Employee role for achieving organizational objectives is based on several factors. Each factor is either interrelated to other or may have direct impact on employee performance considering strategic HRM policies. Rewards play a very important role in influencing employee behavior towards meeting organizational goals and increasing their motivational level that positively supports organizational commitment. Different jobs have diversifying demands for the offering of benefits to employees depending on the constituencies of each benefit system.
However, employees focus on goals achievement behavior and thus adopt a comprehensive policy for providing benefits to employees. These benefits include on-service perks and bonuses off-service compensation packages in the form of different pension plans. Benefits and rewards system affect a set of individual factors that in combine enable the organization to implement their strategic HRM policies as for supporting organizational objectives.
It must be ensured that these benefits and compensation system complies the equity principle thus increasing the harmony and address the recognition, employee rights, motivation, behavioral control, and employee performance management issues. These benefits are directly dependant on the type of the job and employee demands. Younger employees are seem to be more oriented towards higher pay earnings whereas old employees show long term return concern in terms of pension and retirement packages.
Implementation of strategic HRM policies in organization becomes great challenge due to resistance by employees as such policies also concern change management in uncertain market conditions. Companies offer numerous benefits such as annual bonuses, perks, overtime allowances, plussage, premia, and other incentives either based on individual performance or group performance. Such bonuses are essential if companies aim at getting benefit from the skills and services of employees for longer term, due to unique skills and potential capability to grow in organization in future.
Overtime allowances and premia are essential to motivate the employees for working in odd working timings or more than the usual working hours. In order to support short run operations of firm such allowances enable policy makers to achieve objectives through effective utilization of HRM policies. In order to classify the performance of employee in manufacturing concern firms performance based bay deem appropriate facilitating rewarding the employees based on the results and goals achieved.
Concerning the goal based approach, performance based pay is productive to regulate and motivate employees towards achieving higher productive outcomes measured in terms of quantifiable objectives. In contrast to that, skill based pay supports the strategic HRM policy implementation when organizations are unable to classify the objectives in real terms; objectives are set based on the viability of employees to achieve through utilizing their skills qualitative in nature. It must be ensured that skills based rewards require assessing the monetary rewards considering the impact of business growth expansion.
Positively valuing the competency of employee increases the motivation level and subsequently results in greater organization commitment. However, this pay system is not suitable to achieve organization objectives in rapidly changing working environment as specific skills become obsolete due to inadequacy to conform latest business requirement. Strategic HRM policies aimed at assessing the potential opportunities for firm in long term by involvement of employees in decision making thus setting the common goal set as corporate objective.
Pension plans offer more convenience to firms when they need to retain employees for longer duration; thus in order to profound the policies on regulating employees, pension plans convey the focus towards increasing employee performance aligning to organizational objectives. Occupational pension schemes in addition to state pension scheme offers employee recognition based on their service duration; proper conveying the return outcome to employees especially who are more oriented towards organization goals achievement and shows higher level organizational commitment.
Group personal schemes in addition to state pension scheme increases the capability of organization for delivery of HRM policies to sustain in market for longer duration; employees involvement in such programs shows the willingness of employees to understand the organization objectives and potential capability associating to aligning behavior and driving the employees in a particular directional objectives of organization.
In addition to pension benefits to permanent employees of organization, adjoining compensation packages and rewards giving the allowances such as sick pay, overtime allowances, and fringe benefits in the form of premia, special compensation for higher research studies, and providing utility facilities such as company maintained cars, employee health insurance, medical allowance, providing company maintained house for specific number of employees.
These rewards affect the intrinsic motivational factors of employees due to trust of company being shown in employees by offering various forms of rewards and benefits; classifies the ability to deliver strategic HRM policies based on the situation need and ability of employees of conform.
Flexible benefits given to employees are more suitable due to its convenience in practical implication in driving employees’ behavior pertaining to the objectives setting and long term goals achievement. HRM policies must deliver the clear information to employees for the related expectation and demands that address the organization goal setting and strategies adopted to achieve such goals.