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The report is based on case of employee grievance as it occurred in Putteridge Solutions plc Software Companys a result of a decision taken by Top Management to reduce extrinsic rewards e.g annual bonus. This led to a demotivated workforce. According to literature review and research findings, keeping employees engaged turns out in more profit for the firm. Techniques like Gallup and NetPromoters and workforce inside tool gauge the employee engagement level. With the help of Intrinsic rewards like promotion, recognition, and safe environment etc engagement level can be promoted.
Further in the report, strategies have been proposed for overpowering employee grievance from where it starts. These may be linked to general problems, rewards and retention policies etc.
We can conclude that industrial grievance can be resolved without giving intrinsic rewards to employees and by only the systematic application of HR strategies. The report provides insight into further research on employee retention and engagement.
This report aims at providing a solution for Putteridge Solutions plc – a US based Software company- through a focus on employee rewards and employee relations. The company has handsome salary packages but the reward system of bonuses is not very appealing. Due to recession, the company’s market share was reduced. Hence it was decided to give a partial annual bonus and waived the team bonus. No annual bonus was also being given for the next year and this caused a great amount of grievance among employees. The main problem is low employee engagement which is in turn affecting organizational performance.
The HR Manager has put forward a new proposal for the management. It puts forward a new set of strategies, reward and retention practices such as intrinsic rewards, training for managers , flexible work environment and a suggestion on various ways to engage employees. This proposal also elaborates on the suggested cost and time implications of implementing these strategies. It lays a strong focus on arguments for convincing both the managers and employees.
3. Literature review
3.1. Employee engagement
According to Macey & Schneider (2008) “Employee engagement” refers to employee commitment, and connection felt towards work and also relates to the attitude adopted by an employee at work place. Kahn (1990) combines the intellectual, emotive and physical facets of the same. Emotional perspective is about employee perceiving things, physical perspective is about maintaining an energy level at the workplace. This cognitive aspect of Employee Engagement is also highlighted by Saks (2006) and states employee engagement in terms of emotional and intellectual commitment of employees.
Hence the majority of authors have indicated in their research that employee engagement is crucial for high performance of organization and also for attraction and retention of capable workforce.
Definitions by companies
Vodafone defines as “it is an outcome or result of employee which has devoted to something – a very preeminent attempt which has freely given” (Suff, 2008).
Dell Inc. stated that “it is process of imparting time and talent to group construction activities” (CAHRS, 2007).
It is evident here that human capital can be developed through training programs and investing in employees and this way it would be a two way process of Organization development.
Definitions by research institutes
The CIPD (2011) said that “It is combination of pledge to the establishment and its worth plus readiness to assist colleagues. It has not only emphasis on motivation but also on job satisfaction where employee has to give expected results”.
Hewitt Associates defined as “Employee engagement is energy, passion to perform the job by employee at their greatest level as per the instruction of employer. It has seen that fully engaged employee can say, impart effort and stay for long time which is essential for success of any organization and success of HR” (Baumruk & Marusarz, 2004).
It can be implied that although organization can play a significant role in Employee Development, however, the individual employee goals and Organization’s strategic goals should be aligned for better growth of both sides.
3.2. Measures of employee engagement
For measuring Employee Engagement survey methods could be used Balain and Sparrow (2009). Following are the types of Engagement that can be used:
Investigation of IES engagement
Assessment of Gallup agency
Workplace Inside tool (WIT)
Investigation of IES engagement
Robinson (2007) put forward the concept in which management provides a questionnaire to be filled by employees on how they can contribute to an organization’s success and what their level of commitment is. A scale of 1-5 is used.
This tool is beneficial in gauging employee attitude towards organization and if they are contributing positively or not. Management can also have an insight about attitudes of employees towards the organization.
Assessment of Gallup agency
12 questions, attempted at gauging employee engagement level were put forward by Buckingham and Coffman (1999) as a result of the empirical study conducted by organizations and health care centers. These questions centered on employee satisfaction, and employee expectation. These were then linked to organizational performance outcomes such as productivity, employee loyalty and retention (Bates, 2004).
Gallup Tool Management helps comprehend the job satisfaction level essential for employee engagement. Management is in a better position of taking relevant actions once they are familiar with employee expectations.
