Pay and Rewards in Human Resource Strategies

Pay and Rewards in Human Resource Strategies Introduction Socometal is joint ventures were 52% owned by French company and 48% by Senegalese it deals with metal container and can. 150-800 are working in the company for the past 20 years with the profit of $144 million. Analysis In this case study we can find three important people they are Diop is a Senegalese engineer (Asst Production Manager), Mr Olveir Bernard is a production Manager from France and NDiaye is a factory worker. African Management systems are followed in running the company. Majority of the managers are from Africa with only 8-10 Managers are from France. There was a meeting, where NDiaye requested Diop to sign an agreement regarding the overtime of two hour benefits to increase the production by 30%. NDiaye is solely responsible for the entire production process. Accepting the offer he positively replied that â€Å"We could even produce more†. 12000 units are manufactured per day and requests for 30% increase in the production level. Mr Bernard did not have good quality of manager as he was arrogant, uncommunicative and negative because of his character growth was limited. Socometal agrees with the contract to meet the short time increase in the volume of production. After doing so me calculation this was not agreed by Mr Bernard as he said â€Å"We will never get from our workers† after saying this he went to his home town due to illness. After the agreement proposal by Diop, he went to different department to discuss the proposal. Some French and Italian expatriates expressed that the workers will not do overtime but â€Å"most agreed it was worth a try†. Diop gave his agreement on condition to NDiaye by ensuring 30% increase in production by end of the day. Wages will be fixed only after assessing the increase of production by the management. One old French logistics manager said â€Å"Africans arent lazy but they work to live, and once they have enough they refuse to do more†. Action came into play after four days negotiation between Diop and NDiaye. Work was allocated to two of his subordinates to save enough time and energy to mobilise the workers. One of the Senegalese foreman declared that this agreement is an one of the best pract ice were workers can earn an extra money and also show French management that they are more capable workers than they think. Worker started one extra hour per day to increase the production to 8% more than expectation. Production levels been increased to 18000-22000 units per day between 38%-43% in two month time they created history and all the workers were so proud of their results. Mr Bernard returned from his illness he was shocked to see changes in the company there was dispute between Diop and Mr Bernard regarding the two hours pay to the worker, where work was achieved in one hour. Diops agreement with worker was not accepted by his manager and he stated that you have put the management in trouble and acted against company policies. He was unable to express his views about the process change to his manager as he was not interested. Thinking in employees prospective he plans to meet the Managing Director. To respect the words of Diop and NDiaye workers decided to maintain the new production level. The worker expressed if Mr Bernard deals the same as he did before the production reduces to normal. Background of HRM in India In todays world there is intense cut throat competition and everyone wants to reach great heights in order to stay in the top level for a longer period of time. India is land of opportunities and it is becoming one of the hot spots in the world. Human resource management is not same all over the world, its entirely differs from the societies within individual countries. Culture is defined as a group which moulds a person values, ethics and identity with the following differences like ethnicity, race, gender, class, religion, country so on and so forth. Cross culture in management terms- It means people working in the different cultural environment with different sets of people with different culture, caste and etc. However it is said that culture is concerned with the behaviour of our job, its all about adopting to the working environment, cultural differences, styles, participate in meetings, what we speak and finally dealing with the differences. Every company has an organisation s tructure and differs with each company; it literally means the companys structure of an organization according to their designation and ranks, 3 types of hierarchy system which is maintained in our country namely hierarchical, matrix and flat. These structures are prepared keeping just one home culture which indirectly hits back as diversity of culture is involved. It deals with the vision of the company and also defines responsibility to each staffs or individuals. It is also called as a management tool where division of labour is cultivated and it gives detailed structure of role from upper level management to lower level of management. Most companies in India are quality centric organizations which are ISO 9001:2000 certified which generally means quality is maintained. Managing people in India requires micro management strategy only with this strategy best outcome is resulted as when we compare to our western countries is different. Companies tends to run business on one talente d individual who will have the main control to direct the employees in order to get the assigned work done without any further questions. Meaning of pay in management terms Pay means its an amount which is paid to the staff in the organisation for the services rendered. There are 2 types of pay i.e. fixed and variable pay. Pay scales vary as per the role and designation in the company. Now let me take you to the subject matter of pay satisfaction in India. We all know that salary is an outcome of an employees work and it plays a vital role in the tenure of stay in an organization. Two types of