Managing Workforce
Reward system refers to a method through which an organisation strategically attracts, motivates and retain employees. Reward management involves formulating and implementing strategies and policies that are aimed at rewarding people in a fair, equitable and consistent manner according to the value they give to the organisation. It is about giving back to the employees according to the contribution they offer in employment relationship. A system of reward management may involve both monetary and no-monetary rewards. Since the primary reason for people to work is earning money, monetary basis of rewarding employees is an important feature in any reward system. Employers have a choice of raising the pay base of employees after performance measurement, usually on annually through a merit pay. The characteristics of a good system include; simplicity in terms being understandable throughout an organisation, equitability and fairness such that it can be justified and applied consistently and perceived or understood as such, participatory in that it involves negotiation and agreement between the management and the staff (Claudia & KleinerI 2015).
Motivation relates to the factors, other than reward that drives people to find fulfilment or achieve certain needs. This is best elaborated using the Maslow hierarchy of needs that are represented in a hierarchical order in a using a pyramid and when we happen to satisfy one level of need, we move to the next level. These needs push individuals towards self-actualization and finally to personal superiority and this finally result to a change in ones behaviour. The first level includes the psychological needs which mainly refers to the need for survival such as the need for food, clothing, warmth and shelter. The second level involves the security needs that is shown in the need for safety in worker’s health and family. The third level involves the social needs which is expressed when employees shift their focus to job relations in order to build friendship, intimacy and love. Up next is the self-esteem needs shown by need for acceptance and being valued by others. Self-actualization needs is the highest level, which is the desire to become the best that one can be. Motivation can also be defined by Herzberg’s theory that which explain that employees are affected by motivators and hygiene factors. Motivators bring about job satisfaction and they include autonomy, recognition, and achievement and such inherent aspects after they are fulfilled. The hygiene factors involve conducive work conditions, salary, status, administration and organisational policies. Motivation can also be explained using the fifty-fifty theory by John Adair that influence performance of an organisation. The theory stipulates that fifty percent of motivation originates from within an individual while the other half comes the surroundings, mostly from others. Vrooms expectancy theory defines motivation as a products of anticipated value of someone in action. It is developed on the basis of value, force and expectancy. Motivation is highly influenced by a management process that is efficient (Claudia &Kleiner, 2015).
The engagement and commitment of an employee gives organisation competitive advantages that include employees’ lower turnover and a high productivity. It does not come as surprise that small and large organisation of various types invest heavily on practices and policies that enhance their employees’ engagement and commitment. Engagement and commitment include satisfaction of employees in their work and taking pride in the employer such that they like and believe in their work and have a perception that their employer highly value their contribution. The more an employee is engaged in their work the higher the possibility that they will provide high performance in an organisation (Claudia &Kleiner, 2015)..
The British Airways offers rewards to employees in addition to their normal salaries which depends on performance, skill acquisition and competence. The company also operate two benefit pension schemes in UK. Their reward plan allow non-management staff to have a share in success of business on the basis of corporate targets and measures. It also use local incentive strategies for performance improvement, bonuses and use a new system of broad band to link rewards to performance (British Airways, 2008).
For British Airways, maintaining a good reward system would be the best approach to deal with the case of the striking employees’. The removal of travel benefits for those employees who participated in the strike meant doing away with a very important component of a comprehensive reward system. A comprehensive reward system include compensation and benefits which may include bonuses, wages, vacations and health insurance. However, it is necessary for an organization to carry out an evaluation for the reward system management that it applies. Management usually subject the capital and operating costs to an analysis to determine whether the targeted rates of return are being achieved. The managers will study and investigate the variances and come up with the appropriate course of action to ensure that desired goals are achieved. It is thus logical to expect that reward system that include benefits and compensation would be put under the same scrutiny for the purpose cost-benefit analysis. The travel benefits offered by the airline did not come cheap since it includes a considerable outflow of cash. How organisations treat any benefits or compensation depends on the mangers views on how such costs affect employees work motivation. If the managers perceive that benefits do not have any effect on motivating performance, it is logical for the rewards to be done away with involved respective of the big amount involved. However, if they believe that such rewards will have an effect on work motivation, they should ensure existence of an active management system of the rewards to enhance and influence the work behaviour (Rabindra &Mendonca, 2011).
