Managing Human Resources Essay Example | Topics and Well Written Essays - 4000 words

Managing Human Resources - Essay Example As a work motivational approach, Cummings and Worley (2009, p. 434) explained that rewards can either be intrinsic or extrinsic by nature. In line with this, intrinsic rewards include the use of sincere acknowledgement for a good performance whereas extrinsic rewards can be in a form of increased salary, stock options, work promotion, or bonus given to employees (Cummings and Worley, 2009, p. 434). As compared to the use of extrinsic rewards, it is easier to implement intrinsic rewards because HR managers can easily make it a habit to acknowledge the effort of each employee in making the organizational goal attainable rather than requesting the business owners and board of directors to increase the available fund which can be use to reward employees for any improvements in their work performance (Shamir et al., 1993). According to Pfeffer (1998, p. 110), HR managers often ask the question â€Å"how much to pay employees† or â€Å"how much compensation package should be includ ed in the company’s reward system† in order to increase the work performance of each employee. Pertaining to the importance of developing and implementing effective pay and reward system, this report will focus on discussing how internal factors (i.e. organizational vision and mission, organizational structure, organizational culture, business objectives and business strategies) and external factors (i.e. competitors’ pay and reward system that is heavily influenced by economic pressures, the current labour market condition, government implemented labour policies, legal issues concerning the basic labour requirements, and the global labour environment) could shape the organizational approaches when designing a business organization’s pay and reward system (Heneman, Fisher and Dixon, 2001; Zingheim, Ledford and Schuster, 1996). Based on the research findings, the researcher will analyze how each factor is link with the other identified factors when designin g pay and reward systems. Internal Factors that Shapes the Organizational Approaches when Designing Pay and Reward Systems Several research studies revealed that internal factors that could significantly affect the shaping of organizational approaches when designing pay and reward systems includes the organizational vision and mission, organizational structure, organizational culture, business objectives and business strategies (Heneman, Fisher and Dixon, 2001; Zingheim, Ledford and Schuster, 1996). Depending on organizational vision and mission, organizational structure, business objectives and business strategies, a business organization can develop a culture with regards to its accepted and widely practiced pay and rewards system. Communicating the organizational vision to the rest of the employees serves as a guide in the development and implementation of strategic planning. In line with this, a shared vision can be use as a guide in developing the kind of reward system which co uld effectively motivate each employee to improve their work performance (Worldatwork, 2007, p. 39). Upon analyzing the significance of organizational vision and mission in the designing of pay and rewards systems, it is necessary for HR managers to be familiar with the organizational