Human Resource Management (HRM)
Work is one of the most fundamentals of life’s tasks (Csikszentmihalyi, 1992; Sweeney & Witmer, 1991). Research focusing on the biopsychosocial impacts of work satisfaction and dissatisfaction on the modern worker suggests that one’s level of satisfaction with one’s work impacts upon one’s mental and physical health and overall satisfaction with life (Csikszentmihalyi, 1992; Earnshaw, Amundson & Borgen, 1990; Kinnunen & Natti, 1994). The case for providing employees services from an organizations point of view lies with the “abstract grounds of social responsibility of organizations for those who work for them” (Armstrong, 2007, p. 835-843). The philosophy is that in exchange for offering their services, employees are entitled to more than their pay, benefits and healthy and safe systems of work. Employees should also be entitled to consideration as human beings, especially when one considers that majority of their problems arise in the context of the work and are hence best dealt with there.
According to Armstrong (2007), the employees worries and resulting stress may well arise from their work and their concerns about security, money, health and relationships with others. But these employees also bring with them to the workplace personal problems and usually, such problems cannot be resolved without reference to the situation there. For example, they may require time to deal with sick children and partners, care for relatives, or even desire advice on how to solve their problems and so minimize interference with their work. These sentiments are best echoed by Martin (1967) who intones
“Staffs spend at least half their waking time at work or in getting to it or leaving it. They know they contribute to the organization when they are reasonably free from worry, and they feel, perhaps inarticulately, that when they are in trouble they are due to get something back from the organization. People are entitled to be treated as human beings with personal needs, hopes and aspirations; they are employed as people; they bring themselves to work, not just their hands and they cannot readily leave their troubles at home (P. 46)
There is also the social argument for employees’ welfare services but perhaps the most compelling one is the economic argument. As noted by De cotis and Summers (1990), increases in morale or royalty may not result in commensurate or, indeed, in any increases in productivity, “but undue anxiety can result in reduced effectiveness” (p. 92). Armstrong (2007) also notes that while welfare services may not increase individual productivity, they can help minimize decrease. It is important to note too that Hertzberg two factor model places welfare among the hygiene factors but stresses the importance of “hygiene” as a means of eliminating or at least reducing causes of anxiety or dissatisfaction (Armstrong, p. 835-843). Pender’s Health Promotion Model gives theoretical credence to the notion of workplace health promotion. The model suggests those modifying factors, such as demographic and biologic characteristics, influence cognitive-perceptual factors, which in turn describe an individual’s participation in health promotion behavior (Pender, et.al, 1996). The Health Promotion Model lists seven cognitive-perceptual factors which Pender suggests may be altered (Pender, Walker, Sechrist, & Frank-Stromborg, 1990). As emphasized by Pender et al. (1990), a program which is based on the notion of promoting healthy behavior, as in the case of worksite health promotion, necessitates the use of a model which targets reversible or alterable behaviors. This issue is one of holism, a notion which encourages multiple assessments of any individual beyond the tangible, physical being. Pender’s health promotion model serves as guidance and justification for the existence of worksite health promotion (Reardon, 1998)
Worksite Wellness Program
In fact, many authors stress the importance of health and workability factors; the results of Karasek and Theorell (1990) showed a close correlation of the decision-latitude, employees’ health and productivity. As Drucker (2003) reckons, it is important today for organizations to pay close attention to the health, well being and motivation of its employees than it was 50 years ago. Investing in the health of employees through medical examinations, lunches or avoidance of activities with high accident or death rates is seen as an important way of improving employees’ motivation, “not less important than investment into general and specific training” (Becker, 1975, p. 34-45). Blau and Blau (1987) proved that organizations investing in the welfare of their employees are characterized by workers exhibiting both organizational commitment and are less likely to leave the organization. In their study on employees’ workability and health, they found the interaction of organizational commitment, workability and health to be closely related, and to be significantly related to absenteeism and job turnovers. These similar sentiments are supported by Matheu and Kohler (1990) who showed strong evidence in their research between employees’ motivation, workability and health and organizational performance. Flamholtz (2001) also showed that the twin concepts of organizational commitment and motivation and health as being the “foci” of human resources development and engagement (p. 6-11). Drucker (2003) also enunciates that companies who are seen to provide the best welfare programs for their employees do not only cultivate a favorable corporate image but also develops good reputations as “employers of choice” and are seen to attract the most skilled candidates (p. 34)
The above studies demonstrate that there is a clear paucity of workability and health and general organizational commitment and performance. Indeed as Armstrong (2007) argues, welfare programs may not directly increase productivity, “but may increase commitment and help in the retention of key employees” (p. 835-843). Within the operational culture at Marks and Spencer, a lot of weight is laid on the employee wellness program to achieve high rates of satisfaction and motivation. This is because there is a general abidance on the correlation between employee wellness and levels of motivation and satisfaction. This critical factor in employee motivation, satisfaction and retention has been fully exploited by Marks and Spencer in the last decade.
