Handling specified work and use of resources

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Organization is the place where the community use to handle the specified work and this work is done only when the organization use the appropriate use of resources. There are many types of resources use in the organization some of them are capital, raw material, infrastructure and many other things. But from all this resources the main is labors because without labors the other resources cannot be use. So labor is the important factor in resources.

As labor are important factor in the organization, the organization has to take a proper care of their labors or employees because if they don't take the care of their labor then labor will also stop working properly. Because of this reason the company or organization uses to give benefits to their employees. The benefit provided by the organization can be small or a big it depend on the skill of the employees because all the employees in the do not have a equal skills and knowledge every employees are not equal. There for the benefit are also given as per the knowledge, skill, experience and the work done by the employees. And by providing these benefits employees are more eager toward the works.

Benefit provide by the organization can be Bonus, Compensation, Allowances, Medical facility, Transportation facility, Financial reward, Paid leave, and many other facilities.

In the organization the manager always want that the organization should run smoothly and to run the organization the employee should work properly and the employee will only work properly when they get some benefits, so be to work done by the employees the organization give benefits.

So the main objective of giving benefits to the employees is to gain some work from them, and if the employees work properly the organization will have a good future.


Any employee will join the organization if he is been paid properly and if he is getting the additional benefits (Bonus, Reward, Promotion, compensation etc). So this all factors are important for the organization to provide to their employees.

The reward or a benefits provide by the organization can be in two ways it can be by Monetary or non-monetary

Monetary reward: - It can be in form of money, the benefit provide in the form of money is known as monetary reward.

Non-Monetary reward: - It can be in form of appreciation or motivation. The reward which is been given but not by financially is known as Now-Monetary reward.

Monetary reward can be known as financial reward and non-monetary reward can be known as non-financial reward.


In financial reward is given to the employee in the form of money, and it is given as per the work done by the employee of the organization. There are few examples of the reward paid by the terms of money are as follow.


Pay for Performance is a method in which the reward is paid as per the performance.of remuneration that links pay progression to an assessment of individual performance, usually measured against pre-agreed objectives. Pay increases awarded through PFP are normally consolidated into basic pay although sometimes they involve the payment of non-consolidated cash lump sums. The label pay for performance covers a broad spectrum of compensation systems that can be clustered under two general categories: Merit pay plans and variable pay plans, which include both individual and incentive plans. (Milkovich G, Wigdor A) The evidence of pay for performance, pieced together from research, theory, clinical studies, and surveys of practice, suggest that, in certain circumstances, variable pay plans produce positive effects non-individual job performance. However the evidence is insufficient, to determine whether merit pay can enhance individual performance or to allow us to make comparative statements about merit and variable pay plans. (Milkovich, T., Wigdor, A)

Performance related pay has gone through a number of stages in its history. Firstly it was supposed to increase organisational efficiency by motivating staff to achieve organizational goals. Then attention turned to rewarding staff whose performance was superior on equity grounds i.e. it is not fair to pay someone who is making an effort, the same as someone who simply comes to work and does the minimum amount of work to keep their job. (National Association of Health Authorities and Trusts)

8.1 There are two models in particular highlight the key success factors that any PFP scheme will be required to be effective 1. Expectancy theory 2. Maslows hierarchy of needs

Effort -----------àPerformance ------------------àOutcome

Expectancy Instrumentality

According to this model PRP scheme requires three things to be effective :- people need to see that increasing effort (what they actually put into a job)does increase performance expectancy. It should be clear that increase in performance leads to a reward. This is sometimes referred to as transparency. Finally people need to value the reward. Now the problem arises weather people will value the reward differently. Money for example (especially small amounts) many not be valued highly enough to get people to increase their effort .It is therefore important to understand how people value different rewards. (National Association of Health Authorities and Trusts)

Another explanation is Maslow theory of needs

In practice these models would suggest to be effective A Performance related pay scheme needs clear goals, transparent links between effort and performance ,fair links between performance data and reward ,to motivate and a reward which is valued by an individual . Each of these points are described below:

