The Effectiveness Of Performance Related Pay Commerce Essay

The Effectiveness Of Performance Related Pay Commerce Essay Impressive levels of staff performance are difficult to for many organizations to attain. Maintaining desirable levels of personnel performance is central to the objectives of most organizations. This is imperative as employee performance often translates to aggregate organizational performance. In a situation where employees are less motivated or less engaged to their job functions, there is a risk that such low employee morale will be reflected in an organizations overall performance. There are two main types of motivational mechanism that can be employed to induce staff to desired levels of performance namely; intrinsic motivation and extrinsic motivation. Perkins White (2008:8) defined extrinsic motivation as motivation that is derived from the use of tangible or transactional reward. Financial reward and incentive pay are examples of extrinsic motivation. Perkins White (2008:8) defined intrinsic motivation as the motivation of staff that is derived from the nature of the work itself. Armstrong (2010) added that intrinsic motivation is intangible in nature. Examples of intrinsic motivation are career development, career progression, training and development e.t.c. Armstrong (2002) argued that while intrinsic motivational mechanisms tends to have a sustained and positive impact on personnel morale, extrinsic motivational mechanisms tend to have minimal impact on personnel morale. For some organizations, they focus of their process of motivating staff is mainly extrinsic, while for some others, the focus is on use of mainly intrinsic motivational variables. In spite of this, Armstrong (2010) contended that both types of motivation can together be used to design mechanisms and processes for motivating important personnel. The use of performance-related pay (PRP) as a tool for motivating staff within organizations is what this research will be about. Before proceeding, it is essential to point out that PRP is an extrinsic motivational variable. Many firms, specifically firms that deal with financial services, use performance-driven pay to reward personnel for enviable performance. Before going into in-depth explanation of what PRP is, it is essential to gain an understanding of what employee reward is. In the words of White Drucker (2009), employee reward involves the tools used to compensate employees for their contributions to the achievement of organizationa l objectives. Employee takes into consideration how important it is to use the right reward schemes to compensate personnel, especially where there is above average performance. While employee reward mechanisms can be both tangible and intangible in nature, tangible reward schemes will act as the main emphasis of this research, most notably pay. The challenge of using pay to motivate staff is the difficulty of determining the right application of pay structures in a way that it enhances sustained and desired levels of staff performance. This difficulty has led to increased innovation in the use of pay to motivate staff. One of such innovations is the development of performance-related pay. Thorpe Homan (2003) suggested that PRP deals with the correlation of personnel performance with financial rewards. Again, IDS (1998) defined PRP as the different types of incentive mechanisms, in exclusion of direct payments based on outcomes achieved. Some of these incentive arrangements are pro fit sharing, employee share ownership arrangements, bonus arrangements e.t.c. PRP is widely used in the financial services industry in the United Kingdom. Bonus schemes are usually used to reward for employees for additional business or revenue generated. The recent liquidity crisis in the UKs financial services industry, in the wake of the subprime economic disaster, has stimulated a widespread debate on the effectiveness of (PRP) as an effective tool for influencing personnel behaviour. Most of these debates arose because of the role of bankers in fuelling the liquidity crisis which culminated into the recent global economic recession. Based on these observations, this emphasis of this study will be on assessing the usefulness of PRP as a mechanism for motivating employees, especially from the ethical perspective. 3. Preliminary Review of Literature PRP acts as an added way that can be used by firms to reward their employees in tangible terms. Again, performance-related pay also refers to individualized mechanisms or processes in which pay rises are relative to the outcomes of performance appraisal (Heery Noon, 2001). This is why CIPD (2009) referred to performance-related pay as appraisal-related pay or merit pay. A great deal of debate has arisen in recent times about the usefulness of performance-related pay as a tool for motivating staff to sustained and desired levels of performance. Most of the recent debates have been fuelled by the role of rogue bankers in the recent global economic crisis. While money or pay provides an avenue through which an employees value is assessed, there is a failure by most organizations to recognise that people tend to differ when it comes to being motivated by pay. Human beings are complex creatures and as such will respond to motivation through the use of pay in differing ways (Corby et al., 2009). Another problem derived from the application of PRP is the failure of most organizations to distinguish between awarding financial rewards based on behavioural criteria or based on the achievement of results. There is a broad difference between these two criteria. In most cases, the application of PRP by most organizations is more focused on the achievement of results and less focused on behavioural criteria. While result-oriented performance-related pay can be effective in terms of the achievement of an organizations objectives, there are pitfalls in the use of this particular approach. The role of bankers in the recent economic crisis acts as a useful example of how result-oriented performance-related pay can be damaging to overall