5HR03 ASSIGNMENT EXAMPLE

An analysis of a case

Leia Technologies was established in 2017 and currently employs 75 people. The company recently launched its new app “Money4Future,” which offers saving and investment products such as Lifetime ISAs, pensions, and savings accounts.

Following a hectic start-up period, the company’s HR team is now in a position to reflect on its reward strategies and policies. They recognize that due to the company’s growth and the number of new people on the HR team, there are some gaps in knowledge about Reward for Performance and Contribution.

As a senior member of the HR Team, you have been asked by a colleague to provide insight into the impact of reward approaches and packages, how benchmarking data can inform reward approaches and the role of people professionals in assisting line managers.

Your manager has asked you to create a guidance document to be distributed to your colleagues as well as a blog article for the HR Team’s online news page.

Task preparation:

• To guide and support your evidence, refer to the unit’s indicative content.
• Remember that you are working in the People Practice Team for this task, so pay attention to how your evidence is presented.
• Make certain that the evidence gathered for this assessment is your own.

In addition, you will be able to:

• Consider your own experiences with learning opportunities, training, and ongoing professional development.
• Reading CIPD Insight, Fact Sheets, and other related online content on these topics.
• Academic concepts, theories, and professional practice should be related to the assessment task(s) in a critical and informed manner, with references to key texts, articles, and other publications.

Keep these things in mind:

• Fill out the front cover sheet, sign with a “wet signature,” and tape it to the front of your assessment.
• Use the bullet points below each task as headings and sub-headings so your marker knows where to start your answer.

Guidance document – Task One

You have been asked by a colleague to provide insight into the impact of various reward approaches and packages. They also want to know how benchmarking data can be used to inform reward strategies.

Create a guidance document that covers these two areas, as well as current models and thinking on the subject. You might want to divide the guidance document into the following sections:

Section 1 – The Impact of Reward Approaches and Packages

• Evaluate the principles of reward and their importance to organisational culture and performance management. (AC 1.1)
• Explain how policy initiatives and practices are put into action (AC 1.2)
• Explain how the approach to reward can be influenced by people and organizational performance. (AC 1.3)
• Compare the various types of benefits provided by organizations and the advantages of each. (AC 1.4)
• Examine the role of extrinsic and intrinsic rewards in increasing employee contribution and sustaining organizational performance. (AC 1.5)

Section 2 – Benchmarking Data to Inform Reward Approaches

• Examine the reward environment’s business context (AC 2.1)
• Examine the most appropriate methods for gathering and measuring benchmarking data to develop insight. (AC 2.2)
• Create insight-driven organizational reward packages and approaches. (AC 2.3)
• Describe the legislative requirements that influence reward practice. (AC 2.4)

Blog article – Task Two

TIn addition to the guidance document, your manager has asked you to write a blog post for the HR Team’s online news page. The title of the article should be “Supporting Line Managers in Making Reward Decisions – The Role of People Professionals.”

It should be aimed at people who need information and guidance and should cover the following topics:

• Examine various approaches to performance management. (AC 3.1)
• Examine the role of people practice in assisting line managers in making consistent and appropriate reward decisions. (AC 3.2)
• Explain how line managers make reward decisions based on organizational reward approaches. (AC 3.3)

The most important aspect of this article is that it covers the topics listed above. While you should consider your intended audience (your internal team), you could also research what makes a good blog post and incorporate those elements into your article.

Note: Your article should include research and citations.

SOLUTION: TASK ONE

AC 1.1 Evaluate the principles of reward and its importance to organisational culture and performance management

The principles of reward are broad statements that determine how company employees should be rewarded for meeting or exceeding their targets (Declan, n.d.). The principles guide businesses in rewarding their employees fairly and consistently.

The total reward approach is a reward principle that is designed and implemented by organizations through the provision of monetary, in-kind, and development of rewards to employees who achieve specified organizational goals. In this context, rewards are aligned with organizational culture and context, as well as relative to the external market environment (Almarwan, 2019). The primary goal of the total reward approach is to strike a balance between employee and organizational needs. As a result, this principle assists the organization in striking a balance between offering competitive wages and attracting and retaining talented employees (Almarwan, 2019).

