Advantages of Having a Reward System

Assessment 3

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1. Reward Systems

1.1 Advantages of Having a Reward System

1.1.1 They incentivize teamwork and collaboration

Employees in the tourism and hospitality industry tend to be motivated naturally by incentive and recognition programs. Also, they may be utilized to bring teams and departments closer together (Idemobi, Ngige, & Ofili, 2017). Moreover incentives and reward programs inspire the employees meet both their personal and professional goals. Employee incentive programs is a tremendous method to recognize employees who achieve their goals However, this may jeopardize a team’s sense of oneness and coherence. Combining incentive programs with recognition programs results in a one-two punch which in the end, encourages employees to collaborate with one another (Idemobi, Ngige, & Ofili, 2017). Peer-to-peer recognition can be used to show employees that the organization values and acknowledges their contribution to the success of the team

1.1.2. Reward Systems are cost effective and improve employee retention

Companies in the hospitality and tourism industry easily implement reward systems. Although there are various programs available, currently, many organizations take the form of digital platforms such as the social media platforms used by the employees in their day to day lives. According to Franco‐Santos, & Gomez‐Mejia (2015), recognition systems help the employees across the organization to work harder and are proud to take on tasks at hand. Besides, the employee turnover is reduced. Idemobi, Ngige, & Ofili (2017) states that organizations that have implemented employee reward systems enjoy a reduction of approximately 30% in voluntary turnover. Employee retention on the other hand is cost effective to the organization while at the same time allows the continuous provision of quality services expected by the customers. The retained employees have a higher a higher likelihood of growing and developing, thus, helping the organization to reach newer heights of customer satisfaction and operational excellence. If there is an increased rate of turnover, the organization risks moving backwards in terms of business success.

1.1.3. Reward System helps employees feel engaged and develop a sense of belonging

Reward systems such as employee recognition schemes tend to use peer-to-peer and manager-to-peer recognition in order to help employees feel a sense of belonging within the organization. This program not only helps employees feel more engaged but also they take pride in performing their tasks. Evidently, the more engaged employees are, the higher the chances of a business being a success. A research by Franco‐Santos, & Gomez‐Mejia (2015) revealed that higher levels of employee engagement increases the company’s profitability by approximately 20%. In addition, nearly ninety percent of leaders in the hospitality industry consider a lack of employee engagement to be among the top three threats that face the operations of the industry.

1.2 Disadvantages of Having a Reward System

1.2.1. Inequitable Employee Rewards

Based on the workforce’s size and the compensation structure of the organization, some of the reward systems can be cost-prohibitive. The majority of the employers in the hospitality industry hand out some seasonal rewards like $25 gift cards to the general workforce and the upper level employees are rewarded with substantial rewards like $1000 gift vouchers (Idemobi, Ngige, & Ofili, 2017). This kind of reward system can foster a divided workforce and elitism (Idemobi, Ngige, & Ofili, 2017). A lack of commitment to workplace equity is the main result of a reward system.

1.2.2. Employee Begin to See Rewards as an Entitlement

Hospitality companies that make a habit of implementing an increased reward systems risk employees believing that they are entitled to an ever-increasing rewards and bonuses for simply performing their duties in the workplace (Franco‐Santos & Gomez‐Mejia, 2015). The definition of employee rewards by the human resources is aligned with rewarding those that make significant contributions to the success of the organization (Franco‐Santos & Gomez‐Mejia, 2015). Also, it has the potential to minimize and ultimately to eliminate a sense of entitlement by the employees. Entitlement comes in when reward systems are rolled out constantly, creating a culture of expecting these benefits to continue. If a hospitality company decides to terminate a rewards program, then employees would lose motivation due to entitlement.