organizational performance especially in terms of the intrinsic worth of a firm. The use of bonus schemes led to excessive risk-taking by most bankers, especially bankers in the investment trading arm of most banks. Such excessive risk taking wa s largely driven by the desire to earn bonus payments; as a result, proper risk management mechanisms were often ignored as most banks became excessively leveraged. The decision by RBS to acquire Dutch bank, ABN Amro, was done in ignorance of appropriate corporate governance mechanisms; a decision that would not have been taken in retrospect as it led to accumulation of huge losses by RBS in the wake of subprime bust in America (Owen, 2009). Most of the criticisms against PRP is derived from its failure to recognise the significance of the need to control behaviour. This is because the application of result-oriented performance-related pay process tends to encourage employees to engage in discretionary efforts and behaviours that are mainly based on their desire to earn additional pay incentives as opposed to engaging in behaviours that bring about added value for shareholders. Kessler (2005) noted that another problem with the proper implementation of performance-related pay mechanisms is the difficulty of measuring inputs as they are generally more qualitative in nature. On this specific note, performance-related pay is more likely to be based on individual targets than team or group targets. Another issue with the implementation of PRP is that since in most cases, it is reliant on individual targets, there is a potential for it to become discriminatory in nature. The banks in the United Kingdom again act as useful exa mples; bonus schemes tend to be given to bankers in the investment banking and trading arm of most banks while back office staffs seldom have access to such bonus schemes. What makes this appalling is the fact that most of the ill decisions taken by the bailed out banks was done by bankers in the trading arm of most these banks (FSA, 2009). Armstrong (2007) noted that discriminatory application of performance-related pay systems only leads to decreased intrinsic motivation and decreased co-operation between employees. This undermines every sense of an equality-based organizational culture. Again, Perkins White (2008:165) were quick to point out that discriminatory bonus schemes only leads to low aggregate employee morale. Such a scenario only serves to undermine overall intrinsic interests within the organization. These observations help to highlight the undemocratic nature performance-related pay schemes especially as it tends to leave little room for the protection of entrenched collective employee interests. In spite of the multiple criticisms against performance-related pay (PRP), it is only fair to acknowledge that there are also perceived benefits that can be derived from using PRP schemes. For one, Lawler (2005) argued that relating individual pay tom performance possesses a potent motivational effect since it creates room for differentiating between the behaviour of employees and how they are rewarded. 3.1 Need for this research Firstly, I decided to conduct this research because of one of the subjects of my international human resource management module. That topic, in particular, was about how culture determines the way people react to financial rewards and non-financial rewards. Again, this research will help to examine the rationale for use of PRP schemes as a way of influencing personnel behaviour. 4. Research Questions 1.) Can performance-related pay be used to create a dichotomy between the need to protect collective employee interests and the need to inspire above-average of performance among personnel? 2.) What are the most effective ways that organizations can employ to reduce the pitfalls of performance-related pay? 3.) Why did use of performance-related pay schemes fail to control the excessive ris taking attitudes of personnel in the investment banking arm of the Royal Bank of Scotland (RBS)? 5. Research Objectives 1.) To establish the best way of implementing performance-related pay in such a manner that entrenched collective employee interests will always remain protected. 2.) To establish the value of performance-related pay as a tool for enhancing performance of key personnel. 3.) To establish veritable options to the application of performance-related pay systems as a tool for motivating personnel to sustained and desired levels of personnel performance. 4.) To ascertain reasons for broad criticisms against use of performance-related pay to reward employees, especially personnel in financial services institutions in the United Kingdom. 6. Research Perspectives The research philosophy that I will use in this research is interpretivism. Collis Hussey (2003) posited that, interpretivism suggests a broader philosophical paradigm and avoids misunderstanding with the phenomenological research paradigm. In some aspects, there appears to be a like for like similarity between interpretivism and phenomenology. Any research that employs interpretivism is often times than not inductive. The subject of pay-driven performance is a subject that entails qualitative information as both direct and indirect observations both by the researcher and other researchers will form the basis for most of the information collected by the researcher. The study of the effects of financial rewards on personnel performance, to a lesser degree, involves quantitative information except when measuring output-driven target for target-oriented jobs. Such measures can apply to certain jobs in the financial services sector, like investment banking jobs. The potential lack of ac cess to such quantitative or target-driven information has informed the decision to use more qualitative-oriented information. Previously conducted empirical research on this researchs subject matter will be used to create the theoretical framework for this study. 