Hence it can be concluded that through Gallup technique, to what extent do employees really want to come up with recommendations for organization for improvements.
According to MNC’s like Barclays (2008) Organization can easily understand employee engagement level by asking employee simple question like what you would like to recommend to organization to become good workplace?”
This method mainly aims at recognizing three categories of employee’s loyalty of promoters (passionate worker), neutral (unenthusiastic) and detractors (adverse employee). According to Satmetrix Systems (2006), a higher net promoter score is equivalent to a higher employee engagement level and relevant steps can be taken accordingly.
Workplace Inside tool (WIT)
Best companies (2011), there are specific areas that should be improved with respect to employee engagement; these include as productivity, employee trust, how attentive and accommodating a manager is, how flexible are the working conditions and exclusion of long working hours. This is also regarded as workplace inside tool (WIT) through which management seeks insight about employees and together work towards enhancing organization’s overall performance. Weak areas can be identified and improved based on insights revealed from this technique.
3.3. Mode of encouraging employee engagement
Robinson (2009) states that employee engagement is based on factors like characteristics of employee and job nature. Each of these factors requires a different perspective to be looked t by management and prepare strategies accordingly. Below are some of the way of enhancing employee engagement:
Employee growth programs
Rewards and acknowledgment
Secure working environment
(Refer to Appendix – 1)
3.4. Situation analysis
At present, organization is putting into practice a mixture of HR strategies for employee rewards and employee relations. The policies are as below:
Annual bonus is calculated using annual profit as the basis. UK employment law is being adhered which makes payment of annual bonus mandatory based on the number of working days of previous year. This is one of the intrinsic reward inspiring employees to perform well. Companies house, 2010).
A high performance on team’s behalf is synonymous to getting a team based bonus. There are some plus and minuses to this approach however. Pluses emphasize on the fact that team will be motivated due to appreciation from the management and negative points include the fact that individual high performers might be overshadowed as a result of team performance (Luthans, 2002).
High reliance on external training programs becomes essential here because it is impractical to train employees all round the year. Competitor’s competency is also taken into account.
Main focus of rewards
Main focus is on extrinsic motivation compared to the intrinsic motivation which is the case with most of the organizations thereby giving high salaries. The reason is the UK is neo-liberal economy where organizations think it as a liability to train employees. Best performers are given preference. Employee output is focused on and hence the high performers are developed. This is a main reasons of employee grievances and need to be checked.
Root cause of employee grievance
Management has decided to reduce annual and team based bonus and this is the main reason of employee grievance. Secondly, more importance is being given to extrinsic rewards than intrinsic and employee relations.
3.5. Proposed HR strategies to improve employee engagement
After scrutinizing the existing condition and in order to plan and implement new HR strategies,
A. Related to general issues
To arrange joint meeting of all employees
Letting employees know about the current situation of the company is essential. Joint meetings of employees and arranged should be arranged to clarify matters and leave no room for ambiguity. This would be a proactive approach to thwart the unionized motion because postponement in the clearness of decisions gives rise to union therefore it is should be implemented immediately. (McLeod & Clarke, 2010).
Succession planning policy for key employee
The company is a small company and as such recommendation is to begin succession planning training rather than finding talent from outside of the firm. Like Apple Inc. had applied similar strategy for Tim Cook and in August, 2011, as an alternative of Steve Jobs (CEO) Cook was promoted as CEO (Apple press Info, 2011).
B. Related to employee rewards
Replacement of team based bonus with individual performance bonus
Team bonuses should be replaced with “Individual performance bonus”. All employees’ appraisal will be conducted on a monthly basis by line mangers. High performers will be entitled to receive bonuses from HR Department and a certificate will also be given. Individual targets should be kept for employees and individual bonus on a monthly basis and annual bonus for subsequent year should be announced. Vroom’s expectancy theory explains this idea that employees expect bonus for their own motivation.
Career development programs
At present there is staff working in the technical area of the organization and they need to be provided with career planning. HR and all HOD’s will prepare profession plans for respective employees the basis of job descriptions and key resulting areas of employee. This plan will be communicated to employees through workshops and trainings (Armstrong, 2009). This will be helpful in motivating and retaining employees and build a committed workforce (Dessler, 2004).
