Human Resource Management: Rewards and Remunerations

6 pages
1514 words
Vanderbilt University
Type of paper: 
Research paper
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AbstractOvercoming rewards dissatisfaction in a company that is highly reliant on the human resource can be a daunting task. For United Pharmaceutical Distributors, annual evaluations have consistently indicated dissatisfaction among the employees, even after numerous programs were put in place to address the issue. This paper will identify the most appropriate remuneration model to improve satisfaction by involving the members of staff in its creation. Methods to be used include focus group discussions and individual interviews, and questionnaires will be used to collect data on employees' views on how to establish a more satisfactory rewards scheme. Non-monetary schemes will also be considered for inclusion into the final solution to be adopted by the company. Atlas TI software will be utilized to analyze the data, with limitations being expected to come from the separation of emotions and fact in focus group discussions and interviews. Finally, the paper will propose a suitable solution for UPD to raise rewards satisfaction of its staff.

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United Pharmaceutical Distributors is a large distributor and wholesaler of pharmaceutical products in South Africa, and an affiliate of Clicks Group Ltd under its New Clicks South Africa Limited subsidiary. The company operates in Johannesburg, Cape Town, Bloemfontein, Durban and Port Elizabeth and has a combined workforce of 1020employees, three-quarters of whom earn a monthly stipend of less than R6, 000.

Context of the problem/Background to the problem

Employee Satisfaction Index (ESI) surveys conducted at UPD indicates that workers have continually been dissatisfied with the financial rewards offered at the company, (Clicks Group, 2015). This is a matter of grave management concern, as research has continually indicated that better remuneration brings about better performance, job satisfaction and reduces the turn-over of critical skilled employees that bring productivity to the company, (Moore & Bussin, 2012). The issue of reward dissatisfaction has remained even with programs being introduced aimed at improving rewards offering to the employees, in the form of performance bonuses, share options, and team and individuals incentives, (Clicks Group, 2015). The employees are not only dissatisfied with the rewards and benefits offering, they have also expressed unhappiness in discussion groups.

Motivation for the study

The management of UPD is dedicated to a people first policy, indicated by the ESI surveys conducted bi-annually and the programs introduced in attempts to improve employee satisfaction. With the company using complex technical systems to operate efficiently and relying on the ability of its staff to deliver consistently, skills attraction and retention is a critical consideration in remuneration. The most critical asset of business enterprises lay in the intelligent, skills and experience of workers, especially in the current dispensation of knowledge-powered global economies, (Nienaber, Bussin & Henn, 2011). It is therefore important for UPD to create a rewards system that will satisfy employees and empower them to perform their duties in the most productive way possible.

The competition for skilled workers is exceptionally high in South Africa. This is due to the effects of the Apartheid regime that left a scenario of racial and gender based skills shortages, (Nienaber, Bussin & Henn, 2011). The total cumulative financial cost of replacing lost skilled labour is also higher than 100% of the annual pay of the departing employee, (Schlechter, Thompson & Bussin, 2015) which makes it critical that employees are kept happy in order to avoid voluntary turnover.

Purpose of the study (research problem)Even with Clicks Group being the South African Top Employer award winner in 2016, the ESI results have continued to indicate low satisfaction with their rewards system. This is an alarming scenario that could create problems for the company later on if not addressed and mitigated. The purpose of this study is to come up with a solution that can be comprehensive, applicable, and effective in improving reward satisfaction of the UPD staff. The anticipated solution will be applicable to all outlets around the country, and could also be applied by other players in the pharmaceuticals industry. Economies of application will also be considered, as well as the administrative burden that will come with the rewards scheme suggested. Apart from improving the reward satisfaction of the UPD staff, the study anticipates to tackle and come up with improvements in five areas of human resource management as a project deliverable. This areas are; employee retention, motivation, labour relations, employee satisfaction, and productivity.