The increase in health care costs has become a significant issue for businesses.
Employers are struggling to find alternatives to contain or control the rising health care costs. Some of the approaches that have been adopted by Marks and Spencer include increased co pays, decreased benefits, and higher deductibles. Another approach to address the costs of health care is the implementation of health promotion or worksite wellness programs. It is seen that worksite wellness programs (WWP) have the potential to improve the health of workers which would ultimately translate into reduced health care expenditure by the state and employers, reduce absenteeism, increase productivity, and improve employees’ altitudes and job performance with distinct economic benefits.
This report contains the detailed analysis of the worksite wellness programs within Mars and Spencer and the top promotion programs and services it offers to its employee to enhance retention, satisfaction and motivation. In addition, Marks and Spencer’s costs for the services offered within the programs were reported. The results of the report indicate that there are significant differences between the number of wellness services and activities offered by the top other employers to that offered by Marks and Spencer. Large sized organizations were seen to offer more activities than small or medium sized organizations perhaps due to the greater availability of resources. The major benefits that were associated with WWPs included improved health and decreased health care costs. The main barrier to the implementation of wellness programs and services was costs. It is also recommended that future wellness programs be structured towards the needs of small and medium sized organizations.
Employers have experienced a two-fold increase in health costs per employee from 1997 to 2005 (KFF, 2007). According to a study by the Kaiser Foundation, “companies may be spending as much on health benefits as it earns in profits”. Employers are struggling to find alternatives to contain or control the rising costs while at the same time achieve higher motivation levels for their employees. The most interesting issue is that while the costs of worksite wellness program have continued to soar, Marks and Spencer has laid a lot of emphasis on this program to achieve its central aims. Approaches include increased co pays, decreased benefits, and higher deductibles. Another approach to address the costs of health care is the implementation of health promotion or worksite wellness programs. Marks and Spencer has looked toward incorporating these programs to avoid cutting benefits or shifting costs to employees.
Worksite wellness programs differ in their interventions related to intensity, duration and comprehensiveness. The most popular programs and that employed by Marks and Spencer include individual counseling, nutritional assessment and support, physical fitness, smoking cessation classes, back care programs, and stress management. Worksite wellness and health promotion programs are programs designed for employee participation to lead to healthier lifestyles and to prevent the onset of a disease or worsening of a disease. In addition that, this program aims at developing a lasting relationship with the employee. According to the Institute of Health and Productivity, the recommended health and productivity management model “directly relates health investment to a company’s overall gain in productivity and profitability” (Reynolds, 2003). Although the benefits of worksite wellness programs have been extensively documented, some are more successful than others. One particularly complex issue is how to motivate employees to participate in the available programs at their worksite. Other contributing issues include employer costs and perceived employer benefits.
The reasons behind a strong emphasis on the institution of wellness program within Marks and Spencer is not hard to point out. This report details the following reasons for this:
- Health care costs continue to rise. Employers continue to search for a means of containing costs or shifting costs to employees. Research indicates the implementation of worksite wellness programs is an effective tool to control health care costs and thus motivate employees.
- There are a variety motivation employee programs potentially available to employers with specific reference to Marks and Spencer. It has been shown that they work best when multiple approaches are combined. A combination of several of the offered activities may have cumulative benefits. One specific activity will not provide significant benefit to employees.
