Literature Review
Abstract
Nowadays attracting and retaining professional and skilled staff has become a challenge for many companies. Many organizations experience significant turnover that adds complications to their business activity. Providing employees with the rewards of different kinds helps companies to deal with this problem, assists with retaining talent, and reduces expenses for hiring. The rewards offered by the organizations can be of different kinds and serve various goals. Rewards can be financial and non-financial, extrinsic and intrinsic. Management of these rewards differs from company to company and is usually designed to serve the certain goals of the organizations. One more aspect that contributes to the successful business activity is effective training in the workplace. Many companies now wish to establish it; however, it is not always easy to find a good line manager for this goal. Such person needs to possess many professional and personal qualities to be successful, as well as to improve and develop his or her skills regularly.
Keywords: rewards for employees, employee benefits, training in the workplace, characteristics of the training manager
Many companies recognize that talent is the major driver of their success. Nowadays it is getting more and more difficult to find skilled and professional employees that perfectly suit to the available vacancies. Therefore many organizations try to find ways to improve this situation that will provide them with the competitive advantage in the labor market. One of such ways is offering rewards to the employees. There are many types of rewards that serve different purposes. This Literature Review is devoted to different approaches of managing rewards in organizations.
According to Allen (n.d.), nowadays the labor market that is constantly changing, together with new generations of employees’ expectations differences, makes the process of employees retaining increasingly complicated. Implementing and creating a strategy of employee retention is important to the continuous success of each company.
Efficient retention managing demands a profound analysis of the extent and type of turnover inside the company. Firms should then understand the major drivers of turnover and the methods in which their workers are deciding to leave or stay. After this information is available, managers should identify the most significant drivers of retention and elaborate both targeted and broad-based strategies they can use to improve the situation (Allen, n.d., p. 6).
Difficulties with Attracting and Retaining Employees
According to the 2012-2013 Rewards and Talent Management Survey conducted by Balancing Employer and Employee Priorities (2013), in which 1,605 companies participated globally, proves that organizations are having complications retaining and attracting the critical-skill and highpotential employees required to improve their competitiveness and performance. Around three in four companies admit complications with attracting employees possessing critical-skills, and over 50% report problems with staff retaining.
The research of the authors also proved that not all organizations are attracting and retaining professional workers by offering the most important rewards for them. Increasing competition globally makes the right talent demand as high as ever, and pushes the stakes for engaging, keeping, and attracting critical-skill employees even higher.
Also, the survey shows that workers are facing high stress levels at work. Over 50% of all companies stated that during the past three years workers have been working longer hours than usually (Balancing Employer and Employee Priorities, 2013, p. 2).
Employee Satisfaction Drivers
According to Hinkin and Tracey (2010), the practices of human resources that reflect a caring culture and are among the major firm performance and employee satisfaction drivers are as follows:
Scheduling flexibility. The primary three approaches to flexibility of the workplace are a compressed work week, flextime, and job sharing.
Job sharing involves two or more workers who share the same position (Hinkin and Tracey, 2010, p. 163).
Compressed workweek allows workers to compress the working week by means of working fewer days per week, but long shifts, as a rule, 4 days of 10-hour or 3 of 12-hour.
Flextime includes scheduling arrangements of almost unlimited quantity, elaborated to suit a schedules of the individuals while they still able to perform their duties (Hinkin and Tracey, 2010, p. 164).
Innovative practices of staffing. Maintaining and creating a large pool of high-quality candidates is a significant aspect that allows an organization to achieve both its long- and short-term needs in human resource (Hinkin and Tracey, 2010, p. 164).
