Differences Between the Uk and China on Intangible Rewards

Group A
Wenhan Wang (Vince)
Final draft
16/12/2011
Word Count: 1001

Admittedly, it is very complex to determine the precise incentives why people go to work every day. However, it is undeniable that reward contributes significantly to these incentives. Torrington, Hall and Taylor (2008) states that rewards can be categorized into three terms, namely direct tangible rewards, indirect tangible rewards and intangible rewards. As far as I am concerned, both direct and indirect tangible rewards are relatively easy to identify and there are not many differences existing. However, the intangible rewards are the most likely to be ignored in practical operations, so in this essay, the differences on this field between the organizations in China and UK will be discussed.

According to the definition of intangible rewards, those aspects that can be seen as a benefit by the employees while cannot be converted into cash or be consumed are intangible rewards. For instance, the opportunities to develop in career, the recognition from colleagues and managers for an outstanding work performance and the working environment can be regarded as examples of intangible rewards. As far as I am concerned, minimum wage and job satisfaction account significantly to the whole impact of intangible rewards, so in the following parts these two aspects will be discussed.

Firstly, there is a huge difference in the legislation of the national minimum wage between China and UK. Actually, China still does not have a national minimum wage law for now and each province or city has different regulations of minimum wage subject to different circumstances of economic development and standard of living. By contrast, the UK has a national minimum wage law which prescribes the minimum wage rate for workers aged 21 and over is £6.08 from 1st October 2011. On the one hand, there are some people who argue that if China should have such a law imposed on them, thus could have a negative effect on the comparative advantages of China. Furthermore it would damage the exports of China and ultimately slow the economic growth down. On the other hand, from the point of view of employees, to have a national minimum wage enables them to meet the basic needs of living. According to Steers and Porter (1991), money is one of the factors that help employees to meet the physiological level of needs. Consequently, the national minimum wage law provides them a relatively stable level of income and thus they will have enough food, water and a shelter, in effect that is a motivator. Moreover, for a new manager who was just entering an international organization, he needs to consider more about the basic needs of employees despite of whether there is a solid minimum wage law or not, since on the one hand, no matter where the employees come from, as human beings, they all have several needs to meet. On the other hand as a manager, concerning the well-being of workers should always of great importance to his daily work.

Secondly, job satisfaction can be regarded as another intangible reward. Fisher (2003) demonstrates that there is a positive relationship between the job satisfaction and the job performance, which means that a higher job satisfaction could yield a better job performance. Moreover, it could benefit the whole organization since individual level becomes more efficient. According to Liu (2007) a recent survey on job satisfaction of employees of a well-known state owned enterprise located in north-west China recorded average grades of 2.689 out of 5, which indicates a low level of job satisfactions of employees. Furthermore, there are several factors significantly contribute to this. First of all, 66.2% of employees were unsatisfied with the geographic work location. Secondly, 65.6% of them were unsatisfied with the opportunities of on job training, they thought that it is really hard to get a chance of training. Last but not the least, 57% of them was unsatisfied with the opportunities of promotion. The results illustrate that managers in China tend to ignore the effects of intangible rewards while it is really have a significant impact on the job satisfaction as well as the work performance in the same time.
In contrast, a recent research (Bauer, 2004) illustrates that most workers in the UK claims that they are fairly satisfied with their job. As far as I am concerned, the reason why this difference exists is that the UK has a much more strict employment law which could provides a much more comfortable working conditions for employees in many aspects such as fair opportunities of training, promotion and ‘equal pay for equal value’. Moreover, under such a law enable employees to feel more certain about the future as they have a clear sense that their job performances will certainly be recognized and they will have fair career opportunities. Generally, comparing with the circumstances of the UK, China still has many places needs to be improved and this should not only the obligation of the government but also of all the organizations. As the government have the power of legislation, it should make every effort to perfect the legal system and thus it could fulfill the expectations of people, especially of those workers. As for the managers of the organizations, they need to concern more about the concerns of employees instead of only concentrating on the profit. Furthermore, managers should always evaluate if all the employees are satisfied with their job as unsatisfied workers were very likely being unperformed workers as well, and consequently they would have a negative impact on the entire performance of the organization.

To sum it up, it is undeniable that many people have ignored the effect of intangible rewards in practical operating while the impact of it is actually tends to be very significant somehow. By comparing the differences between the organizations of China and the UK gives new managers a new aspect to consider and thus could get a more thorough understanding of the workers as well. What is more, a better understanding could lead to a right decision, which is essential to a manager.

References:

Bauer, T.K., ‘High performance workplace practices and job satisfaction: Evidence from Europe’, Discussion Paper No. 1265, Institute for the Study of Labour (IZA), 2004.
Directgov, ‘The National Minimum Wage rates’ [internet] Available from: <http://www.direct.gov.uk/en/Employment/Employees/TheNationalMinimumWage/DG_10027201> [Accessed 11 December 2011]
Eurofound, ‘Measuring job satisfaction in surveys - Comparative analytical report’ [internet] Available from: <http://www.eurofound.europa.eu/ewco/reports/TN0608TR01/TN0608TR01.pdf> [Accessed 12 December 2011]
Fisher, C. D. (2003), ‘Why do lay people believe that satisfaction and performance are correlated? possible sources of a commonsense theory’. Journal of Organizational Behavior, 24: 753–777. doi: 10.1002/job.219
Hinton, G. & Ruscoe, D. (Eds.) (2011). People and Organisational Behaviour within the context of Human Resource Management. Harlow: Pearson

Liu,J.Y.,2007. ‘Survey of the satisfaction on job on the employees of a state owned enterprise in North West China’, Science, issue 22, pp.15-16.

Torrington, D. Hall, L. And Taylor S. (2008) ‘Human Resource Management’ seventh Edition Harlow, FT/Prentice Hall. (pages 593 -667)

References: Bauer, T.K., ‘High performance workplace practices and job satisfaction: Evidence from Europe’, Discussion Paper No. 1265, Institute for the Study of Labour (IZA), 2004. Directgov, ‘The National Minimum Wage rates’ [internet] Available from: &lt;http://www.direct.gov.uk/en/Employment/Employees/TheNationalMinimumWage/DG_10027201&gt; [Accessed 11 December 2011] Eurofound, ‘Measuring job satisfaction in surveys - Comparative analytical report’ [internet] Available from: &lt;http://www.eurofound.europa.eu/ewco/reports/TN0608TR01/TN0608TR01.pdf&gt; [Accessed 12 December 2011] Fisher, C. D. (2003), ‘Why do lay people believe that satisfaction and performance are correlated? possible sources of a commonsense theory’. Journal of Organizational Behavior, 24: 753–777. doi: 10.1002/job.219 Hinton, G. &amp; Ruscoe, D. (Eds.) (2011). People and Organisational Behaviour within the context of Human Resource Management. Harlow: Pearson Liu,J.Y.,2007. ‘Survey of the satisfaction on job on the employees of a state owned enterprise in North West China’, Science, issue 22, pp.15-16. Torrington, D. Hall, L. And Taylor S. (2008) ‘Human Resource Management’ seventh Edition Harlow, FT/Prentice Hall. (pages 593 -667)