Introduction of analytical job evaluation which gives recognition, authority and promotion scheme
analytical job evaluation are important to be implemented as it emphasizes on the job at hand instead of the person. It becomes important for management to sort out the high performers in order to develop employee engagement.
Pay motivates employees to an extent. In this case a meeting will be conducted with HODs and employees and considering seniority and experience existing employees will be promoted.
Emphasis on training and coaching of line manager capability
Instead of relying on an external trainer and competitor, existing line mangers will act as trainers. A training calendar for one year will be prepared through training need analysis. This will then be rotated in all departments. Training such as industrial safety, customer services and technical updates in class room and on the job trainings will be delivered.
Introduction of flexible work environment policy
Flexible timing will be provided to employees as a majority of them are doing field work. The technicians, almost (300) needs to be performing their jobs in response to customer requirement. A compensatory off will be arranged to be utilized in case of emergency. Overwork policy will be set in accordance to the same policy.
C. Related to employee relations
Some strategies related to employee relations that can help build an engaged workforce are as below:
Introduction of employee voice scheme
Employee voice is new concept broadly used to cover employee relations and facilitate employee engagement. This can be stated in three ways as follows:
This means a joint meeting ,every month, between staff and management for communicating current situation and issues of common interest (Allen, 2009). Additionally, clear communication of information is essential to dispel doubts and qualms in employees regarding their position and value in organization.
Attitude survey by WIT
It can be done by implementing “Workplace Inside Tool” (WIT) through which management can comprehend flaws of employee rewards policy as well as employee relations (literature review) by asking direct questions through questioners in interviews. Departmental experts and HR will be designing the questions together. (Marchington et al, 2001).
This will be conducted after every three months. This will provide insights into understanding employee viewpoint regarding improvement areas in organization. (McLeod & Clarke, 2010).
Suggestion boxes can be arranged too.
This will help those employees who cannot voice their concerns loudly and openly to management. It will be studied by HR on monthly basis and significant suggestions will be executed (Armstrong, 2009).
Participative role of manager
Morgan (2004) said, effective manager’s communication helps in engaging employees with their work. CIPD (2011) said that manager should check with, inspire and support employees by giving them demanding jobs and heeding to them so that employee participation is improved, which is mandatory for engaging the workforce. Consequently, employees consider that management listens to them. Consequently, a manager’s participative role is significant for extraordinary employee engagement.
Department wise morning meeting
All employees should be brought together by discussing issues with management before the work starts every morning. These should be about daily matters day forecasting and dissolution of problems. Communication gap is removed or bridged so to say by doing activities of the sort.
It helps to eliminate conflicts and misunderstandings between employee and manager and enables employee participation and employee engagement (Millward et al, 1992).
Celebration of Birthday
Employee birthdays should also be arranged. HR should display birthday greeting for the person whose birthday it is on notice board and through lunch breaks birthdays should be made a sweet affair. It will stimulate healthy environment and foster employee engagement (Maund, 2001).
3.5. Implementation of proposed HR strategies
(Refer to Appendix – 2)
Thus this report concludes that employee engagement is an ongoing process which determines accomplishment and failure of an organization. Numerous definitions of employee engagement entail that engaged employee has a higher performance which is required for organization success, as opposed to those employees who are not that motivated. Several methods of employee engagement e.g. “Workplace inside Tool” is the best tool because it gives detailed insights about employee rewards and employee relation policies and procedures.
According to the report, main basis of employee grievance is a lack of focus from management on intrinsic rewards and employee relations. The report also emphasizes on inherent motivational aspects like acknowledgment, appreciation, authority, elevations, career development programs, and safe work place as new HR strategies to promote employee engagement. Moreover, stress on training of managers, employee voice scheme, birthday celebrations, a participative role on manager’s behalf and d morning meetings everyday are the finest employee relation practices that support in motivating, developing and retaining employees for a longer term.
It can be established that most of the HR strategies proposed here necessitates little cost for the execution. Therefore this report can make big influence for disbanding the current grievance but there is need of equivalent input from employee and management side too. There are limitations to this report though. It focuses more on the employee rewards and employee relations where attention is being paid to the ongoing processes, that is to say the current scenarios. The report does not take into account any sort of attitude survey. A basis for further research on ‘Industrial grievance handling processes’ is however being presented here by this report.
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