Research Topics: Employment Practices

UNEMPLOYMENT

INTRODUCTION   Unemployment rate is said to be eliminated by means of operations of market forces.  In this paper, the use of a macroeconomic model specifically the Investment/Saving equilibrium / Liquidity preference/Money supply equilibrium (IS/LM) model, will be tackled in lieu to the dealings of unemployment.  A brief outline of this paper would provide a brief history of the IS/LM model, an illustration and overview of an IS/LM diagram and how each one operates, and the presentation of the IS/LM dynamics.     MAIN PART   The history of IS/LM model started its roots in the Econometric Conference in 1936, as being pioneered by  , , and  that attempts to summarize major ’s idea in his General Theory of Employment, Interest, and Money. Diagram 1: The IS/LM model                          The IS curve moves to the right, causing higher interest rates and expansion in the “real” economy (real GDP). Accessed at To begin with, it would be appropriate to identify the particular labeling in the graph to better explain the diagram. The horizontal axis (Y) pertains to the gross domestic product (GDP) whereas the vertical axis (R) is representative of interest rate.  Collectively, the graph would comprise the interface between the real GDP (product markets) and the monetary market aspects of an economy.  The IS schedule exhibits a negative slope that is why it is drawn downwardly, wherein it is used to illustrate the equilibrium in the product market, the total spending equaling an economy’s total income output.  An explanation of the exhibited negative slope IS would be an assumption that, an increase in income, the increase of consumption, savings and tax revenues follows.  The occurrence of equilibrium is said to occur due to the fall of the interest rate, thus, if there is an income increase, it necessitates the accompaniment of decline in interest rate.  Contrary to IS, the line LM schedule is exhibits a positive slope and is drawn upwardly as it constitutes monetary and finance roles.  An explanation of the positive slope of LM is the assumption of the rising GDP; the equilibrium causes the interest rate to rise. The point of intersection between the IS and LM schedules will exhibit the short-run equilibrium in the GDP (Y) and interest rate (R) axis. When there is a balance in the product markets and money markets, they are indicative of the occurrence of the IS/LM equilibrium.  Moreover, an illustration of an equilibrium of the IS/LM model is illustrated in diagram 2 found below.   Diagram 2: The Equilibrium of IS/LM model                                      In figure 4.3 of the book : A Study of the (). The nature of economy does not move abruptly when necessary changes is required.  Thus, the IS/LM model moves in dynamic motion or we can call it as the dynamic of adjustment that occurs as a result of adjusting to one equilibrium to another.  The adjustment path where the course of y and i axis turns into draws three assumptions wherein the first two assumptions deals with the adjusting variables to a certain market.  First, assumption holds that rise of income and output implies the excess in the demands for goods and services (presented by the horizontal arrows in diagram 3 found below) wherein, it moves from the right to the left of IS curve and moves from the left to the right of IS.  Second, assumption states that, there is a rise in the interest rate, it is said that there is excess demand in the money market that implies that below the LM curve, there would be an increase in the interest rate while the supply in the money market excess represents the points above the LM curve and necessitates a drop in the interest rate.  It is presented in the vertical arrows of diagram 3.  The last assumption of the dynamics of IS/LM is the adjustment of the interest rate which is faster than the income and output adjustments.  The initial interest rate is too huge to be consistent with the new equilibrium; therefore, the final overshoot target should be corrected through partial reversal of the interest rate movement that would likely be the valuable implication of the third assumption. Diagram 3: Dynamics of IS/LM model                                  In figure 4.4 of the book : A Study of the  ().     CONCLUSIONS               The operating variables under which IS/LM operates may be readily identifiable but its operations indicates the complexities of understanding the whole IS/LM model.  An increase in income, consumption, savings and tax revenues causes the negative slope of IS, whereas the rise of GDP to attain equilibrium, increases the interest rate.  The three assumptions of the dynamics of IS/LM model explains the adjustment process the IS and LM would partake. REFERENCES:     Credit:ivythesis.typepad.com

UNEMPLOYMENT

INTRODUCTION Unemployment rate is said to be eliminated by means of operations of market forces. In this paper, the use of a macroec...