Creative ways used by the numerous companies to attract outstanding talent include: publicizing awards (many organizations publicize received by them awards, mainly on the home web page of the company); dynamic media use (numerous organizations have created on their company websites web-pages that are devoted to the potential applicants’ recruiting) (Hinkin and Tracey, 2010, p. 164); referral awards (it means that in case workers are offered a financial reward for attracting individuals to the company, they will mostly engage candidates that would be in terms of work ability and ethic similar to themselves) (Hinkin and Tracey, 2010, p. 165); rigorous procedures of selection (in many organizations, workers are interviewed by employees or managers that then decide upon their hiring. However, many surveyed organizations set high selection standards and use more than the interview with the manager by comprehensive procedures using for hiring decisions) (Hinkin and Tracey, 2010, p. 165); development and training that includes:
Organizational entry emphasis. The process in which a new worker learns the culture of organization is called socialization (Hinkin and Tracey, 2010, p. 165).
Possibilities for development. Many surveyed organizations offer various trainings that cover different development opportunities types: from executive and leadership coaching to programs of technical skill (Hinkin and Tracey, 2010, p. 166).
Other creative ways include management of performance that foresees comprehensive, open-book, and continuous assessment (Hinkin and Tracey, 2010, p. 166) and benefits and compensation.
Gain sharing and profit sharing. Most of the surveyed companies had established incentive and reward programs that help to maintain transparent, logical programs of reward that are significant to recipients and comply with the goals of the organization.
Competitive, comprehensive benefits. The list of benefits offered by the surveyed organizations to its employees includes retirement programs of savings, plans of college savings, health insurance, vision and dental insurance, disability insurance, home and auto insurance, life insurance, programs of healthy partners, accounts of flexible spending, subsidized elder and child care, programs of tuition reimbursement, paid time off, financial and legal services, and credit unions that are sponsored by the company (Hinkin and Tracey, 2010, p. 167).
Emphasis on community and family is one more key feature of the surveyed organizations’ incentive and reward programs (Hinkin and Tracey, 2010, p. 168).
Payment and Productivity
According to Heneman & Werner (2005), there have also been significant changes in the way how workers are paid. Companies have elaborated contingent-based practices of payment that prize employees for their outstanding productivity. Practices of pay-for-performance reflect neoclassical economics arguments that incentives are required to induce efforts of the worker and that organizations should pay employees at their marginal product. Systems of performance-contingent pay gained popularity initially following World War II, at the time when companies started to implement systems of formal evaluation; but they became popular only after the recession of 1982, once organizations faced significant pressure to increase workforce efficiency (Heneman & Werner, 2005, p. 10)
However, many companies no longer provide any benefits to their workers. Availability of benefits has declined, for example, for health insurance (in 2009 54% of employees older than 65 years old got health insurance policy from their employer, in comparison with 70% in 1980) and for pensions there was also a decline (in 2009 43% covered in comparison with 51% in 1980). Thus, more workers are buying insurance policies in the open market for themselves, enhancing their exposure to the forces of the market (Bidwell et al., 2013, p. 10).
Rewards Types
The systems of rewards influence the employees’ behavior by means of organization’s internal impact and organization’s external impact. It foresees that reward contributes to external and internal organizational purposes (REWARD MANAGEMENT, 2011).
Internal Goals. The system of reward is devoted to job performance enhancing, to valuable employees’ retaining and corporate unit developing. Internal goals are associated with the intrinsic rewards. They relate to job and are directly tied up with performance and behavior (REWARD MANAGEMENT, 2011).
External Goals. External goals are mainly served with extrinsic reward. In this case they are not related to the work itself, however, are influenced by informal groups, co-workers, and other companies. The rewards of extrinsic character include bonus, salary, profit sharing, incentive plans, and fringe benefits (REWARD MANAGEMENT, 2011).
It is also possible to classify rewards into non-financial and financial.
Financial rewards may be indirectly or directly financial. The workers can receive financial reward directly, e.g. wages, profit sharing, and bonuses. It is also possible to receive benefits that are supportive indirectly, e.g. paid vacations, pension plans, purchase discounts and paid sick leaves. Workers are motivated by financial rewards more significantly as they are a strong motivator for individuals (REWARD MANAGEMENT, 2011).
