Description
Solution
A PESTEL analysis is a framework used to analyse the macro-environmental factors that may have an impact on an organisation as evidenced by CIPD (2023a). PESTEL stands for Political, Economic, Social, Technological, Environmental and Legal.
Political factors:
Recent legislation on equal pay could impact GA Pensions’ reward strategy. The Equality Act of 2010 reinforced the need for equal pay for equal work regardless of gender (Supervisor & Malla, 2018). This means GA Pensions needs to ensure pay levels are objectively justified and there are no unexplained gender pay gaps. This could increase pay transparency and lead to adjustments in some roles to align with market rates.
Economic factors:
Fluctuations in the economy may influence reward decisions. During economic growth, organisations may have more flexibility to offer higher pay raises and bonuses to attract and retain talent (Tatenda & Moment, 2014).). In a recession, budgets are tighter so rewards may be limited to core benefits with a focus on non-monetary recognition. GA Pensions will need strategic reward packages that are sustainable through different economic cycles.
Social factors:
Changing social and family dynamics impact the reward environment as evidenced by Tomlin et al (2017). Younger generations increasingly value flexible working to balance career and personal life. Offering flexibility allows GA Pensions to attract and engage younger employees by catering to this social trend. It helps portray the company as family-friendly and modern in its employment practices. However, flexibility must be applied judiciously to avoid accusations of favoritism. a holistic consideration of the political, economic and social landscape through a PESTEL lens can help GA Pensions design reward strategies that are socially responsible, compliant with legal requirements, and responsive to macro-trends, thus strengthening their employer value proposition over the long run.
Evaluate the most appropriate ways in which benchmarking data can be gathered and measured to develop insight. (AC 2.2)
Short references should be added into your narrative below. Please remember to only list your long references in the reference box provided at the end of this section.Word count: Approximately 400 words
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(Solution) (AC4.1) Assess suitable types of contractual arrangements dependent on specific workforce need
Solution Permanent, full-time contracts Permanent, full-time contracts for delivery drivers offer both benefits and drawbacks, making their suitability dependent on ParcelCare’s operational needs and goals. Pros Permanent, full-time contracts provide job security and consistent income for delivery drivers, enhancing employee satisfaction and loyalty. This stability can lead to higher motivation and productivity, reducing turnover rates and the associated costs of recruitment and training as evidenced by Personio (2023). Full-time contracts also facilitate better workforce planning, ensuring ParcelCare has reliable staffing to meet delivery demands. Cons However, these contracts can be less flexible and more costly for the company. Full-time employees typically require benefits such as health insurance, paid leave, and retirement plans, increasing operational expenses. Additionally, the rigidity of permanent contracts may not align with fluctuating delivery volumes, leading to inefficiencies during low-demand periods. Suitability For ParcelCare, full-time contracts can be suitable if delivery volumes are consistently high, ensuring a stable workforce. However, a mixed model that includes part-time or flexible contracts might offer the necessary flexibility to adapt to changing demands while controlling costs. Part-Time Contracts Part-time contracts offer flexibility for delivery drivers, allowing them to balance work with other commitments. Drivers benefit from a stable income, albeit at reduced hours, while ParcelCare can adjust staffing levels according to demand. A significant advantage of part-time contracts is reduced costs associated with employee benefits, as part-time workers may not qualify for full benefits packages (Abogados, 2019). However, part-time drivers may lack the same commitment or availability as full-time employees, potentially impacting reliability and consistency. Zero-Hours Contracts Zero-hours contracts provide maximum flexibility, allowing ParcelCare to scale staffing up or down based on delivery demand without a fixed commitment to provide hours (CIPD, 2023c). For drivers, these contracts offer freedom to accept or decline work, appealing to those seeking flexibility. However, they also result in income uncertainty and lack of guaranteed hours, which can be challenging for drivers seeking stability. For ParcelCare, zero-hours contracts minimise costs during low-demand periods but may lead to difficulties in maintaining a loyal and consistent workforce due to potential driver dissatisfaction. Part-time contracts are most suitable for ParcelCare’s delivery drivers. They offer a stable income and consistent work schedule, which can enhance job satisfaction and reliability while allowing ParcelCare to adjust staffing levels as needed. This balance supports both operational needs and employee stability. Please click the following icon to access this assessment in full