points out the training and development resources that will bring the employees to the level desired by the organization (Holton, Coco, Lowe & Dustch, 2006). For example, when a programmer skills set are measured against a lead programmer required competencies, it could emerge that the programmer lacks Advanced Business Application Programming (ABAP). The organization’s Human Resource Department will set in motion strategies to address this. One of which could be to enroll the programmer for ABAP training.
Proponents of Competence-based reward system point out that when it is designed to be the strand that runs between an employees’ pay grade and rewards to particular levels of competence provides objectivity in determining grades. A programmer with a proficiency in system and architectural languages should get a higher pay that one who has just system language. When this is the case, employees learn to associate personal development expectations with level of pay. The organization reinforces their employee behavior that support its mission and business priorities.
When an organization relies on a competence-based reward system, its recruitment strategy will borrow heavily from competence performance standards that link individual career progression and pay. This strategy will be perceived by employees as fair (Ilhaanie, 2010). To employees the ability to differentiate between job grades and titles makes them more confident in the organizations performance expectations. For example, a programmer may recognize that particular management, technical, analytical and communication skills required to obtain a promotion. This could make the employees satisfaction with the system given they view it as adequately addressing promotion and pay increases appropriately. This will benefit the organizations employee recruitment and retention efforts.
Competence-based reward systems do have some challenges, which make fuel critics’ view of the strategy. Given that employees are rated using a general criteria instead of specific accomplishment, these systems could introduce subjectivity in to the evaluation process (Shippmann, Ash, Carr, Hesketh, Pearlman, Battista, Eyde, Kehoe, and Prien, 2000). No two people can interpret leadership or ability to multitask in the same way thus it is possible to have inaccurate ratings.
This strategy, given the subjectivity of the evaluator, could be perceived as promoting favoritism. When an employee perceived him / herself as being more valuable than another, then discovers the other employee remuneration is higher, they could draw the conclusion that they are victims of unfair treatment (Ilhaanie, 2010). Unfortunately, the feeling of unfairness will more often than not result in dissention. This does not add value to the organization nor does it contribute its mission or goals.
Another challenge of competence-based reward system is the realization that establishing the specific competencies that actually result in improved productivity or job performance (Shippmann, Ash, Carr, Hesketh, Pearlman, Battista, Eyde, Kehoe, and Prien, 2000). For example, when a customer experience representative increases the number of enquiries handled in a day, it would be extremely hard to point out whether, the improvement is as a result of improved ability to multitask or increased attention to details thus helping resolve more issues.
In the development and implementation phase of the competence-based reward systems, they can be very complex and labor intensive (Hondeghem and Vandemeulen, 2000). This coupled with the financial investment that must accompany these systems – to cover training and support, could make the systems dear especially when compared to other reward systems.
With the rapidly changing environment, organisations are forced to move towards more responsive and flexible management models. Most organisations seek change in an effort to increase their performance. Competence-based management of rewards has emerged as one of the change strategies that have achieved the desired objective (Tett, Guterman, Bleier, and Murphy, 2000). Despite the competence-based management of rewards system being multifaceted and complex, its basic tenets are concerned with performance, view work as the context in which competencies are revealed, focus on people as opposed to jobs, emphasis on the need of behavioural evidence and reveal that there are several types of competencies that must be considered.
For most organisations, Compensation-based management of rewards has been introduced in the context of major trends or changes. This could include the changing role of managers, down or rightsizing or changes in organisations’ Human Resource practices (Kim and Hong, 2006). When the organisation sets out to develop a more inclusive method of selection, development, assessment or rewarding, it finds Competence-based management of reward to be the most ideal since it is more responsive.
Despite the benefits associated with competence-based management of reward, its implementation in the private and public sector has been selective. Organisations that have embraced competence-based management of reward have tended to focus mainly on management and senior and technical staff (Ulrich & Beatty, 2001). These organisations exhibit a high sensitivity to the competence-based management of rewards. They use both organisational and job variable as a source of competence, which aligns the strategy to the macro-level and personal orientation of competence. Indeed, organisations that embrace and implement competence-based management of reward are fully aware of the major benefits for employers, managers and organisations.
Competence-based management of reward can promote a better understanding of the requirements necessary to achieve high performance and personal development. For this group of employees, competence-based management of reward takes on a motivational role (Fleishman, Wetrogan, Hulman and Marshall-Mies, 1995). To managers, the benefits will be more technical. It offers to managers a more comprehensive tool for decision making and determining criteria in order to effectively manage selection, evaluation and development. It also offers managers a superior frame of reference to manage people.
It offers organisations better instrument for use in undertaking conventional HR practises. This is in addition to facilitating the match with people and enabling benchmarking in competence identification (Virtanen, 2000). When the organisation considers the benefit to be gained by aligning and linking individuals to its goals and values – strategic value, it gains more than having to adopt a more functional approach. Organisation must perform correctly the inference process from itself to competencies and their respective verification levels to derive the full benefits. Similarly, the same is true for its understanding of what competencies are and how best to exploit them for the benefit of the organisation.
Organisations describe Human Resource role as being predominately administrative and less strategic. Fundamentally, the changing role and competencies or HR professional is aimed at increasing effectiveness of HR practice (Gratton & Truss, 2003). It should not be lost that competence-based management of reward is not the best approach. It is the management, which if taken seriously, will provide the organisation a good pretext to experiment new practices and retain the most adequate. Generally, they are good instruments that reduce the knowing-doing gap. For the private organisations, compensation-based management of reward greatly enhances their conservativeness while nurturing innovation and experimentation with management practices and strategies.
References
Fleishman, E., Wetrogan, L. Hulman, C. & Marshall-Mies, J. 1995. Development of prototype occupational information network content model, V1. Utah: Utah Department of Employment Security.
Gratton, L. & Truss, C. 2003. The three-dimensional people strategy: Putting human resourcespoliciesinto action. The Academy of Management Executive, 17(3), pp.74-86.
Hondeghem, A. & Vandemeulen, F. 2000. Competency management in the Flemish and Dutchcivil service. The International Journal of Public Sector Management, 13(4), 342-353.
Holton, E. F., Coco, M. L., Lowe, J. L & Dustch, J. V. 2006. Blended Delivery Strategies forCompetence-Based Training. Advances in Developing Human Resources, 8(2), 210-229
Ilhaanie, A. G. A. 2010. Competence-Based Human Resources Practise in Malaysian Public Sector Organisation, African Journal of Business Management, 4(2), 235-241.
Kim, P. & Hong, K. 2006. Searching for effective HRM reform strategy in the public sector:Critical review of WPSR 2005 and suggestions. Public Personnel Management, 35(3), 199-215.
Shippmann, J., Ash, R., Carr, L., Hesketh, B., Pearlman, K., Battista, M., Eyde, L., Kehoe, J.,& Prien, E. 2000. The practice of competency modelling. Personnel Psychology, 53, 703-740.
Tett, R., Guterman, H., Bleier, A., & Murphy, P. 2000. Development and content validation ofa “Hyperdimensional” taxonomy of managerial competence. Human Performance, 13(3), 205-251.
Ulrich, D. & Beatty, D. 2001 From partners to players: extending the HR playing field. Human Resource Management, 40(4), 293–307.
Virtanen, T. 2000. Changing competences of public managers: Tensions in commitment. The International Journal of Public Sector Management, 13(4), 333-341.
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