To motivate: - According to research most of the people overestimate their performance because they do not get their pay rise so the employees feel they are getting demotivated rather than motivated in their work. According to occupational physiologists PRP is a reward for past performance it does not motivate people to increase their future performance. (National association of health authorities and trust)

Ex. 75: Barry LaBov, CEO of the Fort Wayne, Indiana-based LaBov & Beyond, a marketing communications company, suggests every good human resources professional find new ways to offer incentive rewards that help support specific corporate goals. "People are people and they want to be recognized," he says. "The programs that fail revolve around rewarding performance that doesn't support company goals. Improving sales performance, for example, is not enough. Today you need programs that support such issues as profitability, loyalty and customer satisfaction. And you have to do it without alienating other people within the organization." (http://hbswk.hbs.edu/item/5703.html)

Ex. 76: Dallas-based Texas Instruments, for instance, offers bonuses as well as non financial recognition, including personalized plaques, parties, movie tickets, golf lessons and team shirts and jackets. The number of individuals recognized in this way jumped up to 400% in one recent year. (Dessler, G., 2005)

Ex. 77: at Intuit, an extended weekend for two including airfare, hotel and spending money is the most popular web based recognition award amongst the employees who do the good job. (Dessler, G., 2005)

Ex. 78: At Metro Motors in Montclair, California, the name of the employee of the month goes up on the electronic billboard financial planning products and services, regularly evaluate their customer service reps based on specific standards. Those who exceed those standards receive a plaque, a $500 check, their photo and story on the firm's internal Web site, and a dinner for them and their teams. (Dessler, G., 2005)

Ex. 79: Airwick industries award televisions and Lenox china as special sales awards. (Dessler, G., 2005)

Ex. 80: A natural gas company of Pittsburgh modified its compensation program in order to achieve its goals by clarifying job expectations , to provide communication and feed back and individuals exceeding performance expectations. By modifying the compensation the company's report showed that employees increased their output by 15 to 35(Sherman A , Bohlander G , Snell S)

Ex. 81: Oakite Company uses several recognition awards to boost sales. A Presidents Cup is awarded to the top division management and there is a VIP club for the top 105 of the sales force in total $ sales. Okaite publicizes the VIP club within the firm and belonging carries a lot of prestige. (Dessler, G., 2005)

Ex. 82: Mercer Human Resource Consulting found that just 28% of the 2600 U.S. workers it surveyed said that they were personally motivated by their companies' incentive plans. Only 29% said their firms rewarded them when they did a good job. Employees did not see a strong connection between pay and performance and hence, performance is not particularly influenced by company's incentive plan. About 70% of the employees felt that their firm's pay for performance plans were ineffective. (Dessler, G., 2005)

There are many other different forms of performance related pay, which may be used on their own or side by side. Employers may move from one to another. Most common are:

Piecework:- a price is paid for each unit of output; this is the oldest form of performance pay.

Payment by results:- bonus earnings depend on measured quantities or values of output for individuals or groups, usually based on work studied time units; this covers a wide range of bonus schemes.

Ex. 93: Today, the notion of linking pay to a wider definition of employees' 'contribution' rather than simple 'performance' is gaining ground. This emphasises not only performance in the sense of the output (the end result that is achieved) but also the input (what the employee has contributed in a more holistic sense).

Under a new merit pay scheme at Kent County Council, for example, the review process assesses four elements including behaviours (inputs) as well as the delivery of personal objectives linked to business requirements (output).

Ex. 94: Metiom, Inc., New York based E-commerce infrastructure firm, needed a sales incentive programme and thus it set up one called the "inner circle". After meeting specific sales targets 30 top sales people and their significant others got a trip to paradise islands in Bahamas. The programme motivated the company's sales force. (Dessler, G., 2005)

Plant or organisation wide incentives: bonus earnings or pay levels are based on measured quantities or values for the whole establishment.

