The Pay Roll Strategies And Employees Performance Commerce Essay

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The study focuses on the effect of the payroll strategies formed by HRM in relation to the organisational performance. Designing a pay structure for an employee is a complex task for a HR manager. Several payroll strategies in British Airways from the executive level to the sales assistant level has been designed during the year ended December 2008 by the HR manager. Using organisational level financial data and the non-financial data from British Airways during the year ended December 2008 the study provides econometric evidence of the improvement in the performance of British Airways both financially by the increase in the profit margin and non-financially by the increase in the sales. In addition to this relative performance of the employees in British Airways will be analysed.


The aim of the study is to find whether the HR strategies in payroll help to improve the performance of an organisation.


To clearly present the review of literature about how the pay strategies formed by HRM are related to the organisational performance

To understand whether these pay strategies really help in improving the performance of an organisation

To focus the performance of an employee based on the pay structures in the organisation


"Relationship between PAYROLL Strategies and Employees performance "

A case study on International Airways

Why this topic?

Pay and performance have direct relationship in the modern world end of the day every one needs money to lead a healthy and happy life. But is that true if the pay is good the performance is also good we can't justify and it is consider being a myth. So I want to explore and find out how far payroll strategies affect the employees performance.


Chapter 1: In this chapter, Introduction to HR Strategies and the main objectives of the project has been discussed. It also covers the benefits of pay roll strategies

(This information will be collected from the company handbook of airlines and books available to support my topic)

Chapter 2: Literature review of Human Resource strategies and its impact on employee's performance and motivational factors will be discussed.

Chapter 3: This Chapter tells about company profile of British Airways, Air India and Emirates.

Hr policies of these airlines and its relationship with the employee's performance will be explained.

Chapter 4: In this Chapter, the different research methodologies and the selected methodology are discussed.

(Books and reference to past research will be considered

Chapter 5: In this Chapter, Data analysis using descriptive research method and discussions for the findings of the questionnaires are reviewed.

Chapter 6: Findings and results will be explained with diagrammatic presentations.


The strategic HRM includes the process of defining the plans and procedures for the organisation and also ensuring these strategies are integrated with the business strategies. The HRM plays an important role in formulating the strategies and also on the implementation of these strategies. According to Jack Welch, "the strategies dependent on the people, people drive the strategy and the strategy does not drive itself". Also Welch states that "Change does not come from a slogan or speech. It happens because you put the right people in place to make it happen. People first and strategy and everything else next...Getting the right people in the right jobs is a lot more important thing than developing strategy. ..I sat in rooms for years, looking at promising strategies that never delivered results. We had great plans for ultrasound but we could never make them happen until we found a perfect person with ultrasound in his veins. We had service strategies in aircraft engines, power and transportation for years. Service was always a second-class citizen until we put the leaders in place that had the courage to "kick ass" and "break glass"..." (Welch, 2001).

In the formulation of strategies HRM gives input for the human resource opportunities in the external environment and also it provides input on the strength and weakness of its capability and its commitment relating to the environment. These inputs provided by HRM are more important to formulate the feasibility of the strategies. It is also necessary that they need to ensure that the people-related business issues are being considered during this formulation and before deciding any strategy. (Amos, 2009). During the execution of the strategies HRM gives an outline on the ways that the business is being performed currently in the organisation, then makes an audit for the given outline and finally identifies the changes are needed within the organisation for the successful execution of the strategies (Delaney, 1996,). The most important thing to be considered here is that the way in which the organisation is currently performing the business is facilitating the execution of these strategies. This should be ensured during the audit (Barney et al. 2001).


Methods available for my research are

Research design is the general plan of how the research is made about answering the research questions. It contains the clear objective derived from the research questions, specify the sources from which the data is collected and the constraints are considered. It should be perfectly legitimate and clear. A clear distinction between the design and the tactics must be presented. There three types of research studies exploratory, descriptive and explanatory studies (Saunders et al, 2007)

An exploratory study is a valuable means of finding out what is happening, to seek new insights, to ask questions, and to assess phenomena in a new light (Robson, 2002). It is particularly useful to clarify the understanding of a problem. There are three principal ways of conducting exploratory research which include a search of the literature, interviewing experts in the subject and conducting focus group interviews (Saunders et al, 2007).

Descriptive research studies are to portray an accurate profile of persons, events or situations (Robson, 2002). This may be an extension of a forerunner to, a piece of exploratory research or a piece of explanatory research. It is necessary to have a clear picture of the phenomena (Saunders et al, 2007).

