(Solution) CIPD Question 1: Components of Reward Strategy; Vertically align with organisation strategy and horizontal with other people practices within an organisation

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1.0 Question 1: Components of Reward Strategy; Vertically align with organisation strategy and horizontal with other people practices within an organisation
1.1 Introduction
The vertical alignment is identified as a strong linkage required between the overall vision of the organisation which is held in the minds of senior executives. This is also aligned in the aims, objectives and underlying philosophy of organisation strategy of people management (Munkholm & Rubin, 2020). Conversely, horizontal is noted as achieving coherence and consistent strategy in management of people permeating the overall activities of the HR function and organisational functional areas (DPG, 2019). In rewards strategy, vertical integration include alignment of employees reward approaches with corporate goals. This is with horizontal integration aligning them to the broader people policies (CIPD, 2023). Hence, in this section, a discussion on components of a reward strategy is provided with an evaluation of vertical alignment with organisation strategy and horizontally with people practices.
1.2 Component 1- Salary in form of Cash Rewards
This is a component of a reward strategy which include a form of payment accepted by majority of the employees. The cash rewards can be in the form of base salary or fixed salary for every role or performance-linked incentives provided in a short and long-term plans. For success in the salary provision a pay structure is developed. According to CIPD (2023a), pay structure include a collection of wage grades, levels or bands linked with related jobs in different hierarchies or series. This represent a framework for implementing reward approaches and policies. According to CIPD (2023a), the span of every grade represent percentage difference of the minimum and maximum salary in the range. For instances, when salary range in the span of £30,000 to £37,000 with grand spanning at 20%. The broader the level of span, the greater the progression potential. The examples of these include individual pay rates, spot rates and spot salaries, individual pay, job and salary ranges. Also, the salaries include narrow-graded pay structure, pay spines, broadbanding, job families and local pay structures.
Align vertically with organisation strategy– For the salary component of reward, Cornelius du Preez and Folinas (2019) note that it is supposed to be in alignment with organisation mission, vision, purpose, culture and business strategy by encouraging the required behaviours and performance. For example, in an organisation such as Saudi Aramco, their strategy include sustainability, digital, industrial, manufacturing and social innovation. To achieve this strategy, the organisation offers competitive pay including upto $30,000 annually in HR specialists to $149,970 annually for management consultants. The pay is provided to ensure Saudi Aramco achieves their short and long-term strategy.
Align horizontally with organisation with other people practice(s)– The cash rewards horizontal alignment is evidenced by employees resourcing strategy. Also, the need for employees retention is impacted by compensation provided. According to Qiu and Sojourner (2023), when the demand is higher than supply, compensation is similarly higher. As part of resourcing in Saudi Aramco case, there is no employees who would be interested with leaving an organisation with pay below the industry standards. Further, through job evaluation, Saudi Aramco is in a position of establishing the wages and salary grades for entire jobs.
1.3 Component 2- Work-Life Balance
Work-life balance as a reward component entail the entire support offered by the employees including flexitime, job-sharing, transition from full-time to part-time working, compressed work hours, home-working, term-time only working and paid leave for caring for dependants in emergency care. According to CIPD (2018), work-life balance are found enabling the employees in appropriately judging the interface of work and extra-working demands. Hence, through an implementation of a successful work-life balance, it becomes possible supporting the employees job autonomy and enhancement of their perceptions of the management supportive level as opposed to by reduction of job demands. This is supported by CIPD (2018) report which found that owing to lack of flexibility, millions of new career paths are being pursued.
Align vertically with organisation strategy– The vertical alignment with organisation strategy is evidenced by the increased productivity remotely and an appropriate gain of creation of an appropriate balance of work becoming tangible. For instance, Forbes (2022) report argue that 53% of the employees have a higher likelihood of prioritising on their health and wellbeing over their assigned roles. This is with 47% having a higher likelihood of prioritising on their families and personal lives.
Further, for Saudi Aramco to achieve their strategy for achieving sustainability, the organisation ensure that they thrive in the long-term and maintain the position as world’s largest integrated energy and chemicals organisations in the entire global energy transition (Saudi Aramco, 2023). Particularly, in early 2023, Saudi Aramco introduced application of monitoring, artificial intelligence and different tools for aligning business result with individual goals specifically those which enhance their wellbeing levels.
Align horizontally with organisation with other people practice(s)– Considering Saudi Aramco operations, through an investment in work-life balance, they are in a position of enhancing embracing of remote working and career growth. This has particularly been the case in their social innovation strategy. As evidenced in Saudi Aramco (2023) this entail support of intellectual, creativity and economic development of all employees. To ensure alignment with people practices, Saudi Aramco ensure there is an environment which is conducive for the employees achievement of work-life balance and career growth. The outcome of this is a significant increase in their morale and also an increased job satisfaction. In affirming this, a report published in CIPD (2022) hypothesised that an implementation of flexible scheduling/work location as part of an organisation strategy increase the likelihood of its achievement/productivity. The outcome of this is achieving a 40% increase in strategies implementation and another 65% greater capacity for focusing compared to employees lacking flexibility.