Another reward principle is fairness. According to Ceplenski (2013), research shows that employees perceive fairness and equitable treatment as key drivers of engagement, performance, and retention. According to White (2021), fairness in company reward systems leads to increased positive emotions and attitudes among employees, and thus more behavioural alignment with company values. In contrast, unfair treatment is perceived to be corrosive and is bound to have devastating effects on the organization, such as hostility, distrust, absenteeism, high turnover, and diminished willingness of employees to assist each other in the delivery of core company objectives. To achieve fairness in the employee reward system, businesses should define behaviours and the perceived reward value, promote consistency, develop a price, communicate clearly, and use a reward and recognition platform (White 2021).

In addition, there is the principle of intrinsic and extrinsic rewards. Intrinsic rewards are based on the idea that intrinsic motivation occurs within individuals, and thus the most powerful rewards are drawn from within. As a result, some organizations offer intrinsic rewards such as professional development, personal achievement, a sense of accomplishment, and pleasure. Extrinsic rewards, on the other hand, are tangible rewards that can be financial, such as bonuses and salaries, or simple gestures such as public awards, verbal praise, better office, and increased responsibility (Manzoor, Wei & Asif, 2021). Such incentives are important for organizational performance because they boost employee motivation and engagement, which in turn boosts employee performance.

AC 1.2 Explain how policy initiatives and practices are implemented

Organizational reward policies and initiatives must be founded on the principles of fairness, equity, and consistency. Fairness is defined as just and impartial behaviour or treatment that is devoid of discrimination or favour. Similarly, equity refers to the absence of favouritism or bias, whereas consistency refers to the degree to which policies are consistent and similar throughout the organizational structure.

Organizational reward policies and practices face the common challenge of demonstrating external competitiveness while maintaining internal quality. According to Greene (2018), basing pay solely on pay will inevitably increase the organization’s budget. As a result, external competitiveness and internal equity in company rewards are frequently at odds. A hospital, for example, that offers non-competitive salaries to programmers is less likely to attract and retain high-quality talent, and as a result, to provide quality, it may be forced to outsource the service at a cost because it cannot wish away the market realities (Green, 2018). One way to incorporate external market competitiveness while maintaining internal quality is to develop pay ranges for each discipline that are aligned with market pay levels, as well as to establish control points that are regularly reviewed based on a company’s financial growth.

Communication of the outcome and impact of the reward policies is required for implementation. Assimilation policies guide where jobs should be allocated in the structure and how to deal with those who are ‘green circled’ or below the minimum for their new grade. Furthermore, it is necessary to specify how those who have been “red-circled” or have paid more than the upper limit of their new grade will be determined (protection policy) (Armstrong, 2007). Before implementation, management must agree on the protection and assimilation policies.

Line managers play an important role in the administration of rewards, and reward policies must reflect this. As a result, it is a policy decision to determine how much responsibility for rewards should be devolved to line managers (Armstrong, 2007). To improve implementation, reward policy guidelines should be followed, and line managers should make consistent decisions across the organization. To that end, line managers may need to be trained to improve their ability to make reward decisions (Armstrong, 2007).

AC 1.3 Explain how people and organisational performance can impact the approach to reward.

People are an organization’s most valuable asset because they drive the achievement of the company’s objectives and goals. Human resources must be obtained to oversee the operations of a company, regardless of whether it provides goods or services. A company’s reward strategy is determined by a variety of factors, including the type of people employed, such as the growing demand for “knowledge workers” (Armstrong, 2007). In line with this, people make a difference in a company and thus serve as a competitive advantage in the business world, and as such, the reward system can be tailored to attract and retain highly talented employees. Similarly, (Bakshi, 2019) stated that organizations that provide the most incentives to employees are seen as more successful because they can attract and retain high-performing employees. Furthermore, proper rewards are linked to a reduction in absences, which is a perennial headache for managers (Bakshi, 2019).

