The Value of Hrm to Business Organizations
Loughborough University Business School
Human Resource Management
Coursework Title: The Value of HRM to Business Organizations
The Topic Chosen: Total Reward
Introduction
Nowadays, human resource management is widely believed to be of great value to the business organizations, but how each element of HRM adds value to the business organization is unknown. In this paper, we want to choose total reward as the specific topic to analyze the value of total reward to business organizations by analyzing Toyota and Google cases.
Section 1: Literature Review of Total Reward
Decades of research demonstrating that pay is not the only motivator, the development of globalization and the much more competitive business environment have all made traditional reward (mainly financial reward) viewed to be out of date. Business organizations need a new holistic approach.
• The Concept of Total Reward
The concept of total reward emerged in the 1990s as a new way to motive employees using all types of reward. Schuster and Zingheim(1992) modernize compensation programs, demonstrating how the elements of compensation including variable pay, base pay, performance management, measures and goals, and benefits can be used to support business goals. Base on the past literatures of total reward, we can define that total reward uses a holistic approach and embraces everything that employees value in the work relationship. It refers to all the types of reward (financial and non-financial, extrinsic and intrinsic, direct and indirect), all the tools and resources that make up the company’s strategy to attract, motivate and retain the employees. What is more, it should align with the business strategy and the HRM strategy of the company (Fernandes, 1998; Davis, 2007; WorldatWork, 2006).
• The Model of Total Reward
Also since 1990s, various total reward models have been developed. Schuster and Zingheim(2000) pose a total reward model which has four elements-individual
Human Resource Management
Coursework Title: The Value of HRM to Business Organizations
The Topic Chosen: Total Reward
Introduction
Nowadays, human resource management is widely believed to be of great value to the business organizations, but how each element of HRM adds value to the business organization is unknown. In this paper, we want to choose total reward as the specific topic to analyze the value of total reward to business organizations by analyzing Toyota and Google cases.
Section 1: Literature Review of Total Reward
Decades of research demonstrating that pay is not the only motivator, the development of globalization and the much more competitive business environment have all made traditional reward (mainly financial reward) viewed to be out of date. Business organizations need a new holistic approach.
• The Concept of Total Reward
The concept of total reward emerged in the 1990s as a new way to motive employees using all types of reward. Schuster and Zingheim(1992) modernize compensation programs, demonstrating how the elements of compensation including variable pay, base pay, performance management, measures and goals, and benefits can be used to support business goals. Base on the past literatures of total reward, we can define that total reward uses a holistic approach and embraces everything that employees value in the work relationship. It refers to all the types of reward (financial and non-financial, extrinsic and intrinsic, direct and indirect), all the tools and resources that make up the company’s strategy to attract, motivate and retain the employees. What is more, it should align with the business strategy and the HRM strategy of the company (Fernandes, 1998; Davis, 2007; WorldatWork, 2006).
• The Model of Total Reward
Also since 1990s, various total reward models have been developed. Schuster and Zingheim(2000) pose a total reward model which has four elements-individual
References: Besser, T. (1995), Rewards and organizational goal achievement: a case study of Toyota Motor Manufacturing in Kentucky, Journal of Management Studies，32 (3), 383-399 Chiang, Flora F Davis, Keith & Newstrom, John W. (1989). Human Behavior at Work: Organizational Behavior. New York: McGraw-Hill Davis, M Fernandes, F. N. (1998). Total Reward-An Actuarial Perspective. Actuarial Research Paper, No.116 Gross, Steven E Harter, J.K., Schmidt, F.L. & Hayes, T.L. (2002). Business-unit-level relationship between employee satisfaction, employee engagement, and business outcomes: A meta-analysis. Journal of Applied Psychology, 87(2), 268-279 Kaplan, Stacey L Life at Google (2010). Maslow, A. H. (1943). A Theory of Human Motivation. Psychological Review, 310-396 Medcof, John W O 'Malley, M. & Dolmat-Connell, J. (2003). From total rewards to total relationship. A ‘committed ' approach to compensation and benefits strategy. World at Work Journal, second quarter, 16-27 Richards, Jane (2009) Schuster, Jay R. & Zingheim, Patricia K. (1992). The New Pay: Linking Employee and Organizational Performance. San Francisco: Jossey-Bass Publishers Schuster, Jay R Thompson, P. (2002). Total reward. Executive briefing. London: Chartered Institute of Personnel and Development Towers, D WorldatWork (2006). The It Factor: A New Total Rewards Model Leads the Way http://www.worldatwork.org/waw/pub/workspan_trarticle.pdf, [Accessed 15/11/10] ZUO, Hongming (2010)