- Evaluation of success for worksite wellness programs within Marks and Spencer is carried out in a number of ways and its contribution to employee motivation has been positive. Within Marks and Spencer, the evaluation of success is based employee participation. Other organizations measure reductions in health care costs or employee lifestyle changes such as smoking cessation.
- Worksite wellness programs do not need to be high cost to be effective. Many activities included in programs can be without cost. Other activities can be supplemented by other businesses such as insurance companies providing free pedometers and health promotion newsletters available from reputable health organizations such as the Centers for Disease Control and Prevention (CDC).
It is seen that by shifting the passive health behaviors and adopting a more proactive stance, potentially sound outcomes can be generated (Panepento, 2004). For example, a review of corporate wellness programs conducted by Goetzel et al. (1999) reported that comprehensive disease management programs yielded the highest return on investment. These findings advocate for health education, early detection and use of appropriate interventions as a strategy that can be deployed with tangible increases in investments in wellness initiatives. As Sullivan (2004) observes, many companies now conduct health screenings at the office or plant site while others reimburse employees for the cost of annual checkups and other exams. This has been brought about by the realization that while early detection may cost $15,000 in surgical costs, the health care costs for acute disease are much higher averaging $40,000 per incidence (Sullivan, 2004).
A general concurrence on the need to improve health and wellness programs abides. The initiatives towards health care and wellness within Marks and Spencer arises from the backdrop that preventive health care can act as a cornerstone on the basis of which efforts to reduce expenditures on health, enhance employees performance and improve on the bottom line results can be congregated. Improving on the general well being of employees can help defray the high costs of Medicare incurred by organizations, for as noted by Krishman, et.al (2008), 75% of all health care costs stems from preventable chronic health preventable conditions such as type 2 diabetes, hypertension and obesity, all of which can be managed through improved positive behavior. An apparent consensus between the state, federal governments, health agencies and business community is that benefits abide in the implementation of wellness initiatives, through cost containment, that will see expenditure on health care cost go down. This remains one of the strong Marks and Spencer’s strategy in enhancing employee satisfaction, motivation and eventual retention.
While numerous studies have concluded that properly implemented wellness programs can improve employee health outcomes and have economic benefits (WCA, 1994; Stead, 1994) and that worksite wellness programs have the potential to reduce absenteeism, increase productivity, and improve employee attitudes and job performance (Conners, 1992), it is apparent that Marks and Spencer has taken it to far and the rewards have been worth the effort.
From Marks and Spencer’s perspective, the major question being raised is why provide health promotion or worksite wellness services? As an employer, what is the benefit to providing services that have not shown a return on investment? These are the questions that this initiative sought to answer. Aspects of the wellness programs include motivators for the wellness programs, the health initiatives, successful implementation, impacts in the workplace and a cost benefit analysis.
History and evolution of worksite wellness programs in Mark and Spencer
Wellness programs have revolved in the workplace due to the responses and influences within and outside the workplace and are usually provided to employees as a benefit. These benefits include individual services relating to employee wellness or health such as employee assistance programs offering counseling on personal problems, assistance with worksite injuries, and special services for retired employees. Group services may include the provision of social and sporting activities, restaurants and child care facilities (Armstong, 2007).
The history of wellness and health care programs are well documented issues in available literature (Blum, 1988). According to Steele (1998), “the most direct and influential antecedent to wellness and health care were industrial alcoholism programs.” In his opinion, the historical development of wellness programs can be divided into four phases. They are the occupational alcohol programs in the 1940s-1970s, the early employees’ assistance programs in the 1970s, modern employee assistance programs in the 1980s and finally, managed behavioral health care programs in the 1990s (Steel, 1998).
In Mark and Spencer, the initiatives and advancements in wellness and health promotion programs were basically developed to promote the wellbeing of the workers and general population. The goals of the programs were primarily to provide a more attractive and productive work environment, enhance employee commitment to the organization, motivate employees and achieve high levels of satisfaction. Today, due to the national decline in health status and increase in health care costs, Mark and Spencer has been forced to implement worksite wellness and health promotion programs with more clinical rigor. The focus is anchored on the platform of deflating high costs and is structured towards overall wellbeing, with “financial bearings never far behind” (Steel, 1998). The existence of these programs reflects the gradual shift in responsibility for health care from government to employer and from the health care industry to its consumers over the last 25 years. Industry’s burden is multifaceted, placing most businesses in a quandary when it comes to providing health care to its employees (Reardon, 1998).