The management may be of the view that benefits especially monetary ones may not be a prime factor in performance motivation. Intrinsic rewards such as responsibility, feelings of accomplishment are the only real motivators of work performance. Extrinsic rewards like benefits thus plays second fiddle to the intrinsic rewards. They can be necessary in preventing dissatisfaction with an employee’s job but they may not have positive influence at all in performance motivation. What may be necessary is the employee commitment and engagement which will make the employee feel that they are part of the decision making (Akah, 2010). Through provision of negotiation platform with Unite the Union, the managers of British Airways resulted to the intrinsic motivation since such an avenue would make the disgruntled employee to feel involved in process that would finally derive satisfaction. Thus by differentiating between extrinsic and intrinsic rewards, the managers are able to come up with a foundation for a different method of reward systems management. An organisation will evaluate a reward system to in order to offer intrinsic rewards by way of redesigning the job to add more responsibility, autonomy and control. Such a system will not only be specific but its implementation may be possible with a bit low expense and effort. It may also be a method that will prevent alienation of an employee when may arise if they are denied participation in and control of those matters that relate to their job. Thus management may result to changes in programmes such job enrichment and rotation, flexibility in scheduling, work groups that are semi-autonomous or quality circles. This kind of scenario is seen when the management of British airways decide to change the work practices relating to the cabin crew. The importance of engagement in deciding on the motivational approach is seen in the desire by the airlines management to avoid the cases of industrial action. By avoiding such strikes the airline and the employees would reach a neutral ground where an agreement would be reached which would serve to prevent negative repercussion for both the firm and the employees (Lalita, 2013).
Thus a reward system a big important factor in any organisation since it is a process that determines human behaviour in an organisation. The prospects of removing travel benefits resulted to industrial action which is central to human behaviour of the company’s workers and whose effects on the performance of the firm is quite outright. It assist in verification of performance in relation the set goals and influences the possibility of employees joining or being retained in the organisation. It assist the extent to which ones effort directed towards developing the future capabilities of the organisation. If it is designed and administered rightly, it can result to positive organisational behaviour. However, if it is wrongly designed and administered the reward system can lead to a constant deterioration of a firm’s performance and its quick demise. Motivation of employees will ensure that their effort are directed towards maximum performance. The possibility of jobless as in case with British Airways employees is big motivation killer. It is a source of insecurity, and security which is a key component in Maslow’s hierarchy of need, which spurns across ones desire for needs satisfaction and self-actualisation. It is no surprise that the employees would engage in an industrial action since the impending job loss act as demotivating aspect. What is important to any organisation is to have a highly motivated workforce that will translate to best performance.
The decision by British Airways to result to cost-cutting measures and the issues that related to terms and conditions of Unite labour union members resulted to a big dispute between the company and the labour Union. The employees who were members of the union, out of concern for job loss, a freeze in payment and changes to the cabin crew’s change in work practices held a strike ballot supported by their Union. However, a UK court blocked the industrial action but another ballot was held on February 2010, followed by other industrial actions by the labour union. The company responded to the strikes by removing the travel benefits for the workers who took part in the action. After further negotiations failed and a following legal dispute on whether there was any right to call for the strike, Unite announced another five day strikes starting on June 2010. The negotiation facilitated by UK Advisory ACAS failed after a disruption of the negotiations by Socialist Workers Party and the Unite secretary general was found to be using an electronic device to give the union members an update of the negotiations. After the strike Unite alleged that the industrial action caused a big disruption on the number of Flight that the airline could operate, and it had cost the company 186.5 million by June 2010. The claim was rejected by British Airways which said that its services were efficiently operated during the time and that more eligible crew had emerged to take over. The company maintained that the Union had failed to ground the company and the decisions it had made related to its future viability. However, the dispute had a significant strain on resources of both parties and it saw the company announce an annual loss of 642 million GBP.