1.4 Conclusion
In this report, different components of a reward strategy have been identified. These include salary pay and also the work-life balance. These components have been evaluated in detail with their alignment vertically with organisation strategy reviewed. Also, an evaluation of horizontal alignment with the other people practices within the organisation has been established. For rewards, the different components existing ensure the organisation success in their business environment. By providing examples from Saudi Arabia context, their strategies including sustainability, digital industrial, manufacturing and social innovation are aligned with the identified rewards. Also, the different people practice roles including resourcing, induction and retention have been evaluated to establish the relationship.
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1.0 Introduction
1.1 ADNOC Organisation Background
In this report, the organisation of focus is Abu Dhabi National Oil Company (ADNOC). This is for understanding the impact of contract terms and conditions on distribution of risk and power with their suppliers. This is an organisation which began its operation in 1971 and today is ranked as the leader in diversified energy group which is owned by Abu Dhabi Government (ADNOC, 2022). The organisation network of holistically integrated business has based their operations across the entire energy value chain assisting their capacity for meeting overall demands of the consistently changing energy markets. For remaining competitive, the organisation has allocated $15 billion for advancing and accelerating lower-carbon solutions, investment in new energy solutions and decarbonisation technologies for lowering their carbon intensity with 25% by 2030 and successfully facilitating their NetZero by 2050 target. The company has a network of fully operational companies that operate throughout the entire hydrocarbon value chain, handling tasks including exploration, production, processing, storing, refinement, and supply in addition to manufacturing a wide range of petrochemical products. I work as a Contract Engineer for ADNOC Offshore, one of the company's divisions. The offshore division of ADNOC is responsible for the delivery and development of oil and gas resources in the waters surrounding Abu Dhabi. With OPEX and CAPEX, ADNOC Offshore spends over 3,000 million dollars annually. The organisation structure is as illustrated in figure 1; Figure 1: ADNOC Organisation Structure1.2 Identified Category Management
The deployment of the iSourcing system, a technology-focused procurement procedure, was chosen as the category management in this study. The need for oil and gas has significantly expanded in the modern era since the Covid-19 epidemic. As a result, ADNOC is forced to spend money on equipment to help them process and refine more oil and gas products. In light of this, the team leader's responsibility is to see that an iSourcing system is in place and can be utilised to purchase the new machines that the company needs to upgrade its operations. Locally in UAE, regionally in the Middle East, and internationally in Western nations, this would apply. This project aims to produce a report outlining the implementation of the change approach. This is done while ensuring the team members and leader have the necessary abilities to carry out the plan successfully. Implementing the new category management strategy is the kind of change being sought. The learner will be the team leader throughout the full category management process since a team has been chosen to oversee the deployment of iSourcing. The practical approach would be utilising various tools and strategies that demonstrate leadership and best practices in change management, along with a focus on the category management data from the ADNOC firm.2.0 Change Management Approach
2.1 Introduction of the Required Change Process
In its Procurement Supply and Management (PS&M) budget, ADNOC had allocated roughly 10 million UAEis before the COVID-19 epidemic. Up to 5,000 domestic and foreign providers are currently utilised in this. Because of the significant financial allocation in PS&M, the ADNOC sourcing method is crucial to their operations in this scenario. Logistics, equipment, and facility administration are all purchased separately by the organisation, all of which fall under the organisation's primary spending categories of computers and technical systems. As a result, they lack a centralised system that would allow all departments to be involved in aiding the procurement procedure (CIPS, 2020). The Burke-Litwin Model (Coruzzi, 2020) can pinpoint the internal and external factors that contributed to the identified change. This model ranks the many change drivers according to their importance and provides evidence of each one in figure 2; Figure 2:Drivers of Change Model When taking into account the ADNOC organisation and indicated change, these elements have the following effects, as stated in Table 1: Table 1:Summary of the Drivers of Change in ADNOC OrganisationFactors of change | Explanation |
External environment | Supply chain networks have been significantly impacted since COVID-19. ADNOC's ability to replenish stock, equipment, and machinery has been affected. Therefore, ADNOC would participate in strategic alliances by including diverse actors and intermediates in the complete value chain through iSourcing |
Individual and oganisational performance | ADNOC's investment in iSourcing would reduce PS&M turnover, everyone's performance, and supply chain network satisfaction. |
Leadership | To ensure iSourcing success, the PS&M will lead and manage efficiently. This inspires and guides other organisations to iSourcing success. |
Mission and strategy | The achievement of ADNOC's aim to provide high-quality oil and gas products would be ensured by the deployment of iSourcing. The justification for this is to quickly and effectively engage highly qualified vendors. |
Organisation culture | Implementing iSourcing would promote the collaborative and teamwork-oriented organisational culture of ADNOC. This is due to the platforms offered by iSourcing that provide suitable options for teamwork and collaboration. |
Task requirements and individual skills | Employees at ADNOC lack the knowledge and skills necessary to deploy iSourcing. This deficit might be filled by offering possibilities for professional advancement. Implementation of the change would be successful. |
Employee motivation | This report's proposal suggests that providing monetary and non-monetary rewards is necessary to encourage people to adopt iSourcing. This is for employing remarkably contemporary systems of practice. |