organisation are operated in India they are Private and Public organisation. Private organisation pays more to employees compare to public organisation. Job security is less in private organisation when compared to public organisation. Some employees are paid more than the fixed salary due to personal attributes there are 2 types of variable are fixed and variable pay. All the companies in India are performance driven organization and they will undertake various improvements on research and development techniques by encouraging SMART objectives in order to drive and reward performances. In order to encourage performance, the company institutes a variable pay plan, for staff members in Work Level 1 and Work Level 2, Variable Pay is based completely on individual performance outcomes and for staff members in Work Level 3 and above the plan is based on documented annual corporate milestones translated into annual departmental and individual goals and performances. The performance contributions in the individual and corporate goals are rewarded every quarter. Below table is one of the examples of variable pay scheme. Managers in India Managers are one of the core head of a company with a significant impact in terms of their implementation in international companies. A manager should build a good rapport with his employees and moreover he should be kind and if any problem arises he should handle it carefully as many of the employees future hangs with him. There is a saying like, â€Å"Good managers gives good business†. Managers are exceedingly excellent and they have their own strengths in companys point of view. Strengths as follows like communication skills, managing a team, convincing employees, motivation and etc. Employees work harder and their work will not be notified as more of internal politics takes place. Let me give u an example to support my statement. Eg- Mr A works in, â€Å"MT† company for 5 years and he does not have good skills to support his tenure in the company, he was staying only because he had good rapport in the higher level management and Mr B joins Mr A as a colleague in the same department 3 years earlier, after 2 years there was an requirement for senior position where Mr B had all the requirements to support his 2 years stay in the company, management took a bad decision by recruiting Mr A stating that he had better work experiences when compared with Mr B. This is how mangers in the company hire an existing employee to a next level even though employee has good skills and all the qualifications to match the job profile, they would rather go to an employee who has only experience and not anything else. The final area of consideration in human resource management is pay and reward in perception relating to cross culture Cross culture issues come in the organisation level, the simple reason is that companies operates in different countries organizes their daily activities or business differently. Cross culture takes place when company goes for globalisation. One of the major competitions that the companies in India encounter is that in the domestic market, for instance, that international firms now faces a stiff competition from goods produced in India by imports and MNCs. Cross culture differences causes a great challenge to HRM Factors affecting industrial relations, loyalty, productivity etc are the attitude of the employers, values, outlooks, beliefs and the social factors. Its a never ending process and there is no stoppage to pick the cross cultural differences as they are many. We can differences in the labour mobility and inter personal factors. Let me give a best example. In UK we can find that head of the company or boss will be called as MR or by name but in our country addressing a boss by name would not be received Attitude towards employment Attitude varies from one individual to another individual, in the same way attitude of employers and employees in different country changes. We have heard about, â€Å"Fire and Hire policy†, as it is common in many countries but in some countries they follow lifetime employment. Earlier we (India) were following lifetime employment and employees will have right to change job as they preferred without giving any opportunities to newcomers by creating a surplus manpower and in these situations it is great difficult in dislodging inefficient employees. However the good news is that we are changing to the foreign culture by implementing Fire and Hire Policy. Salary Salary is nothing but a sizeable amount which is paid to employees of the company which may be fixed or variable. Money plays a major part in everyones life and it has become an essential resource just like water and air where we cant live without it. In India salary is not fixed for all the employees even though staffs in the same team work together, there lot of differences which really hurts in a big time. This is because of internal politics among employees and management, in this case not only management has to be blamed but also employees who uses personal force like emotions, love or attachments. Recommendations or influence Recommendations play an important role in India. For instance an employee, who does not have any management skills and ability to work in a company, still will be recruited to work due to the influence of higher authorities like politician, senior workers in the organisation and etc. When compared to other parts of the world, the entire management system is purely based on the individual working skill and attitude. Performance Appraisal Performance appraisal is nothing but the assessment of employees performance and meeting the set targets. In India appraisal is done on yearly basis and employees will be intimidated by the pay increase from the management. We have skilled labours and pay is not compensated with that skills. By evaluating employees performance management takes all the necessary aspects into consideration like metrics which should always be green and not even