ChocoTreat

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Nov 24, 2024

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ChocoTreat – Performance and Reward Management System Table of Contents 1.0. Introduction ................................................................................................................................ 1 2.0. Evaluation of the Current Performance & Reward Management (PRM) Strategy at ChocoTreat Company ................................................................................................................................................. 1 2.1. Current performance and reward offering at ChocoTreat ............................................................... 2 3.0. Analysis of Potential Challenges and Issues at ChocoTreat Company ............................................. 4 4.0. Recommendations ........................................................................................................................... 6 4.1. Conclusion ........................................................................................................................................ 9 5.0. References ...................................................................................................................................... 10

1.0. Introduction The staff members of an organisation are fundamental investment for the organisation as they are the main donors to the effectiveness and productivity of the organisation (Kent, 2018). The expansion, growth and success of an organisation rest on the performance of its staff (Katzenbach & Smith, 2015). Thus, such people management strategy that combines different elements in the form of transactional or relational, maximizes its effect on employee motivation, commitment & engagement (Anku-Tsede & Kutin, 2013). Harington & Lee (2015) found that an employee’s lack of satisfaction with the organisational performance/reward process leads to job dissatisfaction, low morale and decline in organisation commitment that takes forms in absenteeism, grievances and turn over intention. Omolawal & Bawalla (2017) blames this on the fact that business owners are in continuous search for improvement in their quality while decreasing cost, thus increasing the conflicts between the goal of the employees and management. Nevertheless, for an organisation to get the best out of its employees there is need to redefine the performance and reward packages from a traditional approach that seeks to evaluate an employee’s performance over time to a more proactive than reactive approach thereby improving the employee performance (Shields et al., 2016). Considering the foregoing, this paper seeks to evaluate the current performance & rewards offering at ChocoTreat Company and recommend improvements, bearing in mind the context of the company. 2.0. Evaluation of the Current Performance & Reward Management (PRM) Strategy at ChocoTreat Company A total rewards approach steers employees towards better productivity in achieving the business plans, mission, vision, and core values of the company. The expectancy theory of Vroom (1964) connotes that individuals are motivated to perform if they know that their extra efforts is recognised and rewarded. A more scholarly definition of reward includes anything tangible or intangible that an organisation provides to its employee either intentionally or unintentionally to reinforce the desired and expected behaviour of the employee for service with an objective to maintain, retain and attract efficient and effective employees (Shields, et al., 2017; MBA Skool Team, 2021). The above definition approaches reward as a tool that is not centred on money aspect but includes various non-monetary elements, with a focus to sustain the company, maintain a skilled workforce and attract potential talents to the firm who will support the goals and vision of the enterprise.

2.1. Current performance and reward offering at ChocoTreat PAY Salary paid: Executive team/management, administrative staff. Hourly pay rate: staff Bonus: executive team/management BENEFITS Pension: executive team/management, administrative staff, and all staff. Flexitime: administrative staff. Holiday: 30 days for executive team/management, while 25 days for other staff Free gym membership: executive team/management Employee of the month award: staff Free meals, discounts, and social club membership: All staff. LEARNING AND GROWTH Induction: every new employee who joins the company is inducted. Appraisal/performance review: not fully implemented, hence, only about 50% of managers receive appraisal yearly. Development: personal development courses available for all employees. WORK ENVIRONMENT The working environment is flexible and encourages diversity in the workplace. Rewards are classified into two major aspects namely intrinsic or intangible reward and extrinsic or tangible rewards (Kikoito, 2014). The presence of both aspects of rewards in an organisation performs magic in the working behaviour of employee and implies success and achievement of the organisation. In theory, intrinsic and extrinsic rewards connect with the Hezberg’s two factor theory that assumes that the presence of motivational factors will cause satisfaction whereas; the absence will cause dissatisfaction (Herzberg, Mausner, Synerman, 1959). In other words, intrinsic rewards when present will increase ChocoTreat’s employee motivation towards job performance and productivity, but the absence of extrinsic reward will decrease employee motivation towards job performance and productivity. Financial rewards or remuneration;