The changes in lifestyle have particularly impacted the health of workers and the entire population at large. Poor nutrition, lack of exercise, stresses in the work place, and drug and substance abuse, to name a few issues, predisposes the population to a higher risk of developing complications that may require health care interventions. The sum of a more immobile population, a variable in fitness climate, a more complex disease base, and an increase in health care expenditure have equaled to a heavier financial burden for employers (Pencak, 1991). The interest in the health and wellness of Mark and Spencer is grounded in financial incentives. There is the belief that potential improvement to personal wellness and organizational finance can be realized through these initiatives.
Every manager in a corporation is faced with one principle aim; increasing the shareholders wealth by improving the bottom line. To attain these objectives, a firm has to develop a clear delineation and paucity of the effects of the fixed assets and current assets has on the returns and risks. Working capital management in this subtext will refer to the management of current assets. According to Naila (2009), the management of current assets differs from that of fixed assets in 3 principle aspects; fixed assets are for periods extending more than an year while current assets are held for less than an year, large holdings of current assets, especially as concerns elements such as cash, strengthens the liquidity position but also reduces overall profitability. Available literatures point to the fact none of these objectives can be achieved without the direct involvement of the employee. At Mark and Spencer, reward management remains one of the most recognized and well managed employee incentives.
Armstrong (2001) states that “a reward system expresses what an organization values and is prepared to pay for; it is governed by the need to reward the right things in order to convey the right message about what is important in terms of expected behaviors and outcomes.” The importance of HRM has increased with time and the need to properly manage people is becoming a central focus within organizations today. This has precipitated competition amongst various organizations seeking to portray the best skills in people’s management. This has defined a new role for line managers whose roles in organizations have shifted from the traditional supervisory role to more advanced people resource management. To effectively take efficient steps in the recruitment and selection, employee relations, reward management, appraisal and performance reviews, line managers must receive the support of the HR specialists.
Reward systems within Mark and Spencer are always based on how one’s value to the organization. “It is concerned with both financial and non-financial rewards and embraces the philosophies, strategies, policies, plans and processes used by this organization to develop and maintain reward systems.” Most organizations make use of the term “compensation” to refer to “pay” or “remuneration”. There has been a noted problem with the term compensation in that it means rewards to the employee is only ” for making amends for the distasteful fact people have to work to make a living”. In Mark and Spencer, the terms are well illustrated as will be discussed in this paper. In the analysis of Elliot (1991) proposition that “for most people work is, in the main, a source for disutility, and they therefore require payment to compensate them for the time they devoted towards it”. While this argument is true in its literal sense, it however fails to provide a complete definition of pay philosophy. This is because pay philosophy should take into consideration one’ competence and contribution, not just compensation simply because some none has worked for it. In appreciating that employee rewards takes into deep consideration of the organization’s integrated policies and practices, rewards are best given according to market worth of an employee. In addition to that, the one’s contribution, skills and competence should also form central measurements under which rewards systems can be based. The rewards scheme runs through the culture and philosophies of an organization and is developed within its framework with the aim of maintaining the best levels of pay, benefits, compensation and other forms of rewards. Employee reward evaluation within Marks and Spencer is a continuous process that is aimed at attaining the best competitive pay and reward rates the existing market can offer.
According to Armstrong (2001), “reward system consists of financial (fixed or variable pay) and employee benefits, which together comprises the total remuneration.” In addition to that, rewards system also encompasses non-financial components that include (recognition, praise, achievement, responsibility and personal growth). The non-financial components of rewards system also include performance management systems. The combination of the two; financial and non-financial rewards forms the total reward system. Deeper analyses of the reward systems reveal that it has five more components that include processes, practices, structures, schemes and procedures. All these five components are adopted by Marks and Spencer in its efforts to achieve high employee satisfaction and motivation.