Rewards that are non-financial, e.g. having lunch with the company boss or preferred hours of lunch, office furnishing receiving, and reaching a desired assignments of work or a duties where the employee is allowed to work without direct supervision. Such kind of rewards may assist with creating satisfaction and confidence feelings in the workers (REWARD MANAGEMENT, 2011).
Except for the blue collar workers, salaries in all of the surveyed companies serve two major goals: (1) motivation and attraction of outstanding talent inside the company; (2) pay mechanisms use to promote desirable behaviors of the employee (Stiles et al., 2006, p. 23).
Models of Total Rewards
Around 50% of the companies that took part in the survey use a model of total rewards that is observed in the internal communications as a fundamental element of the general proposition of employment. Typically the model of total rewards foresees not just financial rewards e.g. base salary, benefits and incentives, but also employment proposition elements like the advancement of the career, opportunities of development and learning, work stimulating and the environment of working. Rewards of financial character are replicable easily by competing organizations; the additional non-financial possibilities inclusion renders rewards comparatively emulation immune. Also, the conscious mix of the development, environmental, and financial parts of the package of employment foresees that this approach is necessary for developing and attracting outstanding talent. Thus, only financial rewards are not sufficient (Stiles et al., 2006, p. 25).
However, such additional opportunities demand that the company offers interventions that are determined centrally e.g. opportunities development, where such actions were locally determined during the previous years. Also it is necessary that such elements of the package of employment have a high value to existing and potential employees. Even though it has been mentioned that all surveyed organizations use multiple interventions of pay, the level to which such different personal actions are integrated into single complementary measures bundle is not so typical (Stiles et al., 2006, p. 25).
Flexible Benefits
Major element of numerous models of total rewards, the flexible benefits use, is getting increasingly popular and reflects the steps to higher benefit provision transparency, cost effective benefit provision and economies of scale, and, that is most important, the personal choice injection into employee benefit and pay system. Flexible programmes of benefits usually comprise benefits options series offered in a format of “cafeteria”. That means that the corresponding employees (usually all employees of the company) are offered a benefits array from that to select some they would like to get (Stiles et al., 2006, p. 25).
Extrinsic and Intrinsic Rewards
According to Perkins and White (2011), rewards for the employee may be divided into extrinsic, transactional or tangible reward for work undertaking in employment and intrinsic, following from employment and work.
Extrinsic reward can take place in the form of benefits, incentive pay, and salary and serves the goal of recognizing directly the organizational roles’ comparative value and the contribution employees can make into doing them. Extrinsic perks and employee benefits performed in a non-cash form (for example, health care, paid holiday, and company cars), or remuneration that is deferred (for example, share-based equity rewards or predefined benefits of occupational pension that can be realized financially in the future), can reflect efforts of management to provide competitive rewards, aimed to retain and recruit right calibre employees, and to ensure accomplishment of work for the company. Such benefits can reflect also an interest of the employer in wellbeing of employee. The extrinsic reward’s combination and nature is dynamic, e.g. current contributions to a “portable retirement income fund of the employee” can be offered in a company pension place, proving the employment relationship that is increasingly flexible (Perkins and White, 2011, p. 4).
Intrinsic benefits may be subdivided further. Environmental rewards, on the one hand, can take place in the physical environment in that work is done, together with other factors, like the values presented by work supervisors and organizational leaders in the workplace, and their leadership quality perceptions. Rewards that are development-oriented, on the other hand, that are usually directed more individually can be suggested to recognize aspirations of the employee to get development and learning possibilities, and to receive work acknowledgement and create accomplishment feelings if possible tangibly consolidated through advancement in career. Researchers suppose that bringing the employee reward features beyond those mentioned in the general agreement may assist with securing discretionary effort if employees (Perkins and White, 2011, p. 4).
According to Reward schemes for employees and management (2013), system of reward refers to all the psychological, non-monetary, and monetary payments that a company offers for its workers in exchange for the duties they perform.