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development rewards, and social rewards. Whereas the example of intrinsic reward includes feedback and decision-making involvement in the firm, autonomy and task variety. However, the current PRM at ChocoTreat’s head office is designed in a way that is more extrinsic and less intrinsic yet applied in an ethically sustainable way that is based on the structure of the head office built on three tier layers that includes the executive team and management (all levels of managers, superior, HR etc.), administrative staff (administrators, IT Clerk etc.) and staff (cleaners, gardeners etc.). By applying the reward in an ethically sustainable way, ChocoTreat ensures that the conduct of the company practice considers their impact, economically, socially, environmentally and with respect to the individual fundamental rights and subsequently leads to achievement of their mission, vision, and business goal. ChocoTreat Company PRM for the ‘executive team management’ and ‘administrative staff’ is based on a spot salary. CIPD (2022) states that spot salary for senior positions is to attract, retain and motivate a specific individual and it has no definite structure for progression. The weakness of the spot salary in ChocoTreat is that it makes it more difficult to engage employees as the option for development and growth is solely based on direct promotion and/or position. ChocoTreat Company offers higher spot rate based on competition in the market or inflation (high cost of living), Morris (2021) argued that this salary method has the potential of making an employee loose motivation and satisfaction at the long run. This could lead to employees leaving the company and thus jeopardizing the company’s chances of achieving its set goals. On the other hand, salary structure for ‘staff’ is based on the hourly pay minimum wage based on age as stipulated in UK employment laws that guides employers and employee relationship. However, the two different ways of paying employee indicates a flaw in ChocoTreat current strategy as it shows inequality in distribution of rewards. Also, the learning and development programs as part of the extrinsic reward at ChocoTreat Company are designed to help influence employees’ innovation towards products, customer relationship and market competition. However, it can be deduced that the learning and development for the employee seeks to benefit the company towards achieving it plans and missions and not towards the individuals to find inwards expression of how the current job affect his personality, growth and personal development. This can affect individuals’ psyche in the long run as they would want to have autonomy over their jobs thus behaving in ways that gives them

satisfaction rather than promoting organisation goals. Furthermore, it can be argued that the reason for the learning and development approach in ChocoTreat Company is because the company operates an organisational control method known as cultural control. Salmi &Aveh, (2016) asserts that cultural control seeks to guide an employee’s behaviour in accordance with the norms and communal value of the organisation. However, for ChocoTreat Company, culture predicts performance, and this is the reason for the induction ceremony, to help the employee align with the company cultural values in order to perform better and have a competitive advantage in the market. 3.0. Analysis of Potential Challenges and Issues at ChocoTreat Company Changes in the UK labour market, covid-19 pandemic; British expansion plans for growth in business and globally, inflation in the UK economy, technological changes and other evolving issues within a country challenges the dynamics of the market environment (Kamuri et al., 2021). These challenges are causative factors that strengthen competition among companies forcing employers to review their performance and reward systems in order to recruit and retain efficient and talented employees into their organisation. This is necessary because an organisation understands the value in retaining a well skilled employee, as they are critical in affecting the performance and success of the company. Likewise, ChocoTreat is challenged by these factors as they seek to review their performance and reward offering to accommodate these variations and trends in the market. However, these challenges and issues are highlighted and discussed using the Cultural and PEST tool while elucidating the implication(s) on the company’s current PRM. Political factors The current trend of the market is affected by the recent expansion plans for growth in the UK by the UK government. The impact of this on business is that it gives organisations an advantage to diversify their brand, connect with new customers, and gain global awareness while having access to the local resources, incentive, and labour market (Kamuri et al, 2021). The implication is that competition in the labour market would be intensified, thus organisations would need to improve their PRM strategy to attract talented employees to boost their performance as they thrive. Likewise, ChocoTreat will have to pay above market rate or adopt a total reward strategy.

Also, the changes in the office of the prime ministers in UK have caused some level of instability including BREXIT. This is in turn impacting on trade laws and increasing cost of chocolates which may be absorbed by the customers. Further, government policy on chocolate sugar content by 20% due to public health concern of obesity- in order not to compromise the flavour, they proposed reduced size instead which will in turn affect the cost of chocolate. Economic Factors Upsurge inflation and high cost of living are traits of the current UK economic situation. The writer asserts that inflation and high cost of living puts employees at financial risk especially if their remuneration cannot adequately provide for their basic needs. For example, the spot salary structure adopted at ChocoTreat to pay senior staff can be problematic during economic hardship, as most organisations lay off certain positions to cut cost. These layoffs can make these positions less competitive in the market. Worthy of note is that the amount paid as spot salary is controlled by market demands/competition for such positions. Thus, the spot salary risks the position of these employees if it is less advertised. This situation can lead to poor performance emanating from low motivation (wages) from their jobs. The implication of this is that the PRM of ChocoTreat is flawed and needs to be modified to accommodate evolving market that will benefit the employees. Social Factors The current PRM strategy of ChocoTreat Company does not incorporate a working lifestyle that endorses the employees to work from home (Remote working). Nina (2020) posits that remote working is beneficial in decreasing commuting time and cost and helps lower the carbon front print of employees. Flexible work design/structure has become one of the most sought values that employees look out for from employers. Statista reported that the number of those working from home has increased by 2.73 million after the number of remote workers reached 5.6 million in 2020. The autonomy derived from remote working is an intrinsic reward for the employee. Thus, ChocoTreat PRM review should be able to adopt this change in work lifestyles as a way to intrinsically reward their employees. An important fact to note is that remote working doesn’t not only benefit the employee, it gives an advantage also to the employer who gets to attract and retain skilled workers to achieve its organisational goals. Also, remote jobs promote diversity and