1.2.3. Reward Systems can Lead to Higher Turnover

Sometimes managers decide to use reward systems to reduce employee turnover. The development of an employee reward system in order to reduce voluntary employee turnover can be problematic for an organization. This is because the majority of employees cite poor leadership as their reason to quit (Jakobsen & Mortensen, 2016). A reward system with the intention to motivate workers and mitigate turnover can be counterproductive and costly. Disengaged employees are more likely to prefer challenging work assignments and satisfying work relationships over material rewards.

2. Performance Management

Performance management can be beneficial for both the employees and organizations in the hospitality industry. Normally, the approach tends to utilize systematic and meticulous evaluations, offers specific feedback on performance to improve the performance of employees, identifies the training that they need to develop their skills, and facilitates organizational and individual development (Cappelli & Tavis, 2016). Employee performance and decision-making tend to establish employee productivity and motivation. Performance management involves matching employees with functions and tasks equivalent to their knowledge and skills. The system covers employee development and training, organizational restructuring, and team dynamics.

2.1 Advantages of Performance Management

2.1.1. Increases employee retention

Performance management increases employee retention. According to research conducted by Jakobsen & Mortensen (2016), organizations that regularly implement employee feedback have voluntary turnover rates which are approximately 14% lower relative to those that do not receive feedback. An increased employee turnover has a significant impact on hospitality companies not mentioning the effect on the employee morale. The performance management’s nature makes sure that the employee expectations and their objectives are made clear and are reviewed regularly. In addition, the implementation of frequent feedback and review sessions in the workplace allows employees to raise and resolve important issues (Jakobsen & Mortensen, 2016). The regular interactions between employees and managers allows for an easy and fluid communication. Moreover, the latter are kept in the loop concerning the progress of the team and any potential issues. An effective performance review strategy encourages regular feedback, either formal or informal. Besides, it will encourage development and learning and prioritize the recognition of employees.

2.1.2. Delivers a great employee autonomy

Once the employees are made aware of the objectives of the wider business and what they can contribute to the achievement of those objectives, they can make their respective choices on how they will deliver their responsibilities. Consequently, they become more committed, happier, more loyal, and more productive than the employees whose actions are dictated (Cappelli & Tavis, 2016). Managers have the assurance of frequent feedback sessions and discussion to review the progress of the employees against the objectives they had agreed on. This therefore fosters a culture of initiative and trust among the employees. This culture allows for a free flow of creativity and ideas. This is a kind of culture that benefits the hospitality business in the long run.

2.1.3. Improves accountability

Accountability plays a vital role in an organization’s success but it is not easy to ensure an effective accountability. Time and again, people equate accountability to a culture of blame. This is wrong and increasingly detrimental to the employee morale and corporate culture (Cappelli & Tavis, 2016). Effective accountability defines the goals, values, and mission of an organization and it makes sure that each employee understands his role within that.

2.2 Disadvantages of Performance Management

2.2.1. Risk of Internal Competition by Employees

Under the performance management system, employees tend to compete with one another for pay, position, and status. This can result in strong employee rivalry, backstabbing, and failure to communicate efficiently among employees (Jakobsen & Mortensen, 2016). Ultimately, this could lead to department and team’s dysfunction and failure to achieve the standard of performance.

2.2.2. Favoritism on Performers Leading to Low Morale

Supervisors and managers depend on and trust a specific employee more than others. The respective employee could be the team leader or the foreman who is entrusted with the duty to explain new roles to the rest of the team (Jakobsen & Mortensen, 2016). This could result in distrust and dissension among the employees. Moreover, it leads to team fraction and negatively affects the satisfaction and morale of the employees.

2.2.3. Process is Expensive and Time-Consuming

Performance management is costly and it requires lots of administrative work, time, and patience. Normally, the departments that are negatively impacted include finance, the human resources, and organizational development (Jakobsen & Mortensen, 2016). The performance management system demands that the employees should be equipped with the “appropriate” knowledge and skills encompassing extensive training, career development and training workshops for all divisions and level of employees.