7. Research Design Collis Hussey (2003) noted that the research design serves the main purpose of giving focus and direction when conducting a research. The research design forms the skeletal framework of the different methodologies applied during the conduct of a particular research. The research design that will be used in this research is the case study research design. Saunders et al., (2003) noted that the usefulness of the case study research design is that it enables the researcher to narrow the focus and scope of a research such that unnecessarily work is prevented. In this research, the case study for examining the effectiveness of performance-related pay is the Royal Bank of Scotland (RBS). This bank will form a useful case for investigating the key variables of this study especially when taking note of the fact that the actions of some of its employees were culpable in some of the excessively risky decisions that almost contributed to its demise in the wake of the subprime market disaster ( Owen, 2009). As a result, findings from the cross-examination of RBSs PRP arrangements can be used to determine the best ways of implementing PRP schemes in other similar organizations. 8. Data Collection Methods In order to achieve the necessary requirements for this particular research, data or information will be obtained from both primary and secondary sources. Under-listed is a concise description of some of the tools that will be used to gather both forms of data. 8.1 Primary Data Collis Hussey (2005) defined primary data as raw data or information. The usefulness of primary data stems from the fact that it provides the researcher with original perspectives when investigating a particular problem. Primary data will be used to a considerable degree in this research. There are different ways for gathering primary data. In the context of this particular research, the researcher will gather primary data through three anonymous open-ended interviews with personnel of the Royal Bank of Scotland (RBS). The researcher expects that the interviews will take approximately forty minutes for each of the proposed interviewees. One of the proposed interviewees is a friend of mine and has promised me access to the other two interviewees. This friend of mine is a customer service representative in one of RBSs offices in London. Feedback from these three open-ended interviews will help the researcher to meet most of the objectives of this research and also conclude this resear ch. 8.2 Secondary Data Secondary data, on the other hand, will be obtained from academic textbooks and academic journals. Collis Hussey (2005) noted that secondary data is information assembled by other researchers and are available in public domains. Some of the peer reviewed academic journals that will be used in this research are the human resource management journal, CIPD articles and the reward management journal. These journals will be accessed from academic databases like the CIPD website, Ebscohost, and Emerald. Journal entries sourced from these databases will help to create the theoretical framework of this research. The value of the secondary data to be utilized in this research is derived from the assumption that it will also be used by the researcher as a support mechanism during analysis of the primary data gathered by the researcher for this researcher. 8.3 Analysis of Data Gathered by the Researcher Most of the data that will be analysed in this research will consist of the primary data gathered by the researcher. As mentioned earlier, the primary data for this researcher consisted of feedback from the three open-ended interviewees that will be carried out. The researcher will make use of content analysis during analysis and interpretation of feedback from the three interviewees. The content analysis will involve using the secondary data gathered as a support mechanism for analyzing feedback from the three interviewees. The use of secondary data during analysis of the primary helped to reduce subjectivity, which is one of the main limitations of the qualitative research approach. 9. Limitations of this Research One of the main limitations of this particular research is the fact that the researcher will only use one research approach as opposed to use of a mixed-methods research approach; in this case, only the qualitative research approach will be used. The qualitative research approach is not without its limitations. One of the main limitations of this particular research approach is that analysis of data gathered tends to be subjective since it is largely based on the researchers perspectives and viewpoint (Collis Hussey, 2005). To reduce subjective analysis and interpretations, the secondary data gathered will be used during analysis of feedback from the interviews that will be carried out by the researcher. Another constraint of this research is the fact that the sample size of just two interviewees may be regarded as too small to generate considerable primary data. To address this particular constraint, the researcher will ensure that considerable secondary data will be gathered so as to ensure that a concise analysis is conducted. Another constraint of this research is the use of just one case study; in this case, the Royal Bank of Scotland. The use of just one case study may make it challenging to generalize findings or results from this research. This is where the secondary data gathered by the researcher will be crucial; the secondary data will offer further perspectives on the underlying subject matter of this research, especially where the primary data appears deficient. 10. Ethical Considerations The process of conducting this research will be based on the stipulated requirements of Coventry University. In this regards, the Coventry University Ethics Manual will be studied by the researcher before inception of the research. All external information that will be utilized in this study will be properly referenced using Coventry Universitys recommended referencing style; in this case, the Harvard referencing style will be used by the researcher. The use of this particular referencing style appears to be in accordance with the plagiarism regulations of Coventry University.