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broaden their talent pool and increase their chances of recruiting actual talents from a tight employment market. Technological factors The world keeps advancing technologically and these changes impacts the way organisations and employees succeed in doing their work (Beer & Mulder, 2020). On the case, they have a website that only accounts for 10% of sales while exclusively selling on the high street. This is an indication that technology is not adequately utilized here. Additionally, the new face of technology drives disruptive changes in recruitment process. Technology makes recruitment more flexible as companies can source for skill needed from a range of applicants globally. On the brief, ChocoTreat still relies on advertising vacancies internally. This implies that ChocoTreat won’t gain a wider skilled workforce and reduce the human inputs in sorting application that technology offers. 4.0. Recommendations Having evaluated the current performance and reward offering of ChocoTreat including the potential challenges, the following recommendations are proposed to improve its impact on the organisational and employees’ goals. Adoption of a new Organisational Reward Strategy The traditional reward system of ChocoTreat needs to be replaced with a total reward (TR) system. Armstrong (2016) defines TR as the “combination of the two major kinds of rewards which are transactional and relational rewards where transactional are tangible rewards arising from transaction between the employer and the employees concerning pay and benefits and the relational are intangible rewards are concerned with learning and development in work experience”. The package should be a blend of all the benefits, pay and other types of reward the ChocoTreat intend to offer its employee. In Maslow’s theory, an effective and efficient total reward package fulfil the 5 hierarchy of needs namely self-actualization (achieving one’s potential), esteem (recognition), love and belonging (friendship, sense of belonging), safety (job and health security), and psychological (food, water). In view of the foregoing, the total reward strategy for ChocoTreat should be drafted in a way that is suitable for the current market in order

to motivate and retain employees and attract top talents to the company while achieving organisational goals. The total reward strategy is outlined and discussed in 5 points below: A. Compensation: In business, it refers to the monetary payment given to an individual in exchange for their services. In a total reward strategy, there are different types of compensation such as base pay, premium pay, incentive pay etc. However, the most suitable pay proposed for chocoTreat is the base pay. It should replace the spot pay. Bamboo, HR (2022) asserts that a base pay is the amount an employee is paid for the work as agreed upon during the wage negotiation- hiring process as related to the employee’s pay rate schedule (salary pay, hourly wage or weekly pay). The base pay suits ChocoTreat because it is designed and delivered to be consistent with competitive market salary range for skill or expertise; it establishes a merit pay system that ensures internal and external equity and non-discrimination in compensation (Total Reward Solution, 2022). In Maslow’s theory, the base salary fulfils the need of ‘safety’ and ‘psychological’. B. Benefits : Eden health team (2021) posits that a good benefits plan makes an employee feel adequately rewarded and satisfied in his job. This explains the second hierarchy needs ‘esteem’ in Maslow theory. Literature has founded that employers are more likely to leave their jobs in 12 months if they are dissatisfied with the benefits package of an organization (Eden health team, 2021). Thus, the benefit package in ChocoTreat should be tailored to increase retention rates, motivate the workforce and employ a healthier work force. The benefits include but are not limited to the following:  Health and Welfare benefits  Retirement plans  Payment for time not worked The presence and practice of these benefits will serve as a stimulant that reinforces productivity in the employee, maintain top talents and attract new skills in the organisation. This is the essence of positive reinforcement according to the theory of operant conditioning (B.F Skinner, 1930).