2.2.4. Complexities Leading to a Manager’s Dilemma

With performance management, managers are not able to efficiently perform their tasks because most of their time is spent supervising employees on their responsibilities and functions. They face value-based appraisal systems. Therefore, it is tough and challenging to decide on value and performance indicators for measurement (Jakobsen & Mortensen, 2016). It is also impossible to implement a common indicator since different jobs require different requirements.

3. Importance of Planning for Talent Managers

3.1 Importance of Planning and the planning Process when Selecting Talent

Human resource planning is responsible for identifying the talent that will translate an organization’s objectives into results. The planning prepares organizations by ensuring that they hire the right talent for both their talent and future needs. Human resource planning is a continuous process that involves the reviewing of many interrelated activities in the organization ranging from policies, objectives, and strategies, to ensure the availability of the right quality and quantity of human resource when they are needed (Lapiņa, Maurāne, & Stariņeca, 2014). One of the methods used in HR planning, is the process of keeping a record of all the employees in the organization at any given time, capturing demographic data, skill sets, work experience and the scope of work they do. The employee inventory facilitates the human resource management to stay up to date with the status of the human resource, as well as to predict the future trends in human resource planning. Analyzing the current talent in an organization, allows the HR personnel determine if that talent will still be viable in the company in the next five years, given their current skills sets (Samwel, 2018). For example, if accountants in a hospitality organization use paperwork for financial management, and the company forecasts that the future will require the use of QuickBooks, then they might decide to train their employees, or consider hiring the individuals with the required qualifications.

There are five key steps in performing human resource planning which include defining clear business goals, performing environmental analysis, conducting gap assessment, determining human resource priorities and regulations, and constantly monitoring and reporting the process. When an organization conducts the processes mentioned above, they can determine the gap between the current skill set and the forecasted skill set and come up with a solution on how to fill the gap (Samwel, 2018). The solutions include talent development for the current employees, promotions, interdepartmental transfers, expansion of the workforce, and in some cases declaring some positions and departments redundant.

3.2 Benefits of Planning for Talent Managers

The first benefit is that having the right people working in an organization, at the right time, leads to increased productivity towards the attainment of the organization’s critical objectives, and thus increased profits in some cases. Human resource planning attracts leads to the attraction of the right kind of people to the organization, by advertising for specific skill sets at a specific time (Samwel, 2018).

HR planning helps an organization to adjust to anticipated changes in the industry. These changes might be because of technological advancement, global marketing, or new government guidelines (Samwel, 2018). For example, a government might impose a three-month travel ban on countries that were major sources of tourists for your country. Such a ban would lead to the decline of the business in those 3 months, which would translate to a lower demand of employees. Thus, the employer might decide to send some of the employees for an unpaid leave, as they wait for the government to lift the ban.

HR planning also leads an organization to conform to new government guidelines on general hiring processes and inclusivity. For example, the government might require an organization to reserve a third of its positions to women and people with disabilities (Samwel, 2018). Therefore, through HR planning, the organization starts to review its policies, and even physical places to accommodate the people living with disabilities for future hiring.

3.3 Models used Human Resource Panning

3.3.1 Standard Causal model

This model assesses how the HR strategy aligns to the overall business strategy and the process that need to be undertaken to meet the company’s goals. Therefore, a successful HR which entails the recruitment of new talents, performance management, employee wellbeing, and other policies, is usually derived from the overall strategy (Lapiņa, Maurāne, & Stariņeca, 2014). These HR practices lead to specific outcomes such as improved productivity, quality results, and commitment to work.

3.3.2 The 8-box model by Paul BoselieThis model is used to analyze all the internal and external factors that affect HR processes. Internal processes include the culture and history of the organization, skillset of employees, employee gap, and technology used. On the other hand, external factors are government legislations, market trends, political climate, and competition from similar companies (Lapiņa, Maurāne, & Stariņeca, 2014). HR practitioners use the outcome of this analysis to determine the kind of talent to hire, the innovations to adopt, and even the policies to formulate to reach the organization’s goals in an ever-evolving job market.