Ex. 95: The annual employee bonus at Thermacore, Inc. is one way the firm lets employee share in the wealth generated by operations during the year. The unique aspect of programme is that all employees receive the same amount of bonus regardless of total compensation, seneriority of position in the company. (Dessler, G., 2005)

Ex. 96: A large group of California physicians given financial incentives to improve the quality of medical care have begun to embrace some changes important to advancing quality. However, many health plans are still waiting for more conclusive evidence of improvement, according to a RAND Corp. study. (http://www.orthosupersite.com)

Merit pay: bonus earnings or pay levels are usually based on a general assessment of an employee's contributions to performance; this is an earlier, less structured form of the next system.

Ex. 97: Women could lose in switch to merit pay

PERFORMANCE related pay systems, used increasingly by more than half British employers, may systematically and unlawfully discriminate against women, according to research published today.

Civil servants, teachers and other public sector workers are having such systems imposed on them as part of the Citizen's Charter, while some form of merit pay is common across industry.

Differential salary awards could amount to 4-5 per cent a year between the sexes. The Institute of Manpower Studies, which carried out the research on behalf of the Equal Opportunities Commission, said large numbers of organisations could be laying themselves open to legal challenge.

It found that many schemes were subjective, reinforced sexual stereotypes and led to women receiving lower pay rises even when their performance ratings were the same as men. 'There is the clubbable manager who may involve many non-work related factors, such as whether the person is 'one of the lads' or a 'good mate',' Marc Thompson, one of the authors of the report, said.

The likelihood of sex bias has increased with the growing tendency to push decision making over pay down to line managers. (http://www.independent.co.uk/news/uk/women-could-lose-in-switch-to-merit-pay-1559642.html)

-MARTIN WHITFIELD, Labour Correspondent Monday, 26 October 1992

Ex. 98: Several firms including IBM and Motorola, award bonuses to employees whose work wins patents for the firms. (Dessler, G., 2005)

Performance related pay: bonus earnings or pay levels are based on an assessment or appraisal of an employee's (or team's) performance against previously set objectives, usually part of a performance management system; this is a fairly recent development, particularly in the public sector, which has grown sharply in use since the 1980s.

Ex. 99: Nucor Corp. is the largest steel producer in USA and also has the highest productivity highest wages and lowest labour in the American steel industry. Employees earn bonuses of 100% or more of base salary and all Nucor employees participate in one or more incentive plan which are production incentive plan, the department manager incentive plan, professional bonus plan and the senior officers incentive plan. (Dessler, G., 2005)

Ex. 100: Automotive an Indian based car dealer provides compensation for car sales people which is as high as 100% commission to a small based salary with most of the compensation as commission. Commission is generally based on the Net Profit on the Car when it is delivered to the buyer. This promotes the sort of behaviours the car dealer wants to encourage. It encourages the sales person to hold firm on the retail price and to push "after sales products" like floor mats, car alarms, etc. (Dessler, G., 2005)

Ex. 101: At Sibel Systems, about 40% of sales of each sales person incentive is based on factors like customers reported satisfaction with service. (Dessler, G., 2005)

Ex. 102: At one DuPont division, the employees at risk pay are a maximum of 6%. This means each employees pay will be 94%. Employees can then match or exceed their counterpart's part if their department reaches certain predetermined financial goals. (Dessler, G., 2005)

Competence based pay: reward and training are linked to competency frameworks, based on the worker demonstrating certain skills (eg. Problem solving, decision making, leadership, customer service, dealing with differing views) or achieving certain qualifications.