C. Work-life balance : The current climate in UK and globally shows that people desire a job that suit their lifestyles (a life outside of work to interact socially) and health. Thus, in this category of total reward package the following work-life balance are taken into consideration.  Alternative Work Arrangement.  Paid and Unpaid Time Off.  Health and Wellness.  Others depending on the current climate. Bahin (2015) maintains that the purpose of a work-life is to build and maintain supportive and healthy work scenery that will help the employee to have a balance between work and personal duty and thus strengthens employee loyalty and productivity. Basically, a better work-life balance creates happiness and satisfaction, reduces stress, gives better focus and fosters personal health and wellbeing for the employee. Also, work-life balance also has an implication on the company e.g. better staff retention, increased productivity, build a strong brand reputation that attracts talents, increase employee motivation and reduce absenteeism (Global Payroll, 2022). D. Performance and Recognition : This aspect of the reward package is designed to inform the employee about their eligibility for certain awards/recognition and performance goal. Natalie (2022) found that employee recognition is a fundamental employee need that steers up productivity, decrease turnover, improve team culture, increase retention of quality staff as well as brings satisfaction and pleasure over work. For ChocoTreat, the following is recommended: 1. Recognition e.g. service award, goal-specific award (measured by quality, efficiency, cost saving, productivity and safety), appreciation luncheons, employee of the month and other programs as suggested by the employees 2. Performance - performance review, performance planning/goal setting sessions and project completion and team management. E. Development and Career opportunities : The total reward package under this category should contain:  Learning opportunities - new technology training, attending seminars and conferences, access to virtual learning, self-development tools etc. This can be implemented in the

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form of training or tuition reimbursements to employees or unlimited access to development materials on specific LMS platforms.  Coaching - leadership training, mentoring etc.  Advancement opportunities - career ladder and pathways, internal job posting, job advancement/promotions, etc. An organisation with similar reward system as this is the German-based Infinenon Technology Company. This aspect is so robust in the company that it is termed the ‘career projector’ to enable employees seek clarity (through coaching) and develop their career and personal achievement, enrich their ability, increase responsibility in the same job as well as gain knowledge through experience (Infineon Technologies key data, 2021). Notably, total reward package for ChocoTreat should not be limited to any particular set of employees but applicable to all so as to encourage a fair and equitable system while accounting for the challenges discussed cultural and PEST analysis. 4.1. Conclusion Hearn (2012) pointed out that the slightest indication or feeling that employees are not adequately recognised could lead to a nose-dive of morale and productivity level. It is therefore important that TR strategy is well implemented to meet both the goals of the organization & employees. A good performance evaluation increases employee’s skills and outcome (Fernandex, 2017). Work quality, efficiency, maintenance/adherence to company values and customers satisfaction are the basic tools for measuring the performance of the employees. These tools are discussed in detail how they can be managed, evaluated and rewarded below: Work Quality: This is measured by the percentage of the work output; it is managed through observation, learning and development programs; it will be evaluated based on performance feedbacks and rewarded through awards and recognitions. Efficiency: It is measured based on how fast and smooth he/she achieves that aligns with the company goal (expectation); it is managed through appraisal from superior and coaching; it is evaluated based on time management; and it should be rewarded with recognitions, cash price and promotions.

Maintenance and Adherence to Company Values: This is measured based on how the employee maintains and ensures that the regulatory standards, policies and guidelines are observed; it can be managed through orientations and communal culture; it is evaluated through employees’ attitude towards work and assigned roles and it is rewarded through recognitions and gifts that may not necessary. Hr managers are charged with the responsibility of attracting talents, retaining and motivating them for as long as possible. A realization that Rewards offering if well implemented can improve the company's competitive edge, increase output, thereby enhancing the sustainability of the biz. Therefore, it is vital to approach rewards from a holistic perspective not just because it is good people management practice but because it possesses the power to attain the company & employee objectives. 5.0. References Anku-Tsede, O. & Kutin, E., (2013). Total rewards concept: a key motivational tool for corporate Ghana. Business and Economic Research , 3(2), 173-182. Armstrong, M. (2006). A Handbook of Human Resource Management Practice. (10th ed.), Kogan Page Limited, London. Armstrong, M. (2019). Armstrong's Handbook of Reward Management Practice: Improving Performance through Reward. Kogan Page Publishers. Armstrong, M., & Baron, A. (2019). Managing performance: Performance management in action. Kogan Page Publishers. Ayesha, B. S. (2014). Impact of employee motivation of the telecommunication industry of Bangladesh: an empirical study . IOSR journal of Business and Management (IOSR-JBM), Vol. 16, Issue 12. Ver. II, 22-30. Boswell, W. R., & Boudreau, J. W. (2002). Employee satisfaction with performance appraisals and appraisers: The role of perceived appraisal use. Human Resource Development Quarterly , 13(1), 21-41.