People are linked to organizational performance because they effectively offer their knowledge and skills to a company for it to succeed and thus gain the previously mentioned competitive advantage. Organizational performance has an impact on the reward approach because the best performers in a company are more likely to leave for better pay and prospects. In the same way, a company’s reward strategy can harm employee performance. A good reward strategy, on the other hand, can encourage employees to gain the necessary knowledge to help the organization increase and grow in terms of performance (Bakshi, 2019). Armstrong (2007) stated succinctly that people deliver on organizational performance, implying the need for a reward strategy that motivates and retains people with unique capabilities. Furthermore, managers must understand employee perceptions of importance and fairness and link them to the reward strategy that people use when they are confident that they will be fairly recognized for their exceptional performance.

AC 1.4 Compare the different types of benefits offered by organisations and the merits of each.

Employee benefits, according to Verlinden (2019), cover the indirect pay provided to an organization’s workforce. Employee benefits include a variety of options such as performance-based pay, insurance coverage, share ownership, bonus schemes, commission schemes, and profit sharing, among others. Verlinden (2019) classified benefits into four categories: work benefits, financial security benefits, health benefits, and lifestyle benefits. Workplace benefits can include access to employee clubs, skill development, flexible working hours and leave, activities and gifts, and food and beverage. They have several advantages, including increased employee morale, engagement, and productivity, as well as increased employee commitment to the organization. However, some employee benefits, such as skill development, are costly and time-consuming, requiring production employees to be absent on days when the organization’s performance suffers.

As a result, the benefits for health and wellness vary depending on the organization but may include psychological support sessions, physiotherapy, chiropractic sessions, and fertility treatments (Verlinden, 2019). In explaining the significance of health benefits, Reddy stated that some of the benefits include the fact that health is wealth and that it encourages employees to regularly attend health check-ups. The disadvantage is that it is difficult to keep or switch.

Employees can also receive financial security benefits such as pension plans, insurance, bonuses, commissions, and the option to purchase stock in the company for which they work (Verlinden, 2019). The benefits of this are that it aids in resourcing and talent management by attracting new talent from competitors, increases workforce dedication, and is also beneficial to employee well-being (Belcher, n.d.). The disadvantage is that the financial implications may put a strain on the company, and it is difficult to keep everyone happy in a company.

The final category is lifestyle benefits, which include work-life balance benefits such as child care, legal services, and grocery delivery, as well as mobility benefits that make employees’ lives easier (Verlinden, 2019). Employees can thus work from home or elsewhere and are not required to come into the office regularly. According to Harness (2019), lifestyle benefits make employees feel valued, motivated and dedicated to the company, which reduces turnover. The disadvantage of this is that it necessitates additional administrative costs such as the purchase of company laptops to enable working from home as well as the purchase of online platforms that facilitate working from home such as holding zoom meetings.

AC 1.5 Assess the contribution of extrinsic and intrinsic rewards to improving employee contribution and sustained organisational performance.

According to Armstrong (2007), employers provide extrinsic rewards in the form of pay and benefits, as well as non-financial rewards such as recognition, feedback, and praise (Armstrong, 2007). According to Thomas (2009), extrinsic rewards are mostly financial, external to the work itself, and controlled by other people. They are also measurable and quantifiable.

Munir, Lodhi, Sabir, and Khan (2016) discovered a statistically significant relationship between extrinsic rewards and employee motivation and satisfaction. To that end, they recommend that organizations implement an effective extrinsic rewards system that is aligned with productivity to retain high performers. Furthermore, Munir et al. (2016) stated that when employees’ basic pay needs are met, their motivation levels rise, and their job performance improves. In contrast, Hajduk (2017) argued that money can be a demotivator for employees who believe they are being paid unfairly, reducing their contribution to organizational performance.

Intrinsic rewards are non-monetary and are related to workplace achievement and responsibility. In an organization, non-monetary rewards include job design and role development (meaningful work, autonomy, opportunities to use and develop skills), quality of working life, opportunities to achieve and develop, and work-life balance (Armstrong, 2007). According to Thomas (2009), intrinsic rewards are psychological because they are drawn from within and thus are controlled from within.