Orientation and Recruitment

1. What are some of the factors that could influence an organization’s choice of selection methods?   The success of a selection system is gauged against criteria. Often, the choice of these criteria is decided by convenience. The attenuation or contamination arising from the use of poor criteria results in a systematic underestimation of the true validity of the selection methods.   Task performance is defined as `the proficiency with which incumbents perform activities that are formally recognised as part of the job; activities that contribute to the organization’s technical core either directly by implementing a part of its technological process, or indirectly by providing it with needed materials or services’. Task performance is likely to be contained in most job descriptions and has, perhaps, been over-emphasized and over-used in developing criteria. Contextual performance is very similar to the concept of organizational citizenship, organizational spontaneity, extra-role behaviour and pro-social organizational behaviour. Contextual performance consists of behaviour that promotes the welfare of individuals or groups, and it includes components such as altruism, courtesy, civic virtue, conscientiousness, making constructive suggestions, protecting the organization, developing oneself and spreading goodwill.   Applicant perceptions play a key role in recruitment since negative views will inhibit some people from putting themselves forward. Furthermore, negative attitudes might affect the motivation, and thus subsequent performance, of applicants, when they take tests or attend interviews. Applicant perceptions might also influence the degree to which they are prepared to give answers that are truthful.   Selection method has four characteristics: job relatedness, an opportunity for the candidate to demonstrate ability, sympathetic interpersonal treatment, questions that are not considered improper.   2. What are the main benefits of employee induction and orientation?   Employee orientation and induction process is one of the key elements of the recruitment and retention process. There are benefits of employee orientation. This includes reducing start-up costs, reducing employee anxiety, reducing employee turnover, saving time for supervisors and co-workers, and developing realistic job expectations, positive attitudes and job satisfaction.   With proper orientation, the employee can speed up to learning process thus reducing the cost associated with training the employee for the job. Also, with orientation, an employee can be introduced to the new situation and environment which would help the employee get acquainted with the environment and helps in knowing the guidelines for proper behavior and conduct thus giving the employee the chance to develop knowledge on the work and the employee would not experience the stress if guessing. Usually, when people are put in a new situation, they develop anxiety that can impede the employee’s ability to do the job. With proper orientation this can be avoided and thus making the employee more effective and efficient on his job.  In addition, with proper orientation, employee turnover would be reduced since with proper orientation, the employee feel valued and put into a position where he or she can do his job. Orientation could give the employee the tools in order to do his job. Also, with an effective orientation, the supervisors and co-worker would likely save time in spending more time in mentoring the newly hired employee. Furthermore, with orientation, the employee can develop an idea of what the company expected of him in his job. This would also result to proper knowledge of the employee on the values and attitudes of the organization. Having known what the company expects and how should the employee act within the company, he can have a positive attitude towards the job and thus gaining job satisfaction. In summary, orientation is a good practice in retaining and motivating employees, lowering turnover, increasing productivity, improving employee morale, facilitating learning, and reducing anxiety. The more time and effort spent in helping new employees feel welcome, the more likely they are to identify with the company and become valuable members of it. Unlike training, which emphasizes the what and how, orientation often stresses the why. It is designed to influence employee attitudes about the work they will be doing and their role in the company. It defines the philosophy behind the company’s rules and provides a framework for job-related tasks. And as plans, policies and procedures change in organizations, even current employees need to be kept up to date and continually reoriented to changing conditions.     3. What is the difference between formal and informal orientation programs?   Formal employee orientation programs are meant to initially educate newly hired workers to a company’s operations, culture, organizational set-up, objectives, plans and tactics. Such programs enable new employees to begin adding value to the firm sooner than if they were to learn about the company as they went along doing their work. For a formal orientation program, cooperation between line management and staff is essential. The human resource department ordinarily is responsible for coordinating orientation activities and for providing new employees with information about conditions of employment, pay, benefits and other areas not directly under a supervisor’s direction.   Informal orientation period had no structure. New employees shyly kept their distance from the rest of the staff. most of these programs do not address the issues and concerns of new employees or organizations, as stated above. In fact, many programs provided by public (and private) organizations actually contribute to the problems and frustrations of new employees.   4. What kinds of businesses are more likely to use Internet recruiting?   Almost all organizations are now recruiting through the Internet especially those organizations which are operating globally.   5. What are the advantages of using electronic recruitment techniques?   Rather than just list basic driver recruitment statements, the companies have found clever ways to describe their attributes and their requirements. They have simplified their online-application forms so that the forms are easy to fill out, yet provide the information the company needs to evaluate the applicant’s initial qualifications. Taking advantage of the recruiting resources offered by the Internet is an excellent way for companies to expand their driver pool. You will be able to advertise for skilled staff without the need to use a vast array of magazines and newspapers to maximise chances of success. Also, the internet costs a lot less. This does not mean that quality print media should be ignored, as newspapers still have an intimate relationship with readers Advantages of using online recruitment <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> Electronic recruitment shortens the cycle of recruitment and administration can be streamlined.  </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> Organizations are can make use of its information technology system in managing job vacancies effectively and recruitment processes are coordinated more effectively. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> Online recruitment can be used in reducing recruitment costs  </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> It can reach a broad number of applicants </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> Vacancies are known broadly across many sites and divisions separately.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> With online recruitment, organizations’ image is enhanced giving the applicants a perception of an up-to-date organization image, reinforcing organizations’ branding and culture.  </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> It also offers an access to vacancies 24 hours a day, 7 days a week reaching audience globally</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> It can be a cost effective way in building a bank of talents for the future vacancies </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> It can consistently handle volumes of job applications. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> With online recruitment, organizations can provide a thorough information about the company.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> Job applicants may be spontaneous as online applications are easy and which means applications are immediate</li>   6. What are the disadvantages of using electronic recruitment techniques? The disadvantages to using online recruitment include the potential to: <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> Even though Internet can access globally, it would still limit the number of applicants since it would be a least choice for job seekers. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> It can also cause inappropriateness and overloading of applications if job specifications are not thoroughly drafted.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> It would exclude potential applicants who are not attracted to online jobs.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> It can also be limited to those applicants that have the inability to utilize the technology. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> Discrimination would apparently rise especially with the limited CV keywords in the search tool</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> Candidates may feel the recruitment process impersonal which would likely shy them away</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> It may also impact the cultural fit dimensions of recruitment.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> It may also cause turn off to candidates especially when the website is not user friendly giving the candidates difficulty. </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> It can also cause lose out of candidates when candidates finds the website below competitors </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%; background: white"> The website may provide inappropriate information that may disgust the candidates.</li> Credit:ivythesis.typepad.com

