Bibby Financial Services Bonus Scheme - Book Report/Review Example

Bibby Financial Services Bonus Scheme Introduction This study indicates that, an organizational culture plays a vital role in maintaining and developing dedication and involvement to innovation. The role in boosting innovation stems from the commitment made by the organisation in terms of rewarding and motivating employees. The report highlights the reasons why companies reward their employees and further provides an analysis of the Bibby Financial Services (BFS) bonus scheme. Why companies offer bonus schemes 1. The main reason why companies offer bonus schemes to employees is to boost their level of motivation, which will lead to their increased productivity, thus high company profitability. Employees feel motivated when they experience the aspects of fairness, justice, and equity. This way, a company ensures that the contribution of employees toward achievement of the company goals is recognized. Bonus schemes therefore, serve as a form of recognition of employees’ work in the company. In order to achieve a balanced equation in relation to job done and bonuses received, many companies have utilized the equity theory in their effort to reward employees. This theory demonstrates that an employee expect recognition and equitable return for his or her contribution to the organization. For the past years, most organizations have used bonus schemes to reward and recognize employees’ input in the organization. 2. Secondly, organizations offer bonus schemes in order to ensure the realization of positive behaviour in employees, as well as their job satisfaction. Job satisfaction of employees is important, as this results in their increased work effectiveness, and in return, increased company productivity. According to Skinner’s proposed Reinforcement theory of motivation, an individual’s behaviour is affected by the positive and negative consequences. This theory focuses on why an individual behaves in a certain way. It explains that, reward is a strong tool in that it reinforces positive behaviour. This implies that, positive reinforcement in an organization stimulates positive behaviours. It increases job satisfaction and productivity in the work place Findings Most companies such as BFS offer bonus schemes based on the work that an employee does and bonus they can achieve. The Head Office Bonus for employees includes a 5 % PRP, 5 % UK PS, and 10 % Global PS. The Head Office proposed bonus for UK based employees is split at 5 % PRP, 10 % UK PS, and 5 % Global PS. Current Situation of BFS on Bonus Schemes For the past years, the company has provided a wide range of benefits for their employees such as bonus and recognition schemes. The company has been rewarding the best and hardworking employees. The company also recognizes the need of rewarding its top management with sufficient salaries that motivate, retain, and attract competent directors. The company has implemented flexible bonus schemes that relate to employees and their family such as dental cover, health assessments, and extra holiday. The bonus scheme has also included an updated bonus scheme and a new pay structure across all locations. Currently, people working in local offices also have a chance of enjoying regional bonuses. The Company reward employees for their enthusiasm and commitment. The bonus schemes are allocated based on the work that an employee does because employee rewards and bonus schemes are set to meet the goals and objectives of a business. Allocation of bonus schemes takes into account various factors such as quality, individual and team performance, customer service, attendance, or HR related measures. Recommendations 1. The company has not been in a better position to reward employees based on their location and job performance. Herzberg theory claims that dissatisfaction and satisfaction are brought by different factors. For instance, it is important to reward employees based on their job, location, and description because it enhances satisfaction at the work place. For instance, Nucor Steel in America, awards its employees bonus schemes, based on their performance. This company holds the philosophy that employees should earn and receive bonus schemes based on their productivity. In this company, when an employee performs poorly, their bonus is withdrawn or deducted. This approach has helped Nucor Steel to retain its employees for close to 28 years. Employees in Nucor Steel are therefore, motivated to perform well, as this guarantees them bonuses. 2. Employees should be given bonuses according to their job, location, and description of their tasks. If an employee’s performance or job does not affect regional profit, then such an employee should not receive regional bonuses. Maslow theory places emphasis on the fact that an organization or an employer must comprehend the current need of employees to know what motivates them. At Google Inc., the company has structured its reward system according to the needs of its employees. In 2010, Google Inc. informed its employees that they would receive cash bonus n their salaries, in addition to a holiday cash bonus. The company realizes the need of its employees, most of whom are young, have time for unwinding, therefore, the holiday cash bonus. 3. The best pay structure should be one that reward employees based on their location, description of the task, and their performance towards enhancing growth in the companies. In the past, Google Inc. award bonuses to its employees based on their performance. In addition, the amount of bonus of employees at Google Inc. depends on their job description and position. In early 2013, Google Inc. awarded four of its top executives a total of $15m in bonuses for their 2012 performance. Since these are charged with greater tasks, their bonuses were higher, compared to those of regular employees. 4. Employees should be offered bonus schemes, as a way of helping them to fulfil their desire to grow and excel both personally and professionally. This keeps employees motivated, knowing that their company cares for their development. McClelland’s theory on motivation affirm that it is important to identify people’s motivation drivers as they help to give feedback and praise effectively and keep employees motivated. At Google Inc, employees are offered cash bonus, which is in the form of tuition reimbursement, for those employees undertaking further studies. Additionally, the company offers different trainings to its employees to enhance their skills. Based on these theories, the company should identify the input or profit achieved locally and regionally and further reward employees who have caused such growth. Rewarding employees based on their performance, location, and job description would keep employees motivated for their input towards the company’s growth. The contribution of their input determines how the company flourishes in its sales and revenues. In this case, any behaviour that promotes growth in the organisation should align with the best bonus scheme to encourage and motivate good performance in the future. Read More