According to Munir et al. (2016), aspects such as praise and recognition are effective intrinsic rewards that increase employee motivation to perform. Employees are motivated to contribute to organizational performance because they enjoy completing tasks successfully, receiving recognition for completing a challenge and being treated with care and consideration. This corresponds to job satisfaction, autonomy, and psychological fulfilment at work (Munir et al, 2016, pg.95). According to Hajduk (2017), the intrinsic reward model can only be achieved after providing basic pay and benefits that inspire employees to excel in their roles and thus focus on pursuing their path of development to make a positive impact on the organization. As a result, employees’ purpose is aligned with the organizational purpose, which improves performance.

Section 2 – Benchmarking Data to Inform Reward Approaches

AC 2.1 Assess the business context of the reward environment.

An organization’s reward system is heavily influenced by both internal and external business contexts. According to Armstrong (2007), a company’s business strategy also determined its reward strategy. Internally, employee perspectives shape a company’s ward environment. As a result, their expectations, aspirations, and needs as an organization’s stakeholders should be considered in the development of new reward processes such as performance management, job evaluation, and contingent pay (Armstrong, 2007).

As a result, the external environment, such as globalization, increased competition, and labour relations, influences reward policies and practices. Traditionally, for example, globalization of ideas and people has tended to focus on elite expatriate workers sourced from global company headquarters and rewarded in isolation in the local country where they are placed. Nonetheless, this has shifted over time as the emphasis has shifted to global corporations embracing diversity and employing local talent in their overseas branches (Armstrong, 2007).

Employment trends show that there is a growing demand for qualifications and skills, particularly for professional and managerial workers, customer service representatives, skilled manual workers, and knowledge workers. This influences the compensation strategies used by businesses to attract and retain such professionals (Armstrong, 2007).

Furthermore, market pay rates influence company reward strategies. To gain a competitive advantage, pay rates and pay reviews in the company must be outstanding (Armstrong, 2007). The legislation also has an impact on the reward environment of businesses. For example, in the United Kingdom, some of the legislations that directly or indirectly affect pay practices and policies include the 1998 National Minimum Wage Act, the Employment Equality (Age) Regulations 2006, and the Data Protection Act 1998, to name a few.

Another business context that influences reward practices is the industrial relations scene. In this regard, trade unions are involved in negotiations for national pay, top executive pronouncements, and exerting pressure on both public and private organizations to achieve equal pay. 2007 (Armstrong)

AC 2.2 Evaluate the most appropriate ways in which benchmarking data can be gathered and measured to develop insight.

According to Fallon (2021), the benchmarking process entails using key metrics to evaluate the current state of a business and then determining where you want to be through the development of an action plan to achieve and measure the set goals. Every industry has established standards that are recognized as best practices, and businesses can determine if they are meeting the standards by benchmarking.

Benchmarking is classified into three types: internal benchmarking, which improves the business by comparing it to historical company data, comparing organizational departments, and comparing branch data. There is also competitive benchmarking, which entails setting specific goals based on what your competitors in your industry are doing. They have an impact on things like employee salaries. Third, strategic benchmarking seeks to replicate specific performance standards (Fallon, 2021). Benchmarking data can be obtained in a variety of ways, including the following.

• When compared to paper publications, online payment data is less expensive and faster to access. It assists users in extrapolating salary figures for various positions and adjusting them based on company size and business conditions. Online pay data can also be downloaded from HR systems and analyzed offline using spreadsheets in Excel.
• Data can also be collected through generally published surveys obtained from providers such as Croner Reward and Pricewaterhouse Coopers. Such surveys collect information on various occupations, particularly professional and managerial jobs, and expound on factors such as starting salaries, employee turnover, and the industry sector. This allows for continuity, broad coverage, and the analysis of trends over time.
• Data can also be obtained from management consultant databases and is based on thoroughly researched and matched information. This can provide useful information on general salary levels for professional staff and managers, which can then be matched and contextualized.
• Data can also be gathered through occupational surveys, which are initiated by professional institutions and provide relevant information such as pay rates for IT staff, HR specialists, accountants, and salespeople. They contain important information about pay concerning qualification, age, and membership.