Orientation and Recruitment

1. What are some of the factors that could influence an organization’s choice of selection methods? The success of a selection system...

Recruitment

RECRUITMENT INTRODUCTION According to (1956), recruitment refers to the process of finding possible candidates for a job or function, usually undertaken by recruiters. It is any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers and which includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not. The choice of workers has been long based on age, appearance, height, physical build, skill, education, race, and religion. Previously, there were no tests given to the applicants and even the interview is conducted haphazard.   Recruitment differs among companies. In the small firms, recruitment is usually done exclusively by the owners of the enterprise, the superintendent, or the manager. This is the traditional unplanned process in which the interviewer usually used his own impression during the interview and gives a little weight on the applicant’s actual aptitude and capacity to work.   On the other hand, in the larger firms, the trend today is to assign the job of recruitment, selection and hiring to an employment officer or personnel staff which assists the line supervisor or department head in this task, following well-established procedures of selection.    The main objective of a good employee selection and hiring procedure is to acquire people who possess the ability and competence to accomplish successfully the duties and responsibilities not only of the job to be filled but also of the potential to grow with the company.   The success of any organization, large or small, chiefly depends on the ability and efficiency of the persons in its rolls. People are hired to do jobs to attain the objectives of the organization. People make use of money, materials, and machines to produce goods and render services. People with specialized knowledge and skills are needed to render services.   People who possess the right qualifications for their jobs also require less supervision, give better work performance, get along better with fellow employees, and are happier in their jobs than those who lack the proper qualifications. When people are interested in what they do, they make efforts to get better at it (2000). No job is performed in a static situation. Additionally, those who have the right qualifications for the job are less likely to present problems to the management in the long run.   The challenge here is to look for applicants who through interviews and tests will assure the selecting committee that they can handle the job at present but at the same time also show that they are equipped to handle and face tomorrow’s challenges and responsibilities. WHY RECRUIT? Jobs differ and require a wide variety of skills, knowledge and ability. Workers also differ from one another in many ways. If a person is assigned to a job to which his ability, character, knowledge and temperament is not suited, he is likely to fail and thereby create a problem to the management. The hiring practices used in some of the companies are haphazard that may be the root cause of many problems involving personnel. It is undoubtedly that there has been a motion and failure in trying to suit the worker to the job.   It is therefore god personnel policy to attract and hire for every vacant position those who possess the ability, personality, and potential to grow with the company and to develop them into efficient, loyal and satisfied employees.   Finding the right man for a job and finding the right job for the man who is available is essential to sound employee recruitment, selection and placement. The objective is to build and maintain a working force which will be stable, productive and satisfied and to insure union-management relationships which are free from conflicts. In short, recruitment process is a sound practice designed to get the right kind of employees, place them properly, and handle them effectively.   The company which must meet competition and maintain leadership in the field cannot leave the hiring and selection of its workers to chance. It needs people to contribute to the company’s business, people with progressive ideas for new products, services and methods. Employees with the right qualifications for the job are more economical for the company in the long run since they learn faster and are less costly to train. People who possess the right qualifications for their jobs also requires less supervision, gives better work performance, get along better with fellow employees, and are happier with their jobs. Moreover, they are far less likely to do damage to the company’s equipment, customers, publics and corporate image.   In addition, there are still several reasons for proper recruitment. These are enumerated as the following: <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Company objectives are better achieved by workers who have been properly recruited.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> An incompetent worker is a liability to the company.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Personnel requirements vary from job to job.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> People have varying degree of intelligence, aptitudes and abilities.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Labor laws protect employees, making it difficult to fire incompetent and problem employees.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Individuals have different interests, goals and objectives in life.</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Careless hiring is costly and can cause problems to the company, especially to the supervisors and managers who have to deal with the workers.