Bracken, D. W., Timmreck, C. W., Fleenor, J. W., & Summers, L. (Eds.). (2017). The handbook of multisource feedback: The comprehensive resource for designing and implementing MSF processes. John Wiley & Sons . Casper, W. J. & Harris, C. M. (2008) Work-Life Benefits and Organizational Attachment: Self- Interest Utility and Signaling Theory Models. Journal of Vocational Behaviour , Vol. 72, pp. 95– 109. Babin, D. (2015). A Report on the Importance of Work-Life Balance. International Journal of Applied Engineering Research , 10(9), 21659-21665. Bamboo HR (2022). Base wage rate: What is base wage rate. Accessed from https://www.bamboo.hr.com/hr-glossary/base-wage-rate/ . CIPD (2022). Pay structure and pay progression. Accessed from https://www.cipd.co.uk/knowledge/fundamental/people/pay/structures-factsheet#gref . Eden Health Team (2021). Why are Employees Benefits Important? Accessed from https://www.edenhealth.com/blog/why-are-employee-benefits-important/ . Enemuo, I &Olateju, I. (2021). Rewards Management Systems and Employee Performance in The Fast Moving Customer Goods (FMCGS) sector in Nigeria. Academy Journal of Management, Marketing and Entrepreneurial studies , 8(4), 43-50. Fernandez, P. (2017). How measuring and managing employee performance drives business growth. Accessed from https://rmi-solution.com/measuring-managing-employee-performance- drives-business-growth/ . Harrington, J. & Lee, J. (2015). What does perceived fairness of performance appraisal? Exploring the effects of the psychological contracts fulfillment on employee’ perceived fairness of performance appraisal in US federal agencies. Public Personal Management, 44(2), 214-238. Herzberg, F.I., Mausner, B. & Snyderman, B. (1959). The Motivation to Work. 2nd edition, New York: John Wiley. Infineon Technologies key Data (2021).

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Katzenbach, J. R., & Smith, D. K. (2015). The wisdom of teams: Creating the high-performance organisation. Harvard Business Review Press. Kent, R. (2018). E-performance and reward management. In book: e-HRM. Digital approaches, directions and applications, pp-196-213. Kikoto, J (2014). Impacts of rewards system on the organisation performance in Tanzanian Banking Industre: a case of commercial banks in Mwaza city. Kumani, K., Ni-Barkat, S., Khan-Nisa, N. &Abass, J. (2021). Examining the Role of Motivation in Employees’ Job Performance through Mediating Effects of Job Satisfaction: An Empirical Evidence. Internal Journal of Organisation al Leadership , 10, 401-402. MBA Skool Team (2021). Reward- meaning, importance, types and example. Accessed from https://www.mbaskool.com/business-concept/human-resources-hr-terms/16854-rewards.html . Morris, D, (2021). Different types of pay structures. Accessed from https://www.davidsonmorris.com/different-types-of-pay-structure/ . Natalie, W. (2021). The Importance of Employee Recognition: Statistics and Research. Accessed from https://www.quantumworkplace.com/future-of-work/importance-of-employee-recognition . Nina, J. (2020). Remote Work- Advantages and Disadvantages. Accessed from https://www.spica.com/blog/remote-work-advantage-disadvantages . Omalawal, S. &Bawalla, O. (2017). Performance and reward system in an organisation. Human Resource Management Journal , 9(1),73-82. Sabuhari, R., Sudiro, A., Irawanto, D., & Rahayu, M., (2020). The effects of human resource flexibility, employee competency, organizational culture adaptation and job satisfaction on employee performance. Management Science Letters , 10(8), 1775-1786. Salami, H.A &Aveh, M.C (2016). Relationship between organisational culture and innovation with the mediation of job enrichment in the governor’s staff. Indian Journal of Positive Psychology , 7(1), 21-25. Shields, J., Brown, M., Kane, S., Dolle-Samuel, C., North-Samardzic, A., Mclean, P., Johns, R.,

O’Leary, P., Plimmer, G. & Robinson, J. (2017). Managing Employee Performance and Reward: Concepts, Practice and Strategies. 2nd edition, Cambridge University press. Total Reward Solution (2022). Compensation sense: Why your base pay program is the most crucial compensation component. Accessed from https://www.totalrsolution.com/compensation- sense-why-your-base-pay-program-is-the-most-crucial-compensation-componeny/ . Willsen, W. (2020). The influence of incentive and reward towards employee performance at the Traders Resturant Medan. (Unpublished doctoral dissertation), Universitas Pelita Harapan.

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