amber is entertained. Before performance appraisal, managers would speak in such a way that better appraisals are given to the workers and get the job done even on weekends where salary is not counted for that day. They would also tell that they will look after the future growth in the company but fail to do so even though they employees have brilliant track records. Once appraisals are done managers does not even listen to employees feedback on appraisals. The following chart demonstrates increase in HRA, Current Allowance and Medical Allowance and there is no difference in Basic Salary even though performance appraisal in increased by 4% Compensation and rewards Compensation entails salary and other benefits, salary refers to the wage or salary the employees earn, the reason for compensation is that employees work harder which will influence the attitudes and behaviours. In other words its just like a motivation or energising employees to perform at the highest well. Compensations are just said but its not given. Managements Decision Management takes decision only in companys point of view and not in employees perspective. Before taking decision even suggestions from the employees are not welcomed. Even employees do understand its not necessary to consult in the entire cases but to some extent it has to be discussed where employees are involved in the work. An individual opinion does not count even though we (employees) are called as company assets. Employee Relations Good employee relations will be recognised with the good rapport and team building environment but in India employee relations are not as very good as it was earlier. Employees are not valued as they are underrated even though they perform well. Recommendations Each and every employee should be treated equally with no variances All the employees must be treated equally with respect and there should not be any variances. It means that management sets up company policies stating that there should be no discrimination, harassment of any employee either directly or indirectly with respect to race, culture, nationality, marital status and age etc. However employees do not follow and creates hassle in the organisation by not following the ethics and principles. Manager should build good rapport with the employees There are several factors which contribute to build rapport with the employees. Managers earn their respect by respecting the employees. If an employee does not perform well or fail to meet the target, discus the problems that they face in an informal way and support them when they are down and out. Have an informal talks when needed than formal talks, they should not neglect their work as priority should be given to employees work than anything else. A manager should entertain to have open discussions Manager is not the only person who works in the organisation but there are many of the employees, staffs and workers work above or under him. Good decision yields good business to the company so when managers take decision he should take decisions in management point of view and with the employees perspective in a better way. Minimum wage act as per Government of India Revised wage is Rs 100 per day and it is not properly designed to lower categories of people working in the organisation such as security, housekeeping department, etc. Some people do not know what our minimum wages is and company utilizes the resources very well, as majority of the employees are illiterate. Government of India should ban consultancies or agencies who operates illegally Consultancy is a recruitment centre where people are trained and recruited on behalf of the company. There are number of consultancies in India and its rapidly growing, People who lack skills can even join the company by paying huge amount of money and consultancies are misusing it in the name of recruitment. Where as in other countries the role is to forward the resume to the company and their work stops. Employees should be compensated with better pay Awards and reward is not given to the individuals who works in the company and their work is not recognized by the top level management. Skilled labours are not paid properly for their work. Most of the MNC companies have their employees to sign a contract or just like a bonded labour which is illegal in India but management follows the same and interestingly employees signs the contract because of stiff competition in the market and risk of not getting the desired job. Compensations are not paid fully and correctly in time during emergencies. During training period and internship programmes trainee should be given atleast minimum wages to satisfy the basic needs Salary structure should be well organised by the management Management should implement good performance appraisals as in India we can find that whenever appraisals are done only with respect to HRA, medical and travelling allowances, no changes are made in the basic salary. Management plays a hidden role in fixing the basic salary to the employees, as it should fix different levels of basic pay as per the role and designation in the company. So whenever an employee moves forward to the next level, he should be accompanied with respect to the salary structures as per the requirements of the specified designation demands. References Armstrong, M. (1997) People and Organisation. London Henderson, I. (2008) Human Resource Management. London: CIPD Johnson, R. (2004) The Practice of Cultural Studies. London: SAGE Perkins,Stephen J. Shortland, Susan M. (2006) Strategic International Human Resource Management. London: CIPD Sharma, a. Khandekar, A. (2006) Strategic Human Resource Management. London: SAGE Thomas J Bergmann Vida G Searpello (2000) 4th edn. Compensation Decision Making. London: Willy McCourt Derek Eldridge (2003) Global Human Resource Management. London: (n. d.) [online] available from [04.04.10] (n. d.) [online] available from [08.04.10] (n. d.) 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