</li>     RECRUITMENT PROCESS The procedure in recruitment, selection and hiring should be in accordance with the company policy. When the company has a personnel department to handle matters of employment, the selection and hiring process could be more objective and satisfactory. There is no single technique that is effective at all times, under all circumstances for all companies. Employee selection involves serious responsibility and it is worth the effort to know and observe proper procedure in hiring to ensure success in choosing the right man for the job and to avoid snap judgments.   Step1. Studying the Different Jobs of the Company and Writing the Job Description and Specification The first requirement for recruitment process is knowing what kind of man the job needs. This requires the knowledge of the exact nature of the job to be filled; its duties and responsibilities; the steps taken to perform those duties and responsibilities; the tools and equipment used; the working conditions under which the specific job is performed; the amount of authority delegated to the job incumbent; the supervision involved in the job such as education, skill and physical demands; and environment of the job.   Step 2. Requisition for New Employee To inform the employment office about the existence of a vacancy to be filled, the line supervisor or the department head concerned should accomplished a formal requisition form, indicating the facts and information about the vacancy to be filled such as the date when the new employee will be needed, his rate pay, the required qualifications of the employee, the job description and job specification, approval by the responsible official of the firm and other data.   In making the selection, the employment officer must be given sufficient time to recruit and evaluate the records of applicants and to arrive at a sound decision as to the right man for the vacancy.   Step 3. Recruiting Qualified Applicants Recruitment is the process by which prospective applicants are induced to apply to the company in order that their qualifications for present and anticipated vacancies can be evaluated through sound screening and selection procedures.   The employment officer must continually look for prospective applicants until he has the sufficient number of applicants to choose from. He must determine the most productive sources of qualified applicants. The employment officer devises an effective means of reaching qualified applicants and encouraging them to apply. Care should however be made to prevent overselling the company to the prospective employees through false promises of attractive salaries and benefits.       Step 4. Reception of Applicants Not all applicants can go through the selection process. Some are eliminated through screening whereby the undesirable applicants are quickly eliminated in the basis of his apparent characteristics.   Step 5. Application Form Those chosen to be given examination and further interviews are asked to fill out application form in their own handwriting. The application form is an important tool in the selection and hiring procedure as it gives vital information about the applicant which is relevant to the job for which he has applied.   Step 6. Testing The purpose of testing is to measure the applicant’s ability. Tests are needed to discover mental ability, aptitude, proficiencies, potential ability, skills and knowledge of an applicant. They measure a person’s ability to quickly learn those jobs which involve memory, reasoning, abstracting, analyzing, and solving problems and reading comprehension.   Step 7. Checking the Applicant’s Work Experiences, School Records, and Personal References This step determines the type of job formerly done by the applicant and how efficient his performance was. His work experience and his educational background may indicate the applicant’s can do and will do qualifications. Step 8. Interview The interview is done to find out how well qualified the applicant is for the vacancy; to give the applicant he information he needs in order to decide whether or not he will take  the job if offered to him and to create goodwill for the company (1961).   Step 9. Matching the Applicant with the Job This matching process will enable the employment officer to determine if the applicant can perform the job satisfactorily.   EMPLOYEE RETENTION Job satisfaction is one of the most important issues in employee retention. Job satisfaction is the overall attitude of liking or disliking a job. It is a significant aspect that is essential for career development as well as the success of an organization. Employees typically experience a lack of job satisfaction when (1) they don’t receive the outcomes they want, (2) they receive outcomes they don’t want (like more work), or (3) they don’t find their work rewarding enough. Employees are particularly vulnerable to this problem during times of change, because the number and types of rewards that organizations in transition can offer are frequently limited or curtailed ( 1999). However, another most important factor for job dissatisfaction, and one which sometimes organizations fail to consider is the suitability of an employee for the job. Many organizations hire people without detailed emphasis on the suitability of the applicant to the organization or the job.   STRENGTHENING THE RECRUITMENT PROCESS In order for the company to strengthen this process, reduce turnover, save cost and keep asset, the following should be undertaken by the company.   Job Enrichment Job enlargement or job enrichment is the term given to the reversal of a job specialization trend. The motive is to make jobs more interesting and promote job satisfaction by adding variety. Adding variety to a job does not mean adding unnecessary motions. The enrichment is more mental than motor. Sequential tasks performed by, say, two or three workers can be grouped so that each worker performs all the tasks. The regrouping of jobs allows method changes that might otherwise be difficult to initiate. Job enrichment, if properly done, could provide opportunities for employees to be interested and satisfied with what they do.   