Unit Number and Title:

 Psychology, Performance and Reward Management

Assignment Topic:

The purpose of the assignment is to assess if students are able to; 

LO1 Analyse the process of and differing perspectives on performance and reward management

LO2 Understand reward structures that recognise labour market and equity constraints

LO3 Evaluate the appropriateness of performance and reward management strategies in relation to organisation objectives

LO4 Discuss recent trends in the management of performance rewards

Information and Instructions to Learners:

·         The recommended minimum word count is 3,000 words. Anything above +10% will not be marked.

·         Appendices and reference list are excluded from the word count and will not be marked.

·The reference style accepted is Harvard Referencing.

Context

You are required to complete five tasks.

Tasks 1, 2, and 3 are based on the case study scenario provided.

Tasks 4 is based on the short statement provided.

Case study scenario

Conrad Valves Ltd is a specialist manufacturer of various kinds of valves and pumps originally for the motor industry but more recently for other branches of the engineering industry, for example aerospace and marine. Under its Chairman and Managing Director (who is the major shareholder) the business has expanded its workforce from just under 150 to over 250 in the last three years. However, there have been problems recently to do with quality and a number of complaints have been received from customers. As Conrad Valves depended on its reputation for high quality, this was alarming. The Chairman has recently taken over another business and has therefore appointed a Managing Director for Conrad Valves. His function is to concentrate on running the company under overall guidance of the Chairman.

The new Managing Director

The Managing Director was appointed from outside and he had two briefs:

1) to do something about improving quality, and

2) to look at the organization structure, which the Chairman described as having ‘just growed’

The Managing Director was an engineer and conducted a review of the quality situation himself.

The organization structure the Managing Director found looked like this:

                                                                             Chairman

Managing Director

Sales                             Works                             Technical

                                Director                       Director                          Director

                Chief                                                                                                                                      Chief

                Accountant                                                                                                                         Buyer

An HR function was conspicuous by its absence, so the managing director engaged an independent HR consultant to find out how people matters were being dealt with, to examine the case for creating an HR function, and if one was needed to recommend what it should look like.

The consultant’s findings on the present arrangements were as follows:

●          Recruitment – each of the functions carries out its own recruitment, having agreed with the Managing Director on the engagement of additional people and what they should be paid. Some use is made of recruitment agencies for administrative staff but sales representatives, production engineering staff, operatives and technical staff are mainly recruited by advertisements. Interviewing techniques, as observed by the consultant, were crude to say the least.

●          Labour turnover – this is fairly high: 20 per cent for operatives and 15 per cent for technical and administrative staff. The failure to retain a number of recent technical and operative recruits is worrying and may have contributed to the quality problems.

● Training – there is no formal training; people are recruited with, it is hoped, the required skills and experience and learn the Conrad way of doing things on the job. Some supervisors carry out induction training conscientiously but the majority don’t. Again, it was considered that this prejudiced the achievement of high-quality standards.

●          Pay – operatives were paid the local going base rate (no payment by results) and staff were paid whatever it was believed necessary to recruit and retain them – there was no formal grade and pay structure. Pay was reviewed once a year, generally to keep pace with inflation and in particular to ensure that key staff were paid competitively. Cash bonuses (usually not more than 10 per cent) were paid to some staff as authorized by the Chairman. There was no performance management or appraisal system.

●          Employee relations – there was no recognized trade union but a large number of recently recruited employees were union members and there was a distinct possibility that they might ask for recognition shortly. There were no formal consultation or communication processes.

●          Health and safety – this was left to works management. Accident rates were fairly high.

TASK

On the basis of the findings summarized above, prepare recommendations on what should be done about HR functions namely reward management, performance management and grievance handling. Indicate how the problems revealed by the study should be dealt with based on the below questions and by referring to the above case

Assessment criteria (Total 30 marks)