(Adapted from Armstrong, 2007)

AC 2.3 Develop organisational reward packages and approaches based on insight.

Benchmarking data can be used to create a suitable reward package for a company. According to Armstrong (2007), this can be accomplished through grade and pay structures that provide a designed framework within which to implement an organizational reward package. Grade and pay structures assist organizations in determining job hierarchy, defining pay levels, and determining pay progression opportunities. A grade structure is a set of bands, levels, or structures into which job categories are broadly compared. Narrow-graded structures, job family structures, and broad-banded structures are some of the graded structures that an organization can use. Pay structures then define the number of grades and the width or span of the pay range between the grades (Armstrong, 2007).

The development of a reward package can be accomplished through job evaluation schemes, which involve using a systematic process to assess the relative value of a job in comparison to other roles in a company (Price, 2020). There are two main approaches to job evaluation. The non-analytic approach allows all jobs to be compared when ranking them; the analytical approach is based on breaking down entire jobs into defined actors such as communication, scope, and knowledge, as well as levels (1,2,3) (Price, 2020). The analytical approach has several advantages, including the ability to maintain a fair pay system, promote transparency, and ensure that reward packages are externally competitive.

The evaluation of market rates or market pricing is another method for developing an appropriate reward package. According to Cipd (2021), market pricing is a method of gathering data on pay rates for similar jobs to establish the market and thus set an appropriate rate for company employees. The organization should be guided toward implementing a pay policy that is positioned at the median level for market rates in the locality, occupation, or sector.

AC 2.4 Explain the legislative requirements that impact reward practice.

In the United Kingdom, several legal frameworks influence employers’ reward practices. This is echoed by Cipd (2021), which states that UK employers must follow legal procedures in all of their reward policies. For example, the National Minimum Wage, equal pay, gender pay gap reporting, and chief executive pay rationing (Cipd, 2021). The National Minimum Wage applies to all employees aged 16 and up, while the National Living Wage applies to all employees aged 25 and up. The national minimum wage increases on an annual basis, and employers must comply regardless of size.

There is also the Equal Pay and Equality Act of 2010, which states that organizations must be free of bias and thus treat men and women equally in terms of employment contracts, particularly when performing similar work, when their work is rated as equivalent in a job evaluation study, and when work is found to have an equivalent value in terms of skill, effort, and decision making (People point HR, 2017).

When determining senior employee compensation, organizations must also consider certain legal requirements, such as the chief executive pay ratio. For example, beginning in January 2020, large publicly traded UK companies must publish and explain their CEO pay ratios. To that end, Cipd (2021) noted that CEO remuneration would be reduced slightly in 2021. The UK laws also require that all employers provide certain workplace benefits to their employees, such as paid leave or enrollment in a pension scheme for those who are eligible (Cipd, 2021).