Profit related pay: bonus or share options are based on the organisation's profit performance; this is widespread in the private sector, where share options are often important for senior managers. Profit related pay has become less common since the government phased out tax relief on PRP schemes. (http://www.unison.org.uk)

Ex. 103: EMC Corp, There's no lid on commissions, and the 65% compared to some 25% at IBM, a rival in disc storage. But both companies enshrine the ardent US belief that salespeople will cease to sell unless the commission carrot is dangled before them.It's often backed by a heavy stick. At EMC, miss targets for two quarters, and you're out. But is that really 'the most effective way to motivate people to work productively'? Not according to Professor Jeffrey Pfeffer, writing in the Harvard Business Review. (Dessler, G., 2005)

((((((((((((((((((Ex. 83: The best example for Non monetary reward to the employees is Asda supermarket. Asda gives staff reward points for meeting the performance targets. Reward points can be exchanged for store credit or saves for larger purchases. Relationship marketing management (Little E, Marandi E.)

Ex. 84: "If you want to impact the bottom line, you must invest in people, and not just with money, but also with recognition rewards," says Steven Kimball, director of communications with O.C. Tanner (a provider, it should be noted, of corporate service/recognition award programs). "It's a matter of common sense and motivation theory that has been with us forever that says people work for more than just a paycheck. That should be proof enough." (http://hbswk.hbs.edu/item/5703.html)

Ex. 85: Texas instruments maintain an online "TI mall" that helps its 102 divisional managers provides merchandise and individual travel awards to employees who do a good job. (Dessler, G., 2005)

Ex. 86: A survey of 300 IT departments found that 77% were paying bonuses and incentives, including stock options and profit sharing, to IT professionals. Many are also offering benefits that are highly attractive to professionals, including better vacations, more flexible work hours, equipment for work office and improved pension plans. (Dessler, G., 2005)

Ex. 87: Non-cash rewards don't engender increased quality, productivity or creativity, either, says Alfie Kohn, one of America's leading thinkers and writers on the subject of money as motivator, and author of Punished by Rewards (Houghton Mifflin, 1993). He believes rewards programs can't work because they're based on an inadequate understanding of human motivation. One of the most thoroughly replicated findings in social psychology, he points out, is that the more you reward people for doing something, the more they tend to lose interest in whatever they did to get the reward. And when interest declines, so does quality. (http://hbswk.hbs.edu/item/5703.html)

Ex. 88: Many firms like Nortel Networks, Nextel Communications, Levi Strauss & Co., Barnes & Noble, Citibank, and Wal-Mart - now partner with online incentive firms to improve and expedite the whole process. Management consultant Hewitt Associates uses www.bravanta.com to help its managers more easily recognise exceptional employee service with special awards. After just 8 days , the online award request exceeded those from both its offline programs. (Dessler, G., 2005)

Ex. 89: Another example for Non monetary sounds richer, Falcon-Software Company, Inc rewards those individuals who are performing the best and are given to use company's limousine (Little E , Marandi E Pg131)

Ex. 90: Cara Finn is vice president of employee services at Mountain View, California-based Remedy Corp., a software company that builds and distributes applications forbusiness processes. To remain competitive in the hothouse of Silicon Valley, her company during the last four years has doled out to some 750 employees incentive rewards ranging from American Express gift certificates to spot bonuses and movie tickets. Only recently has Finn structured a "quality of life" program in which employees receive rewards after they've been with the company three, five or seven years. (http://hbswk.hbs.edu/item/5703.html)

Ex. 91: Kiwik financial services concentrated on six key areas such as working hours, customer services, facilities , pay , bonuses .three years later the business performance and working environment are transformed with major improvements in sales , customer rention and the profits were up by 60%. By the huge success improvements for employees in the work place by putting concierge, chill out room and a staff crèche was included in the site. In 2005 new flexible benefits package and pension plan were introduced. As a result staff turnover and absence were fallen significantly .So by increasing pays and bonus the work has gone up from 64% to 84% which is almost the half has gone up. As a result of all these kwik fit financial services won the CPID's annual people management award in 2005 for delivering fantastic performance through employee involvement. And also the company moved up to number 15 in the Sunday times best companies in 2005. (Armstrong M, brown D.))))))))))))