The study evaluates the benefits of establishing a flexible rewards model based on financial and non-financial incentives, in accordance with (Nienaber, Bussin & Henn, 2011) findings that differentiated rewards are attributed to higher satisfaction and motivation, as well as retention and motivation of employees, and that tailoring rewards to each employees individual needs, and going above monetary rewards is more effective in rewarding of employees. Therefore, the study shall seek to show that individualizing rewards schemes in accordance to employees needs is the best approach in improving rewards satisfaction.

Research questions

For the study to fulfil the purpose of creating a solution for the reward dissatisfaction at UPD, answers to some pertinent questions are required. These questions include;

What factors are responsible for the reward dissatisfaction witnessed among the employees even with special rewards programs being introduced?

How can the company get about finding solutions to the issues identified?

What benefits are expected from customizing reward schemes to employee needs?

What are some of the challenges anticipated from executing the proposed remunerations and benefits scheme?

How do you anticipate achieving the deliverables cited from the execution of the individualized rewards scheme?

Anticipated contribution

The study is conducted with expectations of furthering human resource management in rewards and remunerations in the ways extrapolated below.

Theoretical contribution

The study draws from scholarly articles that discuss remuneration in form of monetary and non-monetary rewards and the effect on employees. The impacts of various types of rewards schemes shall be visited and evaluated, with benefits discussed in detail. The study shall advance the concept of flexibility in rewards scheme as the most suitable solution to employee dissatisfaction. Other concepts of performance benefits, such as gain-sharing as opposed to profit sharing, shall be evaluated and considered for application in the workplace, starting with UPD, with other players in the industry expected to follow suit.

Practical contribution

Result findings of this study are anticipated to be indispensable in establishing a system of rewards that shall turn around the rewards satisfaction scenario at UPD. It is hoped that the use of flexible rewards in employee remuneration, as suggested in this paper, shall impact positively on the Employee Satisfaction Index of the company. Effectual use of the scheme also promises to improve the ability of the company to attract top skills from the scarce market, (Nienaber, Bussin & Henn, 2011) as well as retention and satisfaction of employees at the company, which is anticipated to boost productivity and profitability.

Although the primary aim of this research is focused on improving reward satisfaction, other key people deliverables will likely benefit from an appropriate rewards model and these will be;

Employee retention

To avoid losing key skills to the competition, which brings with it other costs in lost productivity, business process knowledge, and replacement costs, (Schlechter, Syce & Bussin, 2015). This will be achieved by proposing better ways to remunerate employees, which has been identified as a key driver of staff retention (Schlechter, Hung & Bussin, 2014)

Staff motivation

Rewards are one of the hygienic factors that bring about employee motivation, which in turn boosts their productivity and gives the company a greater competitive edge. Satisfied employees are more motivated. (Linz, S. J., & Semykina, A. 2012)

Labour relations

According to the Labour Relations Act, (1995) a fair rewards model will encourage sound labour relation. Weiner (1980) further states that satisfaction in pay reduces the pro-union sentiments among the employees, which portends a situation in which drastic labour unrest situations such as strikes, go-slows and sit in could be avoided if an effective rewards strategy is implemented.

The improvement of future Employee Satisfaction Index survey results, whi8ch will boost the attractiveness of the company as an employer and raise its ability to attract top talent and skills.

The improvement of productivity

Satisfied employees are more motivated to achieve organization objectives, and with motivation, productivity is improved (Sadri, G., & Clarke Bowen, R. 2011)

The researchers will through reviewing other research and theories, attempt to identify the remuneration model that will not only bring about satisfaction to the UPD employees, but also be relevant to the industry.

Findings of the study could also potentially be used by other human resource managers in other companies and industries to establish reward systems that are satisfactory to workers. Recommendations could also empower the workplace to not only be a place for workers to gain financially, but to also reap benefits of work-life balance and enjoy career advancement opportunities.


Research paradigm/approachThe research anticipates using three methods of research to gain a better understanding of the issue at hand and come up with a suitable solution. The research methods include literature review of relevant material, focus group discussions to gather data on the employees views on the rewards scheme currently in use, and one-on-one interviews with staff members to gain a more comprehensive understanding of the causes for dissatisfaction and proposed means of improvement.

The f...

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