Reward Scheme’s Objectives
The most important reward scheme’s objectives are as follows: to meet the organization’s goals by combining the employees goals with the ones of the organization; to help company to retain and recruit necessary employees’ quantity with the appropriate skills and education; to motivate workers; to align the employees and managers’ risk preferences with those of the company; to follow with rules and legal regulations; to follow ethical principles; to be easy to administer and affordable (Reward schemes for employees and management, 2013, p. 1).
Conclusions
Taking into account the above information it is possible to conclude that almost all organizations nowadays offer systems of rewards for their employees. Many surveys proved that their availability makes the employer more attractive and allows engaging professional and skilled employees.
Skills that a Line Manager Needs to Conduct an Effective Training in the Workplace
Nowadays many companies offer training and development programs in the workplace in order to improve their teams and thus enhance the overall performance of the company. The success of such programs significantly depends on the efficiency and skills of the managers. This Literature Review is devoted to the identification of key skills that the manager should have to conduct an effective training in the workplace.
Knowledge and Skills Necessary for the Line Manager
According Nguyen Khang (2012), training manager should have a certain set of knowledge including: organizing skills, planning skills, communication skills, directing skills, training and coaching skills, evaluating skills, motivation skills, technical knowledge and skills (Nguyen Khang, 2012, p. 90).
The outcomes of the author’s research show that the managers of the first-line in the surveyed department significantly lack some essential skills of management, such as organizing, planning, evaluating, and directing skills. Other skills, e.g. motivation and communication skills, are on the better level. Many of them have satisfied the expectations of the organization in technical skills and knowledge as the rate of satisfaction for this skills set is higher. Coaching and training skills are worth and require more learning. The organization is now providing programs of training for numerous managers in recruiting, planning, and coaching/training skills; however, improvements have not been noticed in the survey results. It is possible that only few managers participated in such programs of training or they have not applied the learned knowledge successfully to the situations of real work that foresees that the learning transfer can be not so effective or slow (Nguyen Khang, 2012, p. 90).
According to McPheat (n.d.), there are 35 skills that the Training Manager should have. The author recommends for every manager to assess his or her skills at an out of 10 honest score and identify which of them would require strengthening, while the mark 10 foresees that the person does not have to improve anything). After this, it is necessary to create a plan that will enhance knowledge or skills in the corresponding areas. Also it is recommended to revisit often this list to check whether the manager is up to date in his/her skills developing (McPheat, n.d., p. 7).
Key areas of skills include: learning, training, and the business knowledge; training department function, available training options, and differing training styles and learning knowledge; possessing a systematic training approach, tailored training and a design understanding, challenges trainers face appreciation; HR and the HR/T&D world major developments knowledge; key techniques understanding – evaluation, TNA, learning transfer (transferring learning in the workplace into practice); ability to develop strategy and policy; knowledge of sources of materials, advice, contacts and suppliers; development and training ambassador; capable to promote innovative development and learning approaches as required; outstanding skills in consultancy; capable to organize and change company’s development using training; skills in marketing; a solid understanding of publicity and internal marketing, a skilled networker; accountable, ethical, reliable, and responsible, able to establish a purpose sense in the other people; capable to create a culture of customer responsiveness, excellent quality, and high standards; skilled decision maker, possessing good judgment; possibility to see the decisions’ impact; a solver of problem, working with people, practical, and “political” issues; able to deliver creative solutions and to develop new concepts, innovative (McPheat, n.d., p. 8); aware of technology and its usage in T&D e.g. systems of training administration and e-learning, being literate in PC; possessing financial skills, possibility to tackle issues of ROI; skills of contract management and procurement; capable to receive the best options from the suppliers of training; capable to develop and manage trainers and to control administrative processes and administrators; approachable; a person that can be asked about something by the other individuals; capable to present information with authority and credibility, skilled communicator; commanding respect, assertive; a “manager of knowledge”; well-organized; having planning skills; able to create a win/win conditions, good negotiator; having commitment and drive, proactive; efficient at managing stakeholder and client relationships; capable to push and challenge boundaries; capable to build rapport and listen; capable to provide consistent and good advice; capable to think at an individual level and strategically; able to influence sideways, upwards, outwards, and downwards (McPheat, n.d., p. 10).