Strategic human resource management
Different firms will pursue different approaches to their reward policies, philosophies, culture and modes of operations depending on their perceived levels of efficiencies and the prevailing circumstances. In Marks and Spencer, the basic goal of reward system management is to ensure a satisfactory level of people management, motivation and retention. The efficient management of people is an integral component of the overall corporate strategy within Marks and Spencer to motivate and retain employees. Best human resource management within Marks and Spencer in reward management include reward strategy, reward policies, total reward, total remuneration, base or basic pay, contingent pay, employee benefit and performance management .
“Reward processes and practices are most effective when they are based on through-through and appropriate reward strategies, philosophies, and policies” (Armstrong, 2001). Reward strategy takes into consideration the programs that critical to the organization and underlines the objectives it wants to achieve. In broader term Armstrong (2001) defines it as “a declaration of intent as to how the organization is going to put its reward philosophies into practice.” In this regard, the overall aim of reward strategy is to align it with the critical reward issues that directly impacts on the aims and objectives of the Marks and Spencer. The strategy must enhance the ability of Marks and Spencer to achieve its central objectives. In addition the above, the reward strategy has been integrated with the other HR resource development programs to ensure their sustainability and impact.
Armstrong (2001) defines reward policy as “the factors that indicate how reward processes should be designed and managed within the context of the reward philosophy.” This demonstrates that it avails the necessary guidelines to the line managers on the modalities of effectively handling recurring reward issues. This gives is the purpose of enabling consistent and sound decisions while at the same time taking into consideration the current business environment. From a cybernetic perspective, it can be advanced that Marks and Spencer is required to maintain high levels of people’s management that facilitates its day-day-operations so as to ensure for the smooth running of operations and meet its short-term obligations. The balance between the two factors has ensured sustainability of its reward policies.
This however, has not been easy where a business has to operate efficiently and still make profits. A major problem encountered by majority of firms is reward policy, reward philosophy and reward strategy mismatch. Best combination and practice in the three components of reward scheme fused with sound HR management as initiated in Marks and Spencer made it have capacity to see that its profit levels improve.
Surveys taken at Marks and Spencer have indicated that a lot of its managers spend considerable times focusing on problems that involve employee management decisions. Armstrong (2001) has indicated that one reason for this is that employees form the greatest asset within an organization and must be rewarded in the best from to enhance their loyalty and retention. Total rewards can be defines as “all the employer’s tools available that may be used to attract, retain, motivate and satisfy employees and encompasses every single investment that an organization make in its people, and everything that its value in the employment relationship”.
The central objective of the total reward within Marks and Spencer is aimed at driving the envisioned forms of practices within an organization. This program takes into consideration all the other reward programs that Marks and Spencer has the capacity to exploit for its mutual benefit and that of the employee. It includes both the financial and non financial components. The aim of the total reward within an organization is that not every single reward program is handled in separation. All components, strategies, philosophies and culture are integrated together. “Total reward strategies are vertically integrated with business strategies but are horizontally integrated with other HR strategies to achieve internal consistency” (Armstrong, 2001). The components of the total reward include compensation, benefits and the work experience. Compensation component of the total reward are basically of financial nature and are aimed at satisfying the demands that are financially linked while benefits are aimed at satisfying the protection needs and as such are less likely to be performance based. In Marks and Spencer, the work experience component of the total rewards is geared toward meeting the relational needs that culturally form a binding factor of the employees into the organization. It is important to note that total rewards within Marks and Spencer are influenced by both the internal and external factors.
The work related component of the total reward remains the least developed. This is because most enterprises the work load program consist of various components that are fused together over the time. In the analysis of the benefits of the total rewards to an organization, a number of substantial issues that directly benefit an organization are raised. These include increased flexibility, recruitment and retention, reduced costs, heightened visibility and enhanced profitability.
Kerzner (2006) illustrates succinctly that
Personnel and development practitioners are expected to play their part alongside line managers in maximizing the contribution of people to the achievement of corporate purposes. They must understand the business context and the importance of adopting a strategic viewpoint when meeting business needs in partnership with their colleagues. The total remuneration of rewards is thus best enhanced.
