Conclusion & Recommendations

Hello everyone,

Hopefully after reading my posts you got a clear idea about reward systems and how they are linked to culture. I tried explaining it briefly for you to be able to analyze while reading the answer to the main question without getting confused.

In conclusion to all my posts, I recommend that HR practitioners try to deeply understand the culture of their workplace. This will help them design a reward system that will enable them to get comperative advantage. As a result of having encouraged employees the productivity will increase. In addition, the organisation will gain a reoutation that will allow it to be an “employer of choice” an a “great place to work at”. This will attract the best employees in the market and will make the company gain comperative advantage.

I also reccomend leaders and managers to understand the culture of the company since without doing that change will not take place.

For any ideas about topics related to this topic or for any comments please dont hesitate to type that down in the comment area.

Thank you for your cooperation,

Noora

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January 6, 2011

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Factors That Create Distinctive National Reward Systems

Recently, there have been many researches and studies done about the impact of culture on rewards behavior. The result of these studies suggest that individuals in national societies posses certain attitudes that differentiate them from other national societies. Moreover, these individuals may not recognize their possession o f these values and attitudes. “Although the discussion often proceeds in terms of the attitudes of individuals, there is an implicit understanding in the literature that these attitudes and values are prompted and imbued socially”.( Brewster, C., Sparrow, P., & Vernon, G. (2007)) .

A study done by Bento and Ferreira illustrates five dimensions that are considered as a “’cultural lens’ through which to view the underlying attitudes or assumptions of workforces regarding reward:

 • Equity – inequality

• Certainty – uncertainty

• Controllability – uncontrollability

 • Individualism – collectivism

• Materialist foregrounding – personal foregrounding.”

(Brewster, C., Sparrow, P., & Vernon, G. (2007))

 I will mention a brief explanation about the first dimension in this post because in my opinion I think it is the most significant. 

Equality: many studies prove that different forms of justice can be related to cultural factors. Distributive justice is a form of justice that as studies show has an impact on important performance related attitudes.

If  you need an explanation about the other dimensions write that down in the comments area. However, detailed information is provided in the book International Human Resource Management (second edition) by Chris Brewster, Paul Sparrow and Guy Vernon.

Reference:

Brewster, C., Sparrow, P., & Vernon, G. (2007). International Human Resource Management. The Broadway, London: Chartered Institute of Personnel and Development.

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January 6, 2011

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The Link Between Culture and Employee Behavior

        The aim of having a reward system in a company is to produce specific outcomes from individuals. Examples of these outcomes are commitment to the organization’s goals and an increase in the performance. For that reason Hr practitioners should produce a well designed reward system to achieve having these outcomes from the employees.

       For HR practitioners to design the right system they should observe and be able to understand the culture in the workplace. As I mentioned in previous posts understanding the culture in the workplace will result in having the right systems running in the organization that will motivate and encourage the employees to work harder and produce more.

       This shows that there is a link between culture and employee behaviors. There should be a fit between the organization and the individual employee to get an effective working environment. Shared values between the individual and the organization will result in having a fit. The fit between them will be influenced by the culture which will then influence having a psychological contract to take place. So how does culture influence the fit between the individual employee and the organization? If the employee finds that the workplace culture relates to his/her culture the fit might take place. In addition, if the behavior of other employees in the company relates to the behavior of this individual there will be a fit. The way other employees think, their values norms, standards and etc. are influenced by the culture of the workplace. This shows that culture does have an influence on employees’ behaviors.

 

Reference:

Brewster, C., Sparrow, P., & Vernon, G. (2007). International Human Resource Management. The Broadway, London: Chartered Institute of Personnel and Development.

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January 6, 2011

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The Impact of National Culture on Organizational Culture and HR Practices

 

The main HR practice discussed in this blog is the reward system. Not knowing what motivates your employees will result in having a poor and ineffective reward system. A company should understand the organization’s culture in order to understand the values and beliefs of the employees. Doing that will help HR practitioners to know how to motivate the employees and what practices will success in doing that.