Career Development and Reward System Recruitment and career development systems generally reflect the dominant cultural values of the society in which they operate (Schein, 1984). Identification of these values is an important human resource management function. The career development system that focuses on recruitment, socialization, growth and development, retirement, and replacement of human resources, should be adequately integrated with the organization’s performance appraisal and reward distribution system. As  (1976) defined it, a career represents a sequence of promotions and other moves in a work-related hierarchy during the course of a person’s work life. Reward systems are one of the most important mechanisms for establishing the direction in which individuals will develop in their work roles. Organizations design reward systems to (a) induce individuals to join the organization, (b) motivate attendance and performance effectiveness, and (c) reinforce the organizational structure by signaling to employees the instrumentalities of various valiant outcomes (1977).   Performance Appraisal The purposes of performance appraisal are evaluation and development (1992). Evaluation aims to establish the relative worth of each individual’s contribution and encourage good performance while development aims to improve communication between managers and employees, and to assist employees develop their skills and improve their performance.   Appraisal systems can provide valuable performance information to a number of critical human resource activities, such as the allocation of rewards, e.g., merit pay, promotions; feedback on the development and assessment of training needs; other human resource systems evaluation, e.g., selection predictors; and performance documentation for legal purposes (1989). Appraisal systems seem to offer much potential for enhancing the effectiveness of human resource decisions and for satisfying employees’ need for performance feedback ( 1979).   Employee Morale and Motivation The job satisfaction of an employee could be attributed to the level of morale and motivation that is present in the employee. Employee morale is an attitude, a state of mind, intangible but manifested by the employee’s manner and reactions to his or her job, working conditions, the company policies and programs, fellow workers, supervisors, compensation, opportunities for advancement, and the general environment (1976).   The word “motivation” is derived from the word “motivate” which means to move, impel, or induce to act to satisfy a need or want (1999). The company may provide the necessary motivations such as good pay, excellent benefits, and good environment but if he or she lacks personal drive, or the will to forge ahead, no amount of motivation will make him strive to great achievement (1960).   The best form of motivation is self-motivation with proper attitudes toward his or her work, co-workers and the management because this comes from within the individual. An individual’s own motivators are his or her own personal drives to achieve his ambition and goals. The company may provide the necessary motivations such as good pay, excellent benefits, and good environment but if he or she lacks personal drive, or the will to forge ahead, no amount of motivation will make him strive to great achievement. The employee needs personal initiative and motivation to achieve superior performance. Management should develop in the employees good work attitudes and proper behavior through seminars, conferences, workshops, and consultations.   According to a survey conducted by The Ohio State University, the top ten factors that affect employee motivation includes interesting work, good wages, full appreciation of work done, job security, good working conditions, promotions and growth in the organization, feeling of being in on things, personal loyalty to employees, tactful discipline, and sympathetic help with personal problems (2005).   Training and Development Employee training and development is “any attempt to improve current or future employee performance by increasing, through learning, an employee’s ability to perform, usually by increasing his or her skills and knowledge” (1992). Having the proper training, employees can be more confident in their work and gives them a feel of satisfaction.   Job Feedback Giving feedback is the activity of providing information to staff members about their performance on job expectations (London, 2003). A desirable employee, who accepts criticisms as part of growth and development within the job, will look at a mistake as feedback rather than as a failure, regard every job assignment as developmental, and seek out challenging opportunities where the pressure to learn will force them to grow professionally and stretch their capabilities (2000).   ADVANTAGES OF SYSTEMATIC APPROACH TO RECRUITMENT  According to (1992), most of the concern with staffing organizations involves getting matches between job candidates’ capabilities and organizational requirements on the one hand and the job candidates’ wants and needs and organizational climates and culture on the other. With the systematic approach of recruitment, it would allow the company to ensure to have a post to fill. It also offers the company the opportunity to re-evaluate the existing position to see if a different type of job specification is needed. In addition, it also let the company decide on what basis the company wishes to employ somebody. Moreover, it ensures that the company considers all possible avenues for finding the person.     CONCLUSION Recruitment is therefore an important aspect in the success of the company. It is important to follow the some steps in the recruitment process to be able to be sure to select the right person for the right job. In the competitive market, it is important that companies can capture the highly competitive employees. When the company has already has selected its employees, it is also important to retain them for the long term success of the company. One of the identified root cause of retaining employees is job satisfaction and therefore companies must do some techniques to keep their employees satisfied with their job.       Credit:ivythesis.typepad.com