Reference

1. Almarwan, M. (2019). Evaluate the principle of total rewards and its importance to reward strategy. [online] www.linkedin.com. Available at: https://www.linkedin.com/pulse/evaluate-principle-total-rewards-its-importance-marwan/.
2. Armstrong, M. (2007). A Handbook of Employee Reward Management And Practice. 2nd ed. London and Philadephia: Kogan Page.
3. Bakshi, A. (2019). Employee Rewards: Introduction, Aims, Types and Purpose. [online] Essays, Research Papers and Articles on Business Management. Available at: https://www.businessmanagementideas.com/employee-management/employee-rewards/20147.
4. Belcher, L.M. (n.d.). Advantages & Disadvantages of Benefit Plans for Employees. [online] Small Business – Chron.com. Available at: https://smallbusiness.chron.com/advantages-disadvantages-benefit-plans-employees-36667.html.
5. Ceplenski, C. (2013). Employee Rewards: The Importance of Perceived Fairness. [online] HR Daily Advisor. Available at: https://hrdailyadvisor.blr.com/2013/06/29/employee-rewards-the-importance-of-perceived-fairness/.
6. Cipd (2021a). Job Evaluation & Market Pricing | Factsheets. [online] CIPD. Available at: https://www.cipd.co.uk/knowledge/strategy/reward/market-pricing-factsheet#gref.
7. Cipd (2021b). Reward | Factsheets. [online] CIPD. Available at: https://www.cipd.co.uk/knowledge/fundamentals/people/pay/reward-factsheet#7546.
8. Declan, A.M. (n.d.). Reward Strategy and Principles. [online] Al Massar Declan. Available at: https://almassardeclan.com/reward-strategy-and-principles/.
9. Fallon, N. (2021). The Benefits of Benchmarking in Business Operations – businessnewsdaily.com. [online] Business News Daily. Available at: https://www.businessnewsdaily.com/15960-benchmarking-benefits-small-business.html.
10. Green, R. (2018). Internal Equity or External Competitiveness: Can You Have Both? [online] www.linkedin.com. Available at: https://www.linkedin.com/pulse/internal-equity-external-competitiveness-can-you-have-robert-greene/.
11. Hajduk, P. (2017). What’s the real value of reward? [online] People Management. Available at: https://www.peoplemanagement.co.uk/voices/comment/real-value-reward#gref.
12. Harness, J. (2019). The Advantages of Discretionary Employee Benefits. [online] Bizfluent. Available at: https://bizfluent.com/info-10004508-advantages-discretionary-employee-benefits.html.
13. Manzoor, F., Wei, L. and Asif, M. (2021). Intrinsic Rewards and Employee’s Performance With the Mediating Mechanism of Employee’s Motivation. Frontiers in Psychology, [online] 12. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8319625/.
14. Munir, R., Lodhi, M.E., Sabir, H.M. and Khan, N. (2016). Impact of Rewards (Intrinsic and Extrinsic) on Employee Performance with Special Reference to Courier Companies of Faisalabad City. European Journal of Business and Management, [online] 8(25), pp.88–98. Available at: www.iiste.org [Accessed 22 Mar. 2022].
15. PeoplePointHR. (2017). Pay and reward covers all benefits an employer offers its employees. [online] Available at: https://peoplepointhr.co.uk/hr-solutions/pay-reward-management/.
16. Price, J. (2020). The 5 key benefits of job evaluation. [online] Paydata. Available at: https://www.paydata.co.uk/hr-hub/blogs/job-evaluation/the-5-key-benefits-of-job-evaluation/.
17. Reddy, C. (2016). What are Employee Benefits? Advantages and Disadvantages – WiseStep. [online] WiseStep. Available at: https://content.wisestep.com/advantages-disadvantages-employee-benefits/.
18. Verlinden, N. (2019). 12 Types of Employee Benefits to Implement at Your Organization. [online] AIHR. Available at: https://www.aihr.com/blog/types-of-employee-benefits/.
19. White, R. (2021). Achieve Fairness in Reward Management With These 5 Steps. [online] www.incentivesmart.com. Available at: https://www.incentivesmart.com/blog/achieve-fairness-in-reward-management.

TASK 2: SOLUTION

Introduction

Line managers are at the heart of organizational management activities because they supervise the activities of employees who do not have supervisory responsibilities and make up the majority of employees in a typical company. Their role is critical because they are the direct link between employees and management. To that end, they are the first to identify individual employee behaviour, motivation, and ability to flawlessly execute their mandate. However, Cipd believes that there is an evolving relationship between line managers and people professionals in that, while HR, L&D, or OD specialists are involved in the design of people management practice, line managers are the first to communicate and process their decisions to employees. As a result, there is a need to defuse the tension between the HR function and line managers, and then seek to complement each other in the quest to improve organizational performance. As such, this article will attempt to identify how people professionals can assist line managers in more precisely executing HR functions in making reward decisions.