While researching about this topic I was wondering if the national culture had an effect on corporate cultures. What I found out was very interesting. Surprisingly national culture does have an effect on the corporate culture. Some values and norms that are found in the national culture do apply in  the corporate culture for example : “a human resources  manager from a global pharmaceutical company discovered that a major challenge in China, Korea and Taiwan was to persuade managers there to accept promotions. Among other things, their values were such that they did not wish to compete with their peers for career rewards” (Ross, 2000). This means that national culture also has an impact on HR practices. HR practitioners should study the culture they are dealing with in order to produce beneficial systems that will increase the performance and productivity of the employees. Since these managers refuse to compete against each other for career rewards HR practitioners should think of other ways that would motivate these employees to increase their performance.

Reference :

Ross, D. N. (2000, March 22). Does Corporat Culture Contribute To Performance? Retrieved January 5, 2011, from The Free Library: http://www.thefreelibrary.com/DOES+CORPORATE+CULTURE+CONTRIBUTE+TO+PERFORMANCE%3f-a066107050

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January 5, 2011

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Organizational Culture

The previous post mentioned the definition of the first type of culture that affects the Human Resources’ practices. In this post the defenition of the second type is discussed.

There are many definitions of organizational culture, below are a couple of these definitions:

• “A set of understandings or meanings shared by a group of people that are largely tacit among members and are clearly relevant and distinctive to the particular group which are also passed on to new members (Louis 1980).” (National Defense University)

 

• “A system of knowledge, of standards for perceiving, believing, evaluating and acting . . . that serve to relate human communities to their environmental settings (Allaire and Firsirotu 1984).” (National Defense University).

Reference :

National Defense University. (n.d.). Organizational Culture. Retrieved January 2, 2011, from http://www.au.af.mil/au/awc/awcgate/ndu/strat-ldr-dm/pt4ch16.html

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January 2, 2011

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Culture in Society

There are two cultures that have an effect on Human Resources practices in organizations. These two cultures are : the organizational culture and the culture in the society itself.

So what is meant by both cultures ?

First to be mentioned will be the culture in the society itself since it affects the organizational culture. A culture in a society has various meanings that were collected by different academics. I have mentioned several definitions below:

• “Culture refers to the cumulative deposit of knowledge, experience, beliefs, values, attitudes, meanings, hierarchies, religion, notions of time, roles, spatial relations, concepts of the universe, and material objects and possessions acquired by a group of people in the course of generations through individual and group striving.” (culture)
• “Culture is the systems of knowledge shared by a relatively large group of people. “(culture).



Reference :

Culture. (n.d.). Retrieved January 2, 2011, from Culture Definition: http://www.tamu.edu/classes/cosc/choudhury/culture.html

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January 2, 2011

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Introduction to Culture

Hello,

Hopefully the previous posts gave you a better understanding of rewards. The posts now will contain information about culture that will help you understand the link between culture and organizations.

I hope you enjoy the coming posts.

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January 2, 2011

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The Significance and Benefits of Rewards

Is it really important to have reward systems? Why is that?

The Significance and Benefits of Rewards

            Rewards may seem a very simple thing to some. They wouldn’t think that it is an issue that is essential in setting the productivity of the company. Once you think of it deeply you realize how important it is to companies.

Thinking deeply about rewards will make you think of its benefits to companies. A total reward approach has many benefits. In this article I will be talking about one of the benefits that in my opinion is the most important one.

            “Winning the war of talent” (Armstrong, M. 2007) is one of the benefits that can make an organization one of the best in the market. The Koala Consulting and Training mentioned in their article that one of the benefits of rewards is attraction: “A reward system is intended to attract and retain suitable employees. An employer who develops a reputation as “cheap” is unlikely to be desirable in the job market, because potential employees will think it does not reward effort. Such an organization is likely to end up with the people that nobody else wants.” (Reward Systems, 2008) If the reward system in a company made the employees comfortable in the workplace and if it caused the increase of productivity this will be a good sign to attract employees from other companies. If the company became an “employer of choice” or “a good place to work” it will attract the talented employees that are found in the market of employees. It will encourage employees that are working on other companies to want to work in this company. It will make them apply for jobs in the company even if there were no vacancies. This will make the company gain comparative advantage. It will make it be one of the best companies in the market since it has the best employees. The company will get all the talents needed to reach the quality and goals that are set.

            The previous paragraph shows the significance of rewards. As Sandra O’Neal mentioned total reward strategies can address the issues created by retention and recruitment. It can also influence the behavior of the employees.

