Human Resource Management: PRP Theories

Powerful Essays
Topics: Motivation
HUMAN RESOUCE MANAGEMENT

CONTENTS 1. Introduction 1 2. Literature review 2 2.1 Emergence of PRP 2 2.2 Concept of PRP 3 2.3 Relevant theories of PRP 4 2.3.1 Maslow’s hierarchy of needs & Herzberg’s motivational theory 4 2.3.2 Equity theory in PRP 5 3. Case study 6 3.1 Case one: “Why Do Companies Use Performance-Related Pay for Their Executive Directors?” (Bender, 2004) 6 3.2 Case two: “Evaluating performance-related pay for managers in the National Health Service” (Dowling & Richardson, 1997) 9 4. Analysis and Evaluation of PRP Theory in Business Organisations 11 4.1 Comparison 11 4.2 Contrast 12 4.3 Performance related pay theory in business organizations 13 4.3.1 Motivates employees and improve their performance 14 4.3.2 Facilitates change to organizational cultural 14 4.3.3 Encourages the internalization of performance norms 15 4.4 Problems of PRP in practice 15 4.4.1 Setting performance objectives 16 4.4.2 Assessment and ratings 17 4.4.3 Reward 17 5. Conclusion 18 Reference 19 Appendices 21

1. Introduction

Nowadays, Human Resource Management has become a strategic and coherent approach more than just managing the competencies and skills of employees in an organization. Armstrong (2002) noticed that HRM is much more focus on people not jobs, and so does business organization (Lewis, 1998). Yet, people have been placed as an important role of business. To this extent, this essay will take a critical look at PRP which is based on people, and also considered as an essential and sensitive part of the HRM in organizations today.

The paper starts with a brief review of recent literature which reports studies of PRP systems. It continues with describing two case studies related to the practical discrepancy to PRP theories. It goes on to our own independent critical analysis by comparing the PRP theories and practice in real world. Finally, there are conclusions being drawn

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