(Solution) 5HR03 AC1.1) Explain the principles of reward and its importance to organisational culture and performance management.
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Description
Solution
The term “total reward” describes the benefits an employee receives from their job, which go beyond their base pay or compensation. Eco-Insulate UK will need to adhere to intrinsically suitable, fair, equitable, and transparent incentive policies in order to promote a positive organisational culture, drive transformation, and strengthen performance management. It is also important to note that when done effectively, total reward strategies do have the capacity to alter the organisational culture and thereby enhance corporate outcomes (CIPD, 2022).
Fairness
Consequently, Cotton (2023) argues that fairness is part of Eco-Insulate’s organisational culture as it promotes constructive employee relations and employee productivity. When compensation is perceived as unfair, then the confidence in the management is eroded, thus leading to low morale and a bitter employee who is disengaged. The compensation reviews must be done frequently to prove to the workers that their efforts are valued.
Adequate wages, which respond to the abilities, the responsibilities of the employee, and his performance, prevent a qualified worker from feeling underestimated at his workplace. Paying employees based on their success at work encourages better output. Inequitable organisational systems do not stimulate workers to become more productive or produce higher-quality work.
Transparency
Transparency in incentive practices is a key component of Eco-Insulate’s second main organisational culture. This will foster a culture of understanding and trust between the management and the employees. A culture of conjecture and uncertainty is facilitated by a lack of transparency regarding compensation decisions and benefit plans, and this gradually erodes employee collaboration and loyalty.
Transparency promotes pay-for-performance in performance management and this leads to increased output. When employees know what is expected of them and what is expected of anyone who excels in the position, then they can assume responsibility for their growth. Transparency helps make the rationale for awards clear and motivates personnel to set higher goals, and make it easier for Eco-Insulate to achieve its goals.
Equity
The notion of equity promotes individual justice in creating professional relationships and the organisational culture of Eco-Insulate. An equitable system offers a diplomatic approach to the way compensation is done depending on the job or contribution of the personnel, thus offering different employees their fair worth (ACAS, 2024). When people feel valued for what they can provide employers with, their loyalty towards such organisations and the morale of the organisation increases.
Equity business performance does not consider tenure and other aspects; it just focuses on rewarding work output. When variable pay is based on team and individual performance levels, fairness in pay increases the focus on performance and sustains a culture that promotes high-performance levels.
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(Solution) CIPS Advanced Level Contract & Category Management in P&S – APGM
- This business report has been used for evaluating the category and contract management in Eco2Solar Company.
- In particular, Eco2Solar operates to improve their project management (PM) and Cost Management (CM) as part of their category management has been evaluated.
- The areas of focus has included an evaluation of requirements for initiating and preparing category management, strategic and conventional sourcing process and role in contract management, tools and techniques for mapping categories of direct and indirect expenditure.
- From the findings obtained, innovative measures for improving the supply chain in light of categories and category management has been recommended.
- Further, in this business report, the contract administration and contract management in case of category management has similarly been evaluated in context of category management this is with assessment of risks and implementation of risk management techniques in contracts being reviewed in context of category management.
- In order to appreciate the best practice in category and contract management in the selected Eco2Solar construction spend area, use of quantitative and desk research has been pursued to obtain relevant data.
- Additionally, different tools have been applied such as Mendelow Stakeholders analysis, CIPS Category Management Cycle, CIPS Contract Management Cycle, Suppliers positioning, PESTLE analysis and SWOT analysis.
- Considering this business report findings, Eco2Solar need to improve their approach for risk management and efficiency and effectiveness of category and contract management.
- From these finding, the stakeholders collaboration in Eco2Solar need to be improved which can be done by embrace of blockchain technologies.
- Also, by identifying their PS&M teams training and capacity development, they would be able to improve on their category management. In the contemporary procurement environment, the training and capacity development has been noted as the best practice to manage gaps in their operations. Also, the findings indicate the need for Eco2Solar to improve their category management of their construction spend by coming up with appropriate SLA’s agreement and KPIs while ensuring they capitalise on innovativeness.
- For the project management and cost management, this being a long-term investment would require an improved auditing. This can entail embrace of analytics to analyse and present contract management data and appropriate management strategy.
- The importance of improved collaboration is ensuring stakeholders active involvement and awareness on core decisions made as this could harness their practice, contribution and suggestions noted.
- By successfully pursuing stakeholder analysis, it is important to maintain stakeholders relations which promote Eco2Solar organisation image and increase their market share.