Aims of Training
According to Michael (2008), the mentoring and coaching aims are similar to those of professional management. They both make attempts to increase the potential of their employees. Good management and good coaching/mentoring have some characteristics in common: willingness to generate new ideas, ability to listen, lateral thinking way, a challenging, enthusiastic personality, ensuring there is time (Michael, 2008, p. 7).
A perspective coach or mentor will need some personal features: possibility to notice body language and mood changes, skills to keep confidentiality, observant, impartial and objective in dealing with employees, confidence-inspiring and warm individual, having desire to commit energy and time to learn coaching or mentoring skills (Michael, 2008, p. 14).
Coaching and mentoring barriers stem from: organizational culture issues where the available culture does not support coaching and mentoring, or does not understand it fully; issues in personality between individuals involved in coaching and mentoring initiatives (Michael, 2008, p. 15).
Barriers can be as follows: poor higher level managerial support; bad matching of coaches or mentors to their protégés; probably due to a favoritism perception; the unrealistic expectations creation as to what coaching and mentoring can provide; non-satisfaction of those that have not been chosen to take part in programmes of coaching and mentoring, the role boundaries blurring e.g. between the mentor and manager’s role (Michael, 2008, p. 15).
Training of the Diverse Workforce
In view of globalization, demographic changes, and technological innovation, multinational companies are looking for diverse workforce management leaderships. According Chuang (2013), in such conditions of global environment leadership foresees global mindset, cultural awareness, effective relationships between manager and employee, and good interpersonal skills. These leaders have to develop skills of leadership required on an international level. Several leadership skills that are essential for effectiveness in the development of diverse workplace were determined in this research for world leaders that try to (1) improve employees’ human potential, (2) follow social responsibility, (3) increase the organizational performance, and (4) learn skills of international leadership and human cross-cultural relations. Global leaders should update their skills on leadership constantly, and improve abilities for leadership effective performance in development of the cross-cultural management and diverse workplace, as well as for the global market competitiveness (Chuang, 2013, p. 17).
Conclusions
As it can be seen from the above research, in order to conduct successful trainings in the workplace line managers should have numerous abilities and skills. Moreover, they should constantly work on the improvement of their skills in order to meet the changing demands of the business environment.
BIBLIOGRAPHY
Ajmal, A., Bashir, M., Abrar, M., Muhammad Mahroof, K. and Saqib, S. (2015). The Effects of Intrinsic and Extrinsic Rewards on Employee Attitudes; Mediating Role of Perceived Organizational Support. Journal of Service Science and Management, [online] 8. Available at: http://file.scirp.org/pdf/JSSM_2015072117105646.pdf [Accessed 7 Jul. 2016].
Allen, D. (n.d.). Retaining Talent – A guide to analyzing and managing employee turnover. SHRM Foundation’s Effective Practice Guidelines Series, [online] p.6. Available at: https://ch319.pbsmartmobile.com/public/sites/1399/2699/assets/bbf81e8b8f354289dc9cc241237dfd94.pdf [Accessed 3 Jul. 2016].
Balancing Employer and Employee Priorities. (2013). WorldatWork, [online] p.2. Available at: https://www.worldatwork.org/waw/adimLink?id=71255 [Accessed 3 Jul. 2016].
Bidwell, M., Briscoe, F., Fernandez-Mateo, I. and Sterling, A. (2013). THE EMPLOYMENT RELATIONSHIP AND INEQUALITY: HOW AND WHY CHANGES IN EMPLOYMENT PRACTICES ARE RESHAPING REWARDS IN ORGANIZATIONS. Annals of the Academy of Management, [online] p.10. Available at: https://www.researchgate.net/profile/Forrest_Briscoe/publication/262853065_The_Employment_Relationship_and_Inequality_How_and_Why_Changes_in_Employment_Practices_are_Reshaping_Rewards_in_Organizations/links/55647c8308ae87313dcb854a.pdf [Accessed 3 Jul. 2016].