Explanatory studies establish casual relation between variables. The emphasis here is on studying a issue or a problem in order to explain the relationships between variables. The data can be qualitatively collected to explain the reason (Saunders et al, 2007).


Primary data

The primary and the secondary data are the two important forms of data required for the research. The primary data are the form of data that collected from the the primary data can be collected by different data collection methods (Robson, 2002).


Questionnaires are one of the most popular methods of collecting the data. This method is difficult to design and may require many rewrites. The major advantage with this is it can be used in its own right. There are two types of questionnaires like the closed-end questionnaire and the open-ended questionnaire. The range and types of questionnaires that can be used, their design, uses and implementation can vary enormously, both from the point of view, for example, of the structure of the questionnaire, how it is administered, and methods of analysis and interpretation (Robson, 2002). A highly formalised and structured questionnaire comprises of pre-determined closed questions which are administered not face-to-face with the respondent. This method of data collection can be highly complex activity requiring skills and techniques that quite honestly require specialist training and knowledge. The following represents some of the key aspects of questionnaire design and implementation and here the researcher must consider the following,

The range and scope of the questions to be included

Question types, for example open or closed

Content of individual question

Question structure

Question wording

Question order (Saunders et al, 2007)


It is a technique which is used to gain the understanding of the reasons that are underlying and the motivation for the attitudes of the people, preference and their behaviour. The advantage of interview is the response rate will be better. There are several types' interviews like the structured interview, semi-structured interview and unstructured interview. Semi-structured interviews are the widely used form of interviews. The questions centre on the researcher taking a respondent through pre-determined issues and topics, but not in a rigid manner or necessarily in a rigid order. The difference between this type of questioning technique and conversation is, of course, the fact that the topics and issues to be covered and largely determined in advance as are the individuals whom the researcher intends to interview (Saunders et al, 2007).


It refers to the intensive examination to the particular unit like the small group, person or the company. It involves the measurement of what is really there and how it is there? (Saunders et al, 2007).

Secondary data

Secondary data is essentially "second-hand" data in as much as it is not new data collected specifically and primarily for the purpose of consultancy being conducted. The secondary data are used before collecting new data because the collection of the new data is much more expensive and time consuming. There two major types of secondary data internal secondary data and external secondary data. The internal secondary data is data that already exists within the organisation in some other form or another. External secondary data includes all data which again already exists but which has been collected outside of the organisation. It is the form of data obtained through reanalysing the data that have already been collected for some other purpose (Crowther and Lancaster, 2009). The secondary data include both raw data and the published summaries. Most of the organisations collect and store variety of data to support their operations for example payroll details, minutes, meetings and sales of the goods and services (Robson, 2002).

I am going to use questionnaire methods by distributing the questionnaires in Terminal 5 employees. Applied for the permission to conduct the research with British Airways, Air India and Emirates.

Research Outcome:

The relation between the payroll strategies and employee performance appears to be a widely accepted fact as the analysis of SSP gives a clear picture of the direct relation between the payroll schemes and employee performance. As there are attractive payroll schemes in an organization the employee put forth more effort to improve his performance. Only few studies (Sturman et al) criticise that the employee performance changes over time and not entirely based on the payroll schemes. The reason behind this concept is that the payroll schemes alone do not improve the performance of an employee or the organisational performance. The payroll scheme acts as a good motivator for the employee to perform better. Also there are other factors like good training, non-cash rewards which also proves to be a good motivator for the employee to perform better. The overall correlation between all the motivational factors for the employee works out in determining the performance of an employee in an organisation (Lorenz, 2005).

Few studies (Wright et al) supports that there is a positive relation between HR strategies and organisational performance but there are no strong evidences supporting the concept. Using organisational level data and through the analysis of the statistical variables the study shows that the payroll strategies formed by HR for the improvement of the performance of the organisation has a positive effect but the results from other similar studies show that payroll strategy alone does not have a direct impact on organisational performance but also other HR strategies formed for improvement of training, employment, other HR policies and practices all combine together to have a positive impact over the performance. According to the evidence the payroll strategy does not have a direct impact on the organisational performance. The payroll schemes acts as a motivator for employee performance and this improves the performance of the employee. When the performance of the employee improves the performance of an organisation also improves. Also not only the payroll schemes formulated by HR helps to improve the performance of an organisation but the other HR strategies in training, promotion, etc also acts as a good motivator and all these motivational factors determine the performance of an organisation (Lorenz, 2005).