Recruitment

RECRUITMENT INTRODUCTION According to (1956), recruitment refers to the process of finding possible candidates for a job or function, ...

American International Group Finance: Reward System

American International Group Finance: Reward System   Introduction Organizations today realize that employees are part of their competitive advantages. Along with effective business strategies and sufficient capital, investments for developing highly skilled human resources have been part of most companies’ road towards success. In order to obtain this unique competitive advantage, organizational management must be able to give sufficient motivation to their employees (Creech, 1995). One of the considered approaches of management in motivating their employees is through reward system. Primarily, the goal of this paper is to provide an analysis of the current reward system of an organisation, i.e. American International Group Finance co Ltd. After which, this paper also aims on providing alternative approaches for reward system for the company and will discuss the possible impact of the new reward system, with the overall performance of an organization in setting reward system.   Overview of the Company             American International Group Finance Hong Kong is a diversified international financial services industry which is a subsidiary of the A. I. Group based in New York City. A.I. Group is best known for their Finance Products, credit card, and Insurance products. Because of the global network connections by the implementation of advances technology like the internet and information communication technology, the company has been able to provide an intensive range and reach of financial services which includes commercial banking, investment banking and market personal financial services, and other banking and financial products and services.  The business philosophy of A I Group gives important to values and principles in all aspects of everyday living. At the A I group, their aim is to help people in managing wealth.  The company are trying their best to work exclusively with their employees who are seeking to capitalise their success and plan their financial futures. For the A I Group, the key to having an effective wealth management is attributed in long-term relationships established on support, comprehension, and mutual trust. In this regard, the relationship managers are able to handle small, selected groups of clients, and able to give time to fully consider their long-term desires. By integrating this with the time-honoured merits of asset allocation, the company ensures both security and peace of mind for clients. In addition, A I Group are also able to integrate long-term personal financial strategies, using their experiences in 150 years of doing business in the financial industry and an unparalleled level of investment opportunities from the America, Far East, Europe and other nations.   Analysis of the Current Reward System Employees define reward as a recognition received through the expression of real appreciation for the work they perform. It may also a reward if they are involved in a project or receive a special training. These only emphasize that employees want to be valued for their job, treated fairly, perform important works, have advancement opportunities, and be given a chance to be involved in the agency, aside from good pay and benefits. Rewards play a substantial role in attracting and retaining employees. This kind of recognition boosts the morale in the work environment. Hence, it is exceedingly important that managers are included in the design of recognition programs considering that they communicate the agency’s objectives to the employees (Armstrong, 2002). Accordingly, rewards must be SMART, meaning it should be sincere, meaningful, adaptable, relevant, and timely. Employees also value peer-to-peer recognition. This type of recognition helps create a supportive work environment. You should be aware that in making a program incorporating prizes, cash, or leave, not all employees will be recipients, some are non-recipients. Careful attention must be given to your objectives and determine if a certain program works well in your work agency. Trust is really important prior to the implementation of a recognition program. In the case of A I Group, it can be said that the management give importance and motivate their employees through their reward system. The existing reward systems in the A I Group team is said to be simple. Herein, the employees must meet minimum quality standards in terms of sales and percentage of the monthly target. If the employees achieved this, they are given specified month-end bonus.       Table 1 Month-End Bonus in A I Company    Month-end Bonus Amount •         110% Target Monthly •         HKD1,500 •         130% Target Monthly •         HKD2,500 •         160% Target Monthly •         HKD3,500 •         200% Target Monthly •         HKD5,000                         Aside from this month-end bonus, employees are also provided with Ironman bonus of 00 for the employees who have full attendance excluding Annual leave and Training which is more than or equal to 70% achievement of their monthly target.  The main advantage of the current reward system of A. I.  is its ability to motivate their staff and reward outstanding TSR by over-achieving target performance and increase in productivity and revenue within control budget of the company.             Although the reward system has some advantages and benefits, there are also some disadvantages for this reward system in the A. I Group. This include the low basic salary and the month end bonus not calculate in pro-rate after staff taken long annual leave     Recommended Reward System             Having been able to realize the weaknesses of the current reward system of A. I Group, this part will provide some alternative reward system that the group can be used. Designing a successful employee reward system is important in any organization in order for it to motivate employees to use their skills and abilities to achieve effective performance and to contribute to overall organizational objectives. Accordingly, there are different kinds of reward systems and factors that may possibly trigger employee motivation. These include: gain sharing (i.e., some kind of sharing of rewards from involvement); employee ownership; pay for knowledge (i.e., “non-traditional compensation practices that tie base wages and salaries to knowledge and skill rather than to position or the job actually performed”); group cohesiveness (i.e., “the sense of team spirit, and the willingness of its members to coordinate their efforts”); employment security; and, guaranteed individual rights (Levine, 1995). Levine (1995) further said that there are new forms of rewards systems that are particularly important nowadays, as the traditional rewards systems focus on individual achievement and the skills used at the current job and therefore may not be anymore applicable with the new forms of works and workplaces. For the A. I. Group, the employee rewards that can be considered are the financial reward and employment security reward. Their new employee reward policy is intended to align employees with organizational strategy by providing incentives for employees to act in the firm’s interest and