Chuang, S. (2013). ESSENTIAL SKILLS FOR LEADERSHIP EFFECTIVENESS IN DIVERSE WORKPLACE DEVELOPMENT. Online Journal for Workforce Education and Development, [online] 6(1), p.17. Available at: http://opensiuc.lib.siu.edu/cgi/viewcontent.cgi?article=1133&context=ojwed [Accessed 5 Jul. 2016].
Hafiza, N., Shah, S. and Jamsheed, H. (2011). RELATIONSHIP BETWEEN REWARDS AND EMPLOYEE’S MOTIVATION IN THE NON-PROFIT ORGANIZATIONS OF PAKISTAN. Business Intelligence Journal, [online] 4(2), pp.327-333. Available at: http://www.saycocorporativo.com/saycouk/BIJ/journal/Vol4No2/BIJ-Vol4No2-July2011.pdf#page=130 [Accessed 7 Jul. 2016].
Hinkin, T. and Tracey, J. (2010). What Makes It So Great? An Analysis of Human Resources Practices among Fortune ’s Best Companies to Work for. Cornell Hospitality Quarterly, [online] 51(2), pp.163-168. Available at: http://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?article=1215&context=articles [Accessed 3 Jul. 2016].
McPheat, S. (n.d.). THE TRAINING MANAGER’S BIBLE. MTD, [online] pp.7-10. Available at: http://www.aub.edu.lb/fhs/heru/documents/heru/resources/pdf/tm_bible.pdf [Accessed 5 Jul. 2016].
Michael, A. (2008). Mentoring and coaching. CIMA, [online] pp.7-15. Available at: http://www.cimaglobal.com/Documents/ImportedDocuments/cid_tg_mentoring_coaching_Aug08.pdf.pdf [Accessed 5 Jul. 2016].
Nguyen Khang, T. (2012). TRAINING MANAGEMENT SKILLS FOR FIRST-LINE MANAGERS. Mikkeli University of Applied Sciences, [online] pp.54-90. Available at: https://www.theseus.fi/bitstream/handle/10024/48844/Bachelor%20Thesis%20by%20Luu%20Tran%20Nguyen%20Khang.pdf?sequence=1 [Accessed 5 Jul. 2016].
Perkins, S. and White, G. (2011). Introducing the Reward Management System. 2nd ed. CIPD, p.4.
REWARD MANAGEMENT. (2011). Shodhganga. [online] Available at: http://shodhganga.inflibnet.ac.in/bitstream/10603/5025/11/11_chapter%207.pdf [Accessed 3 Jul. 2016].
Reward schemes for employees and management. (2013). ACCA, [online] p.1. Available at: http://www.accaglobal.com/content/dam/acca/global/PDF-students/2012s/sa_jan13_p5_reward_a.pdf [Accessed 3 Jul. 2016].
Stiles, P., Trevor, J., Paauwe, J., Farndale, E., Wright, P., Morris, S. and Stahl, G. (2006). Best practice and key themes in global human resource management: project report. University of Cambridge, [online] pp.23-25. Available at: http://www.cihrm.jbs.cam.ac.uk/research/downloads/ghrra_report.pdf [Accessed 3 Jul. 2016].
Zhou, Y., Zhang, Y. and Montoro-Sanchez, A. (2011). Utilitarianism or romanticism: the effect of rewards on employees’ innovative behaviour. International Journal of Manpower, [online] 32(1), pp.81-94. Available at: https://www.researchgate.net/profile/Angeles_Montoro-Sanchez/publication/227429302_Utilitarianism_or_romanticism_the_effect_of_rewards_on_employees'_innovative_behaviour/links/00b7d51e3d69d7b835000000.pdf [Accessed 7 Jul. 2016].