The total remuneration translates the summed up value of cash payments and cash benefits that employees have earned. Most organizations base the value of total remunerations using a number of indicators such as experience, contribution and position within an organization. The employee contribution forms a very critical factor in the determination of total remuneration at Marks and Spencer
Base or basic pay
This is a fixed amount paid to a worker depending of his or her rank in the form of a wage or salary. It has the advantage of giving the line managers and the ability to determine the additional payments that are related to performance. In addition to the above, basic pay reflect on both the internal and external environments of an organization. Continuous internal evaluations within Marks and Spencer carried determines the basic pay of its employees while external relativities are products of the prevailing market conditions at a given point in time. There are other methods that have been used to arrive at the amount of base pay at Marks and Spencer. These include negotiations that in must cases involve open negotiations with trade unions and employers or individual agreements at the onset of beginning to work. Base rate within organizations vary depending on skills, experience and contribution.
Contingent pay “is pay that is linked to measures of individual, group, or company performance and is used as a means of incentivizing workers and promoting shared interests in higher output, productivity, customer satisfaction, and other indicators of business success” Armstrong (2001). These are extra payments in the form of financial rewards that are given to employees based on performance, competence, contribution, skill and experience. In case where they are combined in the base pay, they are referred to as variable pay or pay at risk. There are a number of contingent pays and the amount an employee at Marks and Spencer receives depends primarily on the factors highlighted above. These include individual performance related pay, bonuses, incentives, commissions, service-related pay, competence related pay, skill related pay, and contribution related pay and career development pay.
“Employee benefits typically refers to retirement plans, health life insurance, life insurance, disability insurance, vacation, employee stock ownership plans, etc and are increasingly expensive for businesses to provide to employees, so the range and options of benefits are changing rapidly to include, for example, flexible benefit plans” (Armstrong, 2002).
This is also know as the in-direct pay and is composed of those elements that are of additional value to the base pay. Most of these indirect payments are strictly not remuneration and thus vary continuously and over the years. At Marks and Spencer, employee benefits is given due attention as much as other forms of employee motivation methods.
Simply put, Armstrong (2002), defines
Performance management includes activities to ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on performance of the organization, a department, processes to build a product or service, employees, etc. Information on this topic will give you some sense of the overall activities involved in performance management. Then you might enhance your understanding by reviewing closely related library topics referenced from the sidebar.
In recognizing the fact that Marks and Spencer performance depends primarily on the quality of its management and employees, line managers appreciate the role of reward in improving the quality of management through generous rewards. Organizations must also know that rewards alone cannot play the sole role of management quality improvement but this process demands with it a number of other factors for it to be filly realized. This is because, “the culture, values, and management style of an organization, together with its performance management and employee development programs are equally important” ref. it is therefore true that reward management forms an integral part of quality management but cannot stand alone in an organization in ensuring quality management and employee satisfaction and motivation.
The successful design, development and implementation of management decisions are very complex and at times daunting tasks for many managers especially when managing the most prizes assets of organization-employees. Usually, managers will be faced with daily problems that require the application of tools that will ensure the successful operations irrespective of the sectors they manage such as the identification of the objectives of the organization, alternative means of achieving the stated objectives and the selection of the means that accomplish the objectives in the most efficient manner. The first process in the decision making process will entail the identification of the problem. The problem in dealing with employee rewards for the optimum benefit of the organization must enhance the ability of the organization to effectively achieve its objectives. Ideally, successful identification of the problem will encapsulate trying to delineate answers to questions such as what could be the causes of the problem, where this is happening, how it is happening, when it is happening, with whom it is happening, and why it is happening (MacNamara, 2008). In essence, this should be followed by an in-depth analysis of the delineation of the complexity of the problem, verification of the understanding of the problem; prioritization and understanding the role to be played towards the redress of the problem (Dennis, 2007).
Reward management is one of the central management issue Intercontinental Hotel top management has over the year managed excellently. Effective reward management not only motivates the employees but also depicts harmonious management style the company is applying to capture and succeed in the market. In addition, the recruit and maintain the most talents in the business. According to Gary (2001),
The reward or compensation people receive for their contribution to an organization includes monetary and non-monetary components. Remuneration does not simply compensate employees for their efforts – it also has an impact on the recruitment and retention of talented people.
In this regard, reward management calls for brilliant strategies to ensure that it succeeds. Towards this, the company has employed a number of strategies to help successful implement this program. These strategies include controlling reward, monitoring and evaluating reward theories, managing development of reward system, devolution of line managers for responsibility for reward system.