HRM Aspects of Reward, Performance and Absence Management

free essayHuman resource management is fundamental for the survival of organizations because of its role in overseeing their most fundamental asset, the human resource (Price, 2011). The essential aspects of HRM that will be covered in this report include total reward management, evaluation and facilitation of employee performance, and absence management. The discussion of total reward is essential as it aims to illustrate the significance of total reward management as an effective way for organizations to attract talent and retain highly motivated employees. Performance evaluation is equally critical for organizations due to its role in building an empowered and motivated workforce. The discussion of absence management will serve to show organizations how they can curtail absenteeism at work in order to save costs and perform at full capacity. In addition, the report will also feature reflections that will add value to the effective resourcing of an organization and will make realistic recommendations for personal, managerial and leadership change where appropriate. Moreover, recommendations for improvement in personal and managerial effectiveness in relation to the above aspects of HRM will also be included in the discussion.

Total Reward

The term ‘total reward’ refers to an approach of reward management in which all aspects of reward are linked together as an integrated and coherent whole (Armstrong, 2012). The term can also mean the comprehensive returns, both monetary and non monetary, that employers provide to their employees in return for their time, talent, and efforts (Kwon & Hein, 2013). A package encompassing total reward therefore consists of the following, in addition to a regular salary and bonuses: medical coverage, retirement benefits and pension, work life programs such as paid and unpaid leaves, career advancement through sponsored schooling, flexible work schedules, perks such as company cars, among others.

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Theories of Reward

There are various theories of reward underpinning managerial practices as an approach to enhancing organizational effectiveness. This is because these theories explain how reward links with organizational effectiveness and thus detects managerial practices that need to be adapted for its realization. The discussion of the theories of reward and their application in managerial practice is provided below.

  • Reinforcement theory. The theory places emphasis on the behaviour of an individual. According to the reinforcement theory, a behavior with a rewarding experience tends to be repeated (Rowland & Hall, 2014). This theory enhances organizational effectiveness by making managerial practices to be focused on employee behavior. Managers apply this through the practice of rewarding employees whenever they record outstanding performance in their work. Thus, organizational effectiveness is enhanced due to excellent performance of the employees.
  • Expectancy theory. The theory focuses on the connection between rewards and behavior in a similar manner as the reinforcement theory (Mujtaba & Shuaib, 2010). The aspect of motivation is fundamental in determining this connection. Thus, according to the expectancy theory, motivation is the end result of valence, instrumentality, and expectancy (Rowland & Hall, 2014). Expectancy theory can be used to facilitate organizational effectiveness by integrating motivation into managerial practice. Motivation of employees is the driving force for an increased productivity and performance and subsequently the enhanced organizational effectiveness.
  • Equity theory. The theory postulates that employees put forth a certain level of effort that they compare to the reward potential offered by their employers (Rowland & Hall, 2014). This theory emphasizes the significance of equity in pay structure of employees and thus the remuneration process of organizations. Employees who perceive lack of equity in their reward seek a way of restoring it (Rowland & Hall, 2014). The equity theory can be used to advance organizational effectiveness by restructing managerial practices to include recognition of employee efforts in a fair way that would promote equity in reward. Further, managers can place more focus on encouraging employee behavior that leads to productivity by increasing the reward potential to match their efforts.
  • Agency theory. This theory focuses on the differing interests and goals of stakeholders in an organization and how employee remuneration can be applied to align with these interests and goals (Kwon & Hein, 2013). It indentifies the stakeholders of an organization as employers and employees, where the former is the principal while the latter assumes the role of an agent. For this reason, the pay that employees collect from their employers is the cost of agency. This theory claims that there is a need to choose a contracting scheme that wuld ensure there is alignment of the interests of the agents with those of the principal (Mujtaba & Shuaib, 2010). The theory of equity can be applied to enhance organizational effectiveness by making managerial practices more concentrated on enhancing the agency relationship between employers and employees. When these relationship is enhanced through the integration of goals and interests of the two parties, organizational effectiveness will be enhanced.

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Performance

Evaluating human performance in a business context refers to assessing the performance of employees in organizations. In order to ensure excellent and outstanding performance, it is essential to also facilitate human performance. According to Price (2011), one way of facilitating human performance is to engage employees in discussions with regard to the future of their career. This will set them on the path of improving their performance in order to meet the future expectations of their careers. Facilitating performance can also be done by carrying out training and development in various areas that need improvement (Rowland & Hall, 2014). This will improve the overall performance, since employee will have a chance to enhance their competencies. Creating an environment where employees have an opportunity to reach their full potential is another effective way of facilitating performance. According to Shaout and Yousif (2014), high performance of employees can only be reached following the realization of their potential.

Evaluation Methods

Evaluating human performance in a business context can be accomplished through application of the following methods.

