Paper Example on Remuneration Model for United Pharmaceutical Distributors

5 pages
1214 words
University of California, Santa Barbara
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Research paper
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Overcoming rewards dissatisfaction in a company that is highly reliant on the human resource can be a daunting task. For United Pharmaceutical Distributors (UPD), 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 analyse 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.


United Pharmaceutical Distributors (UPD) 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 1020 employees, 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 by 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 turnover of critically skilled employees that bring productivity to the company, (Moore and 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, but 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 multifaceted procedural schemes to operate resourcefully and relying on the capability of its staff to convey reliably, 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 and 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 and Henn, 2011). The total cumulative financial cost of replacing lost skilled labor is also higher than 100% of the annual pay of the departing employee, (Schlechter Thompson and Bussin, 2015) which makes it critical that employees are kept happy to avoid a 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 likely solution will apply to all outlets around the country, and could also be applied to 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. These areas are; employee retention, motivation, labor 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 and 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 by employees needs are the best approach to improving rewards satisfaction.

Research questionsFor the study to fulfill 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 customising 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?

Therefore, there is need to understand how to anticipate contribution as outlined in the section below.

Anticipated contributionThe 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 the 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 limited market, (Nienaber, Bussin and Henn, 2011) as well as retention and satisfaction of employees at the company, which is anticipated to boost productivity and profitability.

Although the primary purpose of this study is concentrated on enlightening reward achievement, other key individuals deliverables will likely profit from an appropriate rewards model, and these will be;

Employee retention

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

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