Examine various approaches to performance management. (AC 3.1)

According to the CIPD, a professional body for human resource management, “if people are the greatest creators of value in organizations, then good performance management is critical for an organization’s success.” This raises the question of what exactly performance management is. Simply put, it is an effort to maximize value creation while also ensuring that employees contribute to the achievement of business objectives. While there is no universal definition, performance management is frequently described in terms of three major activities: the establishment of objectives through which employees can see their respective roles in the organization’s mission and strategy, improved performance of employees and the organization, and holding employees accountable for their performance by linking it to rewards, promotions, or termination.

Different approaches to performance management are used by modern businesses. For example, Google has been recognized as the most progressive human resource company because it has successfully integrated both traditional approaches and current trends in performance management. Google uses annual performance reviews with a mid-year evaluation of progress made, monthly performance check-ins that focus on coaching, personal issues, career development, and other issues, an annual “Upward Feed Back Survey” that is equivalent to 360-degree feedback, and Objectives and Key Results (OKRs), which is slightly different from Management by Objective Setting. Another company that is revolutionizing performance management approaches is IBM, which developed a performance review system called “Checkpoint” that assists employees in setting short-term goals and receiving management feedback every quarter. Another good example is Facebook, which uses peer-to-peer feedback to determine how well teams are performing and to understand when collaboration is taking place. The company also employs internal software that provides consistent and real-time feedback and assists employees in resolving issues before they become problems.

Examine the role of people practice in assisting line managers in making consistent and appropriate reward decisions. (AC 3.2)

People professionals are indispensable in performance management because they strengthen the link between organizational and employee objectives, provide feedback to motivate employees, and hold them accountable for their actions. People professionals must assist line managers in carrying out tactical human resource functions while being aware that they lack the necessary knowledge and skills. In light of this, the primary role should be training and development, to prepare line managers to take on leadership roles in HR functions such as conducting fair performance appraisals of the employees they lead.

Ruth Mayhew stated in an article focusing on why HR and line managers should collaborate that some of the topics that HR should impart to line managers include how to provide employees with constructive feedback, how to conduct unbiased and fair evaluations of employee performance, and how to provide both financial and non-financial rewards to employees based on evidence as data to avoid complaints of favouritism. People professionals should train line managers in the collection and maintenance of performance data, which can then be used in the rewarding process. The learning objectives should also emphasize the importance of consistency and transparency when managing people, as well as the need to follow organisational policies and thus lead by example. People professionals can also assist the line manager by educating them on the organisational culture, which they should then emulate in their role as leaders to other employees.

Explain how line managers make reward decisions based on organisational reward approaches. (AC 3.3)

Line managers require the necessary tools to reward good performance to effectively deliver in making rewards decisions. Line managers should receive training and development to help them overcome poor judgments in differentiating performance levels or avoid difficult conversations about performance appraisals with underperforming employees. Line managers should capitalise on the increased use of technology in administration and then link it to team performance management.

According to CIPD evidence on effective performance management approaches, line managers play a critical role in evaluating and recognizing the performance of individual employees under their purview. Line managers can use non-monetary rewards, such as symbolic gestures, to motivate employees with potential, as well as provide them with a work-life balance schedule and opportunities for job enrichment, such as travelling to overseas branches or tours to other competing organizations. Line managers should ultimately align their rewarding decisions with organisational policies, values, and beliefs.

In conclusion

This article has demonstrated how performance management affects an employee’s wages and benefits. To that end, organizations were observed to use a variety of performance management approaches, including annual performance appraisals, 360-degree feedback, management by objectives, and technology-based performance software. Different organizations customize the approaches to fit their context and thus reward employees based on their productivity. As a result, the article emphasizes the importance of people professionals assisting line managers in carrying out critical HR functions such as performance appraisals and, more specifically, rewarding through training and development, as well as leading by example in the hope that they replicate this in their mandate. Last but not least, the line manager’s role in rewarding is heavily reliant on having the necessary knowledge, skills, and tools to recognize and reward good performance. Their decisions should be based on evidence, organizational values, and beliefs.

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