Legal Implication of HRM: Case Study

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Wajiha Swathi
TUI University
MGT 516
Case Based Study
Module 5

Date: 01/21/2011

Motivating the individuals that work for you is one of the most important functions that an employer can have. Simply stated getting employees to do the things they were hired to do is probably the biggest challenge a manager will face. You will always have individuals who will work their hardest for the rewards the company provides them. On the other end there are some employees that you can never keep happy no matter what rewards you give them (People Skills, 2010). HRM strives to achieve organizational goals and the goals of employees through effective personnel programs policies and procedures. HR is considered to be as solely responsible for productivity and may call upon to answer for it (Anonymous, 2010). Successful performances of the personnel function can greatly enhance the bottom line of any organization. The rapidly advancing technologies and outside influences are changing the nature of our jobs. It is thus more critical and more difficult to maintain a work environment that motivates and satisfies Human Resources. In this paper, I will discuss the concept of total rewards, the impact of rewards systems on the organizational performance of companies in contrast with more traditional approaches to compensation and benefits. Then I will look at the advantages and disadvantages of total rewards for both employer and employees. Lastly, I will look at the legal aspect of total rewards program. Total Rewards Concept

The total rewards system concept is simply about the financial and non-financial benefits given to employees in trade for their services to the company. In recent years, the concept of total rewards has come to the forefront in the HR community (Johnston, 2007). With the current changes in past 20 years, companies are working hard to run successful business. They have realized that, the employees will give the company their time, their abilities and efforts to support the company in return for the benefits the company provides (Chen, Hsieh, 2006). Total Reward systems have six dimensions: basic, method, function, frequency, object and design (Chen, Hsieh, 2006). Total rewards involve the combination of five essential elements needed to motivate, attract and retain employees needed to accomplish the organizations goals, they are: •Employee Compensation

•Employee Benefits
•Employee Work-life Balance
•Employee Performance and Recognition
•Employee Development and Career Opportunities
Total rewards are the approach of using the five items to develop an employee benefit package designed to achieve optimal employee motivation (Future Strategy, 2010). The key to the success of this is that the employee sees the financial and non- financial benefits as important. Another key to the total rewards system is that the company invests the time and effort to make sure that the system aligns with the company's strategy. However, for organizations to perform successfully, the business strategy, organizational structure and reward system must align with one another (Chen, Hsieh, 2006). The traditional compensation system is mainly based on money received for the performance of work. Compensation is recompense, reward, wage or salary given by an organization to persons or a group of persons in return to a work done, services rendered, or a contribution made towards the accomplishment of organizational goals. Wage, dearness allowance, bonus and other allowance are examples of monetary compensation, while good accommodation, children education, transport facilities, subsidized ration of essential commodities, etc. come under non-monetary compensation. The traditional reward system is mainly based on employee’s length of service with a particular company or in other words his/her seniority. He would be eligible for certain compensation plan after certain time period while performing narrowly defined...
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