perform well over time. Expectancy theory carries a clear message that employees must feel confident that their effort will affect the rewards they receive. Perceptions of equity are therefore crucial in an employee’s decision to remain and produce valuable work. Equity is a multidimensional construct, embracing external equity (the degree to which a firm pays employees the rate they would find in the external labour market), internal equity (the degree to which a firm differentiates pay between employees on the basis of performance in similar jobs), and individual equity (the degree to which employees are rewarded proportionately to their individual performance) (Dean and Snell, 1993). Because of the changing demands of performance on employees in high- velocity companies, perceptions of equity in its three forms may become confused, as job roles and job interdependence become more varied and flexible. Since employees would expect that as their job changes, so will their rewards, designing reward systems in high-velocity environments presents a major challenge to organizations. In high-velocity environments such as the A. I Group, a premium is placed on individuals who are able to operate in ambiguous circumstances and who are able to take advantage of loose job descriptions provided by their employers. Organizations in high-velocity environments are willing to pay proportionally higher salaries to individuals who have such skills. We would expect, therefore, that emphasis on individually equitable rewards as a means of recruiting and retaining highly capable employees would be required (Gomez-Mejia and Welbourne 1990; Snell and Dean 1992). Employee Rewards Policy amended by the A. I. Group can be classified under three broad headings: performance-contingent rewards, which explicitly reward through performance outputs; job-contingent rewards, where pay is contingent on job classification; and person-contingent rewards, in which pay is dependent on the competencies a person has (Dean & Snell, 1993). Because both output orientation and job classification may be difficult to measure accurately in high-velocity conditions, the prospect of person-contingent rewards, which may encourage the values of learning, flexibility, and creativity, would seem to be best suited to fast-changing conditions.  In addition, Employee Reward Policy can be one of the greatest foundations of control available to a company in its quest to increase organizational performance and effectiveness, yet remain one of the most underutilized and potentially complex tools for driving organizational performance. The importance and complexity of linking reward strategies to business goals in a systematic manner has been a recurrent argument in the study in this field, as has the importance and difficulty of linking rewards to the longer-term view (Hambrick & Snow, 1989). In describing the strongest level of linkage the emphasis has been placed on Lawler’s (1990) description of reward processes which are capable of reinforcing the behaviours crucial to business strategy like long-term versus short-term, employees focus versus financial results. Other alternative reward system that the A. I. Group may use is the Pay-for-Performance Plan. Accordingly, employee motivation and performance are influenced by an effective reward system. Designing a successful employee reward system is important in any organization in order for it to motivate employees to use their skills and abilities to achieve effective performance and to contribute to overall organizational objectives. One motivational theory called Equity Theory explains that employees are motivated to perform well when they perceive that their efforts and the behaviors they show at work are rewarded with just compensation.  Employees who perceive that colleagues who execute the same effort are given more compensation would react negatively and performance might be adversely affected. The organization has to address this issue by ensuring that increases in performance are matched by commensurate increases in pay.             As discussed above, employee performance is critical to the reward system.  An organization can not reward performance if it does not have a mechanism for measuring it.  Employee performance (f) is said to be dependent on three general factors: (1) skills and ability to perform task (S); (2) knowledge of facts, rules, principles, and procedures (K); and (3) motivation to perform (M). An organization needs good-performing employees to succeed.  It needs to hire people with skills, ability, and competency. These people should be able to maintain good performance during their stay in the organization and the organization has to constantly monitor employee performance to determine those who are highly skilled.  After the organization is able to accomplish selection and maintenance of good-performing employees, it can now shift its focus to supplementing the employees’ skills and competencies through additional trainings.  Finally, it can work on the employee motivation by encouraging the employees to use both their innate and acquired skills in the performance of their tasks in ways that contribute to organizational performance. Employee performance becomes the basis for the pay that the employee is due to receive.             The pay system is usually seen as an entitlement wherein going to work, performing well and avoidance of being fired would merit payment for the employee. Companies today, however, advance the so-called Pay-for-Performance Plan which is a movement from the entitlement-focused orientation to one that views pay as a varying factor with some measures of individual or organizational performance. It is a system of increased compensation (bonuses, incentives, privileges etc) in exchange for increased performance key to organization success. The purpose is to motivate employees to strive for excellence. This plan takes into consideration efficiency, equity, and compliance. The pay-for-performance plan measures performance of assigned work and tasks in line with quality, employees and stakeholder satisfaction, and costs. The performance of the employee should surpass the organization’s standards in order for him or her to receive additional rewards. The organization wants to rewards those employees who do not only accomplish goals and contribute to effective organizational performance but also those who develop commitment to the organization’s mission. Human beings have needs which can be classified as physiological, safety and security, social, esteem and status, and self-actualization. Hence, through this new reward system that will be imposed by A. I. Group, the needs of the employees will be satisfied. If any of the needs is unmet, or unsatisfied a person, the individual can be motivated if provided with an opportunity to satisfy the unmet need or needs. The most motivating opportunities are the most valued. The most valued opportunities are those designed to provide satisfaction of the most intense unmet needs. What needs are most intense varies from individual to individual. One person’s most dominant need may be the safety and security need. If this is the case, such rewards as insurance plans and retirement plans will be the most highly valued. Another person’s most dominant need may be esteem and status. Thus, the