Creativity essay

Creativity is important to education because some people have special drawing skills and they learn about different kinds of art. These special people have a tremendous talent and it takes a lot of practice. Creative people needs to be curious about their art work, flexible, and independent. When others are drawing, they have to use their time wisely. Creativity is about making mistakes and correcting them. Creativity is as important as other subjects. To be creative, an individual needs subject knowledge and how this knowledge can be used first.People think creativity can just be used for arts, drama, and music. But little do people know, it can be used for anything. Such as; hair products, getting dressed, school subjects, etc. Using hair products or make-up, that person can think of ways to use his/her own creative imagination. Getting dressed are the impressions that you make; like â€Å"Should wear this today or tomorrow†. And school subjects for creativity could be used for math, science, history, and English. All those subjects could be used for problem solving ability to think, and to learn social rules.In the TED talk of â€Å"How Schools Kill Creativity† by Ken Robinson, never in my life knew schools could kill creativity by the way they talk in the morning. In his speech, Ken Robinson claims that some students are born with huge talents. He talks about the future for students and what is going to happen in the next couple years. Students have responsibilities, learning capabilities, academic abilities, and possibilities of making something incredible. All students have tremendous talents and should do whatever makes them feel comfortable. Creativity can be emotional, stressful, and social.In art classes, students should be encouraged to go big, explore, and wander what they are going to draw. It takes patience and time to draw something incredible. No one would want to draw really fast and the drawing to look sloppy. Drawing could be fu n and interesting. Drama takes creativity to listen for communication, positive minds, positive vibes, and speaking in-front of crowds. This is learning a new skill everyday. Music is learning how to read notes, the melody, slow and fast rhythms, and the harmony. Being creative is putting all the instruments together to make a beautiful sound.Its also about working together and having a positive attitude. People enjoy the process of being creative and being â€Å"in the zone† or flow. Creativity is a special subject, culture, skills, learning, etc. Creativity is what puts our world with color. If we did not have creativity in this world, I think there would be nothing. Such as; everything is this world would be black and white. Everyone would not have a special, happy, creative personality. Everything would just be blank. So since creativity is about making mistakes and correcting them, creativity is just as important to education and to our whole society.

Aesthetics of Knowledge Maps Essay

If â€Å"a picture is worth a thousand words†, what is the worth of each word? Does the value of the aesthetic decrease through this transition? The human brain is trained to believe that there is a word to describe aesthetic, being able to put a label or description on all of this information. Why must we even classify a photo’s meaning through the written language? Visual information cannot be fully described through language or non-visual semiotic systems, because it is irreducible. Information is an artistic and aesthetic concept; to understand our world we must include the notion of information and how we as humans can make a representation of the world in our minds. Visual artifacts contain information. We store information visually, we analyze information through a visual means, and we understand information better when it is represented visually. The word ‘tree’ represents a tree as an aesthetic, an encompassing notion versus a specific image of a s ingular tree. There is a broader spectrum for understanding when something is visual. Depending of what language you speak, the framework of our semantic foundation, the meaning of a word varies drastically. People that speak different languages all see something in a photograph or painting and could tell you what it is they see, but the differences in our semantic thinking, language of words classifying information, will make it different. When a human is in early development stages as a child, the first initial way to communicate for them is visual information. Before children learn to read and write they draw, watch television, look at picture books. Then they are given teachings of communicating visuals to word. During the Paleolithic Period, 40,000–8,000 BCE, nomadic people painted in caves as a wondrous early way of communication, sharing information with others. An incredible example is the Hall of Bulls in the Lasceux Caves located in France in 15,000 BCE. These humans could not read or write and yet the visual information they represented with these paintings is breathtaking. They didn’t need 1,000 words to describe what they saw until the information age. Stories throughout time have been told naturally with visual information. Information has a history, yet unlike regular history, it is unbound by Euclidian space. It is not a physical being that has but one description. However, now information is all put into word. Without an extensive vocabulary there is little chance you could ever be able to express notions as clearly as if you were to simply communicate with visuals. Reliance on visual’s word to form the structure of all of our communication means thinking; visualizing information and mapping thought processes. Knowledge deals with matter of facts; laws of nature and society deal with energy processes and determine knowledge and facts. Information is prior to laws and knowledge; information is structured, relational, stored and transmitted, aesthetic. Information is configurations, organization and formalization. Mapping concepts structures our knowledge and makes us able to generate hypotheses. The organization of thoughts and concepts in this way brings the opportunity of serendipitously learning.

Thomas Hobbes And Jean Jacques Rousseau - 1728 Words

Although Thomas Hobbes and Jean Jacques Rousseau are both considered Enlightenment thinkers, their ideas vary greatly in the political continuum. Both of their theories have certain components which may appear to be symmetric, but upon closer examination, their differences stem from the very way in which they view human nature. From there, each man builds up to the creation of a commonwealth in a way that reflects which type of government they support. The political theories of Hobbes and Rousseau share many common aspects including the existence of a state of nature, an exit of the state of nature by the people, and the formation of a civil society. However, Thomas Hobbes’ theory, which leads to the formation of an absolute monarchy, is superior to Jean Jacques Rousseau’s theory that everyone should attempt to create a society that closely resembles the original state of nature where everyone collectively is the sovereign because Hobbes’ negative views of human nature are more realistic than Rousseau’s, and fear is a more powerful motivator than an agreed upon will. The state of nature was one point on which Hobbes and Rousseau’s opinions varied greatly. The state of nature is defined by Hobbes as an environment where every man is for himself because there is no common body to unite them. Hobbes saw the state of nature as a dangerous and unpleasant place where life is â€Å"solitary, poor, nasty, brutish, short† (Hobbes, Pg. 76). 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