4. The Future of Human Resource Management

4.1 New Approaches of Conducting Performance Management

Artificial intelligence, globalization, and most recently the COVID-19 are some of the changes that have and continue to revolutionize the way HR managers work over the coming few years. For example, the COVID-19 pandemic has altered the reality of many workers across the globe and redefined how and when work is done (Przytuła, Strzelec, & Krysińska-Kościańska, 2020). Digital advancements have also led to the recruitment of diverse teams that are dispersed all over in the world but can meet and work in the same digital spaces. According to a survey conducted in 2020, 60% of employees preferred to continue working from home even after the pandemic ends (Meister &Brown, 2021). This means that remote working is likely to continue indefinitely, and HR managers need to come up with lasting digital strategies that organizations will adopt for at least the next five years. Before the pandemic, most organizations used approaches such as timesheets to measure employees’ performance, but currently it is almost impossible to measure the number of hours an employee spends working (Przytuła, Strzelec, & Krysińska-Kościańska, 2020). Therefore, HR managers should establish innovative ways of measuring an employee’s performance that do not involve working hours. For examples, they collaborate with all line managers to track employees’ deliverables within a certain timeline and allow for some policies to be optional for those working remotely.

4.2 Investing in digital collaborative platforms

According to a survey done by KPMG, 67% of all CEOs interviewed would rather invest in technology rather than investing in employee skills (Meister &Brown, 2021). As earlier noted, companies are hiring diverse teams that are dispersed all over the world, creating a need for digital collaborative platforms such as zoom, skype for business, and google meets among others. Some companies have forged lasting and sustainable business partnerships with the digital platforms’ providers to ensure smooth running of the organization during remote working. Companies are further delving into the use of Virtual reality platforms for virtual trainings. Virtual reality training has garnered support from many industries, especially the medical field where VR is used for patient-doctor sessions’ simulations. It is estimated that the VR training market will reach $6.3 billion by 2022 ((Meister &Brown, 2021). As employees use digital platforms to collaborate with their colleagues, they are also concerned about data safety and protection. Therefore, HR managers need to establish systems that protect employees’ personal data from phishing and bias based on the personal information shared online.

4.3 Investing in employee wellbeing and disaster preparedness

The COVID-19 pandemic has weighed down on employee’s physical and mental wellbeing, affecting their overall performance and productivity in the workplace. The future requires HR managers to invest in the wellness their employees, by designing services and practices that nurture the physical, emotional, spiritual, and mental health of all the workers (Przytuła, Strzelec, & Krysińska-Kościańska, 2020). Along with employee wellbeing, the company should put in place measures for business continuity and disaster preparedness to protect the business from potentially crushing in the occurrence of another disaster. This role of the HR manager entails coming up with a preparedness plan that is applicable to all types of disasters.

4.4 Creative and innovative recruitment

With the evolving technology, another role of the HR manager would be to effectively identify, and recruit individuals with the right skill sets to match up to the evolving ways of working. The HR manager will have to analyze potential job candidates, not only using their academic qualifications, but also putting into consideration current global trends, competitions in the industry, and the future forecasts (Meister &Brown, 2021). Recruiters should be able to identify talent that is suitable for the organization’s current and future needs, and whose skill sets will lead to their growth. HR personnel should also be able to identify relevant skill development opportunities for employees and formulate policies that advocate personal and professional development of all employees within the time they are employed.

4.5 Data analytics

HR managers will be required to use data analytics to solve people problems such as determining one team performs so well, while the other team underperforms. Data analytics will also help HR managers to solve foreseen challenges such as identifying that the employees might need more support from the organization in ensuring their emotional psychological health for improved productivity (Meister &Brown, 2021). Therefore, HR managers might need specific skills that will enable them to use surveys, and other information provided by employees in their portals to identify and solve those problems.


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