The impending job loss and freeze on their payments made the employees to hold ballot on industrial action. The freeze on their payments was more so motivation killer considering that primary reason why people work is to receive a monetary payment. The monetary normally have a significant influence on workers motivation to continue working. According to expectancy theory, where the rewards are viewed by employees in terms of valence, contingency and salience, they will have a considerable influence on the employees’ motivation. The employees thus had the right to turn to industrial action to prevent their payments from being frozen. Furthermore, job cuts caused a lot of insecurities to the employees. These two factors are clearly represented in Maslow’s hierarchy of needs model that explains the link between motivation and the needs of an individual. The removal the travel benefits also present another situation where the employees were justified for participating in subsequent industrial action. A reward system goes a long way in providing motivation for employees. The travel benefits represented an intrinsic reward that is very internal to each individual. They derived their motivation from the prospects of an advancement in career and thus the impending job cuts worked as a catalyst to awaken the insecurities of the employees. This goes a long way in proving that the employees were disgruntled due to possible job loss that would take away their self –actualisation that is the greatest source of individual satisfaction. The employees of any organisation will perform their duties if have a believe that they are seen by management to be capable, they will be given a reward of value that is subject to performance and the reward will equate their performance relatively (Lalita,2013).
The British Airline should develop comprehensive management of reward system. When designing such a reward system especially where monetary reward is included, the reward should be such that it is public and the recipients of the rewards should be involved in designing it. In order to have criteria through which rewards are given, the management should develop an evaluation strategy that will recognise whether the merits have been met. There should also be concrete reasons why the reward to an employee should be withheld and such reasons should be communicated to everyone in the organisation in order to avoid any future dispute. This is best done through a process of commitment and engagement. This will ensure that the employees will develop positive attitude towards the systems in the organisation and thus they will be able to express their feelings and commitments towards the company. The company should result to other means of cost cutting and to avoid the cases of employees resulting industrial action. Although laying off workers through restructuring assist the company in competing with rivals, the changes usually break the employment contract of other employees psychologically. This is because the employees realize that they do not have the surety of working in an organisation until their retirement age. The reduced employees’ expectations of reciprocity in an organisation make them to feel less committed to the employer (Robert, 2006).
Thus, British Airlines management should make an effort of involving the employees in decisions that will affect them. This is true for the case of laying off workers or withholding their due payments. The company should follow the example of Southwest Airline that has a good reputation in the airline industry for it excellent performance year after year. The Southwest Airline has a finely recorded history of its association with labour unions. It has all along been able to use its reward systems to build a solid relationship with unions and this has seen its retention of contented staff a fact that is evidenced by its low turnover rates. It has managed to negotiate contracts that are long term with the labour unions which include generous benefits clauses for employees and this is an overall strategy of ensuring long term commitment of its employees.
References.
British Airways, (2008).The way we run our business. British Airways2008/09 Annual Report and Accounts / 35.
Claudia Holston, Brian KleinerI (2015). Excellence in Reward Systems. California State University, Fullerton. Vol 1. (3)
Rabindra, Kanungo &Manuel, Mendonca (2011). Evaluating Employee Compensation. Human Resource.
Lalita, Shukla (2013).An Examination of the Impact of Leadership Style .On Employee Satisfaction In British Airways. International journal of innovative research and development. Vol. 2(5)
Robert J.(2006).Employee Engagement and Commitment. A guide to understanding, measuring and increasing engagement in your organization.
Akah, William (2010).Employee motivation and performance. Ultimate Companion Limited. 8-56
Ali, Albdoura & Ikhlas, Altarawneh (2014). Employee Engagement and Organizational Commitment: Evidence from Jordan. INTERNATIONAL JOURNAL OF BUSINESS, 19(2), 2014