Reference:

Armstrong, M. (2007). Employee Reward Management And Practice.  Great Britain: Bell & Bain.

Reward Systems. (2008). Koala Consulting and Training. Retrieved November 28, 2010, from http://www.koalacat.com/archive/016RewardSystems.pdf

 

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December 3, 2010

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The Aim of Reward Systems

What do organizations aim for when they set reward systems?

The Aim of Reward Systems

 

     Companies and organizations always aim for the best performance they can get from their employees. That makes the reward system essential in companies. It is the way by which companies can encourage employees to work harder and increase their effort while doing their job.

     The aims of reward systems may differ from a company to the other. Some of these aims are: motivation, development of high performance, and rewarding the right behavior.

     Employees get motivated when they feel that they are appreciated for their work. Rewards are the best way to motivate employees and encourage them to work harder. “The promise of a bonus or a pay rise is intended to encourage employees to motivate themselves to reap the rewards.” (Reward Systems, 2008). Pay that is related to the performance of the employees is mostly used in organizations nowadays. As mentioned in an article published by Koala Consulting and Training, 70 percent of companies in Canada use this type of reward to motivate their employees.

            When employees are motivated by the appreciation they get; they try to perform in a better way. This will develop a high performance work place in the company. Employees will increase their effort while doing their job will create high performance that will result in having a high percentage of productivity.

            Another aim of rewards is that by this way companies can show the message they try to send to the employees. Rewarding an employee for a behavior he/she has done is a way to show other employees what is asked from them to do in terms of behavior. Moreover, rewards can be used to send a message showing the outcomes that the company is expecting form its employees.

  Reference:

Armstrong, M. (2007). Employee Reward Management And Practice.  Great Britain: Bell & Bain.

 

Reward Systems. (2008). Koala Consulting and Training. Retrieved November 28, 2010, from http://www.koalacat.com/archive/016RewardSystems.pdf

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December 3, 2010

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Different Types of Reward Systems

What Are The Different Types of Rewards?

Different Types of Rewards

 

     Rewards can be divided into four categories: Transactional, relational, individual and communal. Some rewards can be considered as transactional and individual in the same time. Others can be considered as relational and communal.

     Transactional rewards are tangible. They include the financial rewards. These rewards can be easily copied by competitors. In addition, individual rewards are the ones that are given to employees individually. It is meant to be for an individual employee. An example of a transactional individual reward is the contingent pay. Contingent pay is “Additional financial rewards may be provided that are related to performance, competence, contribution, skill or experience.”    ( Armstrong, M. 2007)

     Rewards can also be intangible and these are called relational rewards. These rewards are essential to enhance the transactional rewards (financial rewards). Relational rewards “are less easy to imitate by competitors.” ( Armstrong, M. 2007). Furthermore, Communal rewards mostly include rewards that have to do with the work environment or community. This makes it related to relational rewards and somehow makes it a part of it. Examples of relational communal rewards are: employee voice and recognition.

     Employee voice occurs when the company takes the views of the employees into consideration, listens to them and acts upon them. Employee voice is defined as “ the term increasingly used to cover a whole variety of processes and structures which enable, and sometimes empower employees, directly and indirectly, to contribute to decision making in the firm”. ( Armstrong, M. 2007) This is considered as a reward for the employees because it recognizes the contribution of the employees that might cause the organization to succeed and gain more profit.

     Recognition is considered one of the best methods of rewarding employees. It shows them that the company appreciates their effort. It increases their self esteem which allows them to be more comfortable in the workplace. It also makes them gain the respect of other employees in the company. There are many ways for recognition to take place in the company. It can either be by promotions or by giving positive feedbacks by managers. 

     This article summarizes the model of total rewards that shows the different types of rewards. Rewards can be financial and non-financial. Combining both transactional and relational rewards will create a powerful reward system which will be hard to copy by competitors. Having a powerful reward system will create a positive work environment which will also result in having hard working employees. Moreover, this will create a company that will be an “employer of choice”. It will attract the most skilled employees to the company which will help the company gain comparative advantage.

 

Reference:

Armstrong, M. (2007). Employee Reward Management And Practice.  Great Britain: Bell & Bain

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December 3, 2010

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