  • 360-degree feedback. This evaluation method is based on the feedback that different parties from the employee’s working environment give on the employee’s performance (Shaout & Yousif, 2014). This method of evaluation involves seeking an input from managers and supervisors from the departments where the employee has worked. The result of such feedback may be further used to track the progress of the employees in their career development.
  • Critical incidents. This method involves a supervisor or a manager keeping an on-going record of the employee’s performance by collecting information about the incidents the employee has been involved in throughout the year. The information may then be used during the employee’s performance review (Walker & Moore, 2011).
  • Checklist. Despite of being simplistic, this method is highly effective in employee performance evaluation (Guerra-L?pez, 2008). It entails the formulation of a series of statements about the employee’s behaviour and traits. The evaluators are asked to assess to which degree certain traits or behaviours are characteristic of the employee under evaluation. This evaluation method is an essential and quick way of identifying employees that show poor performance in certain areas (Guerra-L?pez, 2008).
  • Essay evaluation. This evaluation technique involves an evaluator writing an elaborate statement about the employee performance. Significant elements that are included in the essay are strengths and weaknesses of the employee, the areas that need improvement as well as suggestions on how this can be done, and the aspects of the employee’s work and personality that are appreciated (Shaout & Yousif, 2014). This method is proffered because it accords flexibility and is effective in elimination of rigidity common in criteria-driven methods of evaluation.

Evaluation Process

Evaluation in human resource management stands for a specific way of assessment of human performance in a business context. First of all, it is essential to identify the performance elements of a given position through the establishment of performance standards (Wess, Brennan, Thomas, Kirlik & Miller, 2009). These performance standards refer to the elements that are critical to the performance of an employee. The overall unacceptable performance criteria are defined based on these standards (Shaout & Yousif, 2014).

The second step in the evaluation process is developing performance evaluation policies (Rowland & Hall, 2014). This entails determining when to carry out the evaluation, how often it should be done, and who should do it. Some specific evaluations should be carried out regularly or at least on an annual basis. As for the question who should carry out the evaluation, the possibilities include committees, peers, self, and subordinates (Shaout & Yousif, 2014).

The third step to take in the evaluation process is to carry out the actual evaluation (Wess et al., 2009). This will be done using the earlier identified evaluation methods depending on their suitability. It is significant to note that it is better to use more than one evaluation method. This is because a combination of methods will help to get a broader picture of areas where the employee needs to make improvements and formulate recommendations on how to achieve this.

Finally, the last step would be to provide feedback on the evaluation. The evaluator should have a talk with the subordinate with the aim of discussing the results of the evaluation. It is also significant to provide the employee with an opportunity to voice the problems they are facing at work that are impacting negatively their work progress. It is also a time for the employee and their supervisor to come up with a plan that will be used to make improvements and to set targets for the next evaluation (Shaout & Yousif, 2014).

Absence Management

Employee absence at work is a significant issue that has a negative impact on the organizational performance. Some forms of absence include sickness absence, unauthorised absence, and lateness (Robson, n.d.). Thus, it is imperative for an organization to develop effective absence management practices. This entails finding a balance between providing employees support in matters such as health problems, bereavement, and taking firm actions against those employees who take advantage of the organizations’ approved absence days (Johnson, Holley, Morgeson, LaBonar & Stetzer, 2012). Some of the most effective means of managing absence at work are described below.

With regards to absence due to sickness, the organization should adapt positive health measures. For instance, the organization should refer employees to health management programs such as employee assistance programs. This can include providing employees with health insurance or supporting them with payment (Baker McClearn, Greasley, Dale & Griffith, 2010). As a result, the employees will be able to easily secure their treatment and therefore get better faster. Additionally, the organization will be able to save costs associated with loss of productivity that results from employees’ absence.

Another effective way of absence management is carrying out an organizational audit on a regular basis. The audit will be essential in enabling an organization to detect the various forms of absenteeism affecting the performance and their causes (Banfield & Kay, 2012). This is an effective way of overcoming absenteeism at work, which will make the employees more cautious about their work attendance. It will also provide the organization with worthwhile information that would facilitate formulation of programs that can be used to curtail absenteeism.

Introduction of flexible working hours is another effective absence management method that organizations can use, as some forms of absenteeism are usually brought about as a consequence of employees feeling overwhelmed by their jobs (Robson, n.d.). Long working hours with minimal rest time such as vacations and holidays leads to many employees become exhausted. It therefore becomes common for many of them to report to work late or not report at all, or become hospitalised due to stress. When organizations introduce flexible working hours, they foster sufficient rest time and reduce exhaustion and stress among employees, reducing subsequently their absenteeism.

Organizations should consider adapting various monitoring procedures that will enable the identification of absent employees right away. Johnson, Holley, Morgeson, LaBonar and Stetzer (2012) suggest training line managers in order to improve their capability of identifying employees with the habit of being absent and how to deal with the situation. There can also be a central portal either through the use of a telephone or online, which will facilitate the reporting of the facts of employee absence. These should be short term disability absences and other leaves, such as sick leaves or vacation reports.

Conclusion

In conclusion, the HRM aspects of reward, performance, and absence management are essential for the survival of organizations as they are crucial for their ability to remain competitive. By applying the total reward system, which represents financial incentives provided to employees together with benefits that are not financial in nature, the organizations can get ahead of the competition, as it facilitates the ability to effectively retain talent and retain a highly skilled workforce. The theories of reward underpinning managerial practices as an approach to enhancing organizational effectiveness include reinforcement, expectancy, equity, and agency theories. Another important aspect discussed is performance management, which helps the organizations to track employees’ progress in its various aspects. It can be measured through the assessment of an individual employee’s performance by using methods such as 360-degree feedback, critical incidents method, checklist method, and essay evaluation. Finally, absence management is significant in helping organizations maintain productivity and save costs. It can be achieved by adapting positive health measures, carrying out organizational audits, and introducing flexible working hours.