employee will value such rewards as praise, promotion, and write-ups in the company newsletter. The key is to investigate each employee’s individual need profile in order to spot the strongest needs, then to design rewards tailored to those needs. Some organizations have adopted cafeteria-style reward packages that meet the objective of matching rewards to individual needs by allowing the employees themselves to choose the kinds of rewards they value most. These plans tend to work well as long as employees are permitted to adjust their reward packages. Over time people’s needs change, and to assure that the rewards one receives are the most valued, one must have a chance to periodically alter them. For rewards to be valued, the A. I. Group must see to it that the Employee Reward System includes the proper scheduling on when would be the most accurate time to give the rewards. Generally rewards received by an individual soon after accomplishment of a goal, or soon after attainment of a given targeted performance level, are the most valued rewards and the rewards that serve best to install a desire for further achievement or continued good performance, when the reward is tied to performance in time that reward is closely associated with the performance. It becomes an extension of the performance. It has real meaning because one can vividly see that it was received for performance.   Possible Impact of the New Reward System             It can be said that the new reward system that A. I. Group will implement will have various impact for the company. One of the possible impact of this new reward system for A. I. Group is in terms of motivating and encouraging their employees to render their performances to the very best they can and to make a difference individually or by group or teams.  Herein, the new reward system will also give recognition to those employees whose works is exemplary or that employee who has contributes to outstanding achievements and accomplishments of the mission and objectives of an organization as a whole.  The incentives that the company will use will be monetary or non-monetary. This reward system recognition goes a long way to keeping employees motivated, satisfied, and committed. It can be said that management should recognize employees for both their progress toward and achievement of desired performance goals. It should show appreciation for small accomplishment as well as big ones. In this regard, this new reward system will be able to monitor whether the company has been able to meet organisational objectives. A management cannot motivate employees with promotions if their most intense needs are social or if they do not want promotions. It does no good to promise employees end-of-year monetary bonuses if they happen to already be very well- to-do financially (perhaps from an inheritance or the like). Rewards not matched to wants and needs are not valued. Hence, the Employee Rewards Policy of the American express bank must be matched to one’s most dominant needs to be highly valued and thus to highly motivate.   With the reward program, the objective is to target employees to essentially represent profit-sharing with the employees. In addition, American Express Bank’s reward program will also enable them to maintain an even-handed balance with their effective and efficient employees. In this regard, there will be no additional inputs which can be expected on the part of the employees. If these loyal employees do provide additional inputs, such as giving their job effectively and efficiently which creates good employee relations, A. I. Group identifies such input and gives fair value for advocacy in terms of rewards.             As part of the new reward system, the incentive program that A. I. Group will be initiated will also have a significant impact as the reward programs. Herein, the reward program gives emphasis on giving incentives in order to cause employees behavioral changes. With this program, A. I. Group motivates regular or potential employees to alter what the employees are presently doing. These exchange of values moves to the balance state where both the company and the employee benefit from the new behaviors. It can be said that the new reward system for A. I. Group will help in causing positive effects both for the employees as well as for the company. These are some of the ways how A. I. Group fulfils its responsibilities to the employees. The new reward system can be beneficial for both the employees and the company, since it enables the employees to work hard and be more committed in the company while the company will have enhanced employee retention and minimise or reduce turnover rates.   Conclusion Regardless of the targeted employees, the organization today is attempting to become employers of choice.  In order to become one, the management of the A. I. Group shall create an Employee reward system where potential job candidates feel that it will be an accomplishment to earn a job with the organization, and that once they have a job, the individual’s performance will be rewarded. It is said that there are different alternatives that A. I. Group can use as their new reward system, what ever this is; the management must make sure that this new reward system will be able to meet the needs of both the employee and the company to ensure competitive advantage.   Reference   Armstrong, M. (2002) Employee Reward. London, CIPD. Marchington, M. & Wilkinson A.   Creech, R. (1995). Employee motivation. Management Quarterly, 36(2), 33-40.   DeWitt, G. and Hamel, G. (2002). alternative Compensation Plan. Legislative Finance Committee. Online available at http://leg.mt.gov/content/publications/fiscal/interim/financecmty_june2002/broadband_report.pdf Retrieve May 15, 2008.   Dean, J.W.; Snell, S.A. (1993). “‘Integrated Manufacturing and Job Design:The Moderating Effect of Organizational Inertia.   Gomez-Mejia, L.R.; Welbourne, T.M. (1990). “‘The Role of Compensation in The Human Resource Management Strategies of High Technology Firms’”, in M. A. Von Glinow and S. A. Mohrman (eds.), Managing Complexity in High Technology Organizations. New York: Oxford University Press.   Hambrick, D.C.; Snow, C.C. (1989). “‘Strategic Reward Systems’”, in C. C. Snow (ed.), Strategy, Organizational Design and Human Resource Management. Greenwich, Connecticut: JAI Press.   Lawler, E.E. (1990). Strategic Pay. San Francisco: Jossey Bass.   Levine, D. (1995) Reinventing the Workplace: How Business and Employees Can Both Win, Washington, D.C.: Brookings.   Payment Practices (2008. Online available http://pmf.haven gateway.org/remuneration_and_reward/pay_practices_in_the_uk. Retrieve May 15, 2008.   Romzek, B.S. (1989). Personal consequences of employee commitment. Academy of Management Journal, 32, 649-661   Nelson, B. (1998). The Care of the Un-Downsized. Public Management, Vol. 80, April 1998.   Skinner, B. F. (1953). Science and Human Behavior. New York: Free Press.   Snell, S.A. and Dean, J.W. (1992). “‘Integrated Manufacturing and Human Resource Management: A Human Capital Perspective’”, Academy of         Management Journal, 35: 467-504.   Credit:ivythesis.typepad.com

American International Group Finance: Reward System

American International Group Finance: Reward System Introduction Organizations today realize that employees are part of their compet...