Table of Contents

Table of Contents...........................................................................................................1

1 Executive Summary................................................................................................2

2 Problem Statement..................................................................................................3

3 Literature Review...................................................................................................4

4 Alternatives.............................................................................................................6

5 References.............................................................................................................13

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1 Executive Summary

This case study is about the changes has been done with the new appointment of the
New CEO to the York Banking Corporation. After the CEO’s appointment, he
realizes that there are some organizational approached should be changed and
updated. So after he changes overall company structure, pay structure and culture for
the betterment of the company and to drive organization towards the better
performance.

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2 Problem Statement

1. How the initiatives of the new CEO can be implemented embedding best HR
practices?

2. How the organization can create a better culture of performance and

productivity and what role HR should play in this?

3. The key challenges for HR and Line Managers and the manner which they
should set about these challenges?

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3 Literature Review

Any system that relates the rewards of an individual employee to the performance of
the organisation that he or she works for is called performance-related pay, or PRP.
Such systems are designed to motivate employees and to align their effort more
closely with the aims of the organisation. The pay is often financial, but it can also be
non-financial. Payments under such schemes are usually made separately from regular
salary payments. In this way, the recipient appreciates that they are variable, separate
and not guaranteed.

Sometimes the rise in an employee's annual basic salary is also performance related.
This can be helpful in retaining employees who are at the top end of the pay scale for
their job ranking, but whose performance is still outstanding. Such employees are
more numerous in today's flatter organisations, where the opportunities for promotion
to a higher rank are fewer than they were in the multi-layered organisations of 20
years ago.

PRP schemes are most commonly used for managers in private-sector organisations.
Technical, clerical and manual employees are less often included, even though
(ironically) their performance can be more easily measured. Such schemes are
generally self-funding; the improvement in performance more than pays for the
rewards.

Some critics argue that pay is not a major motivator in the workplace. They quote
Frederick Herzberg's view that the job itself is the source of true motivation, backing
up their claim with studies such as one where staff cited pay as fifth on their list of top
ten motivators. Others object to PRP on the grounds that it accentuates the difference
between the highest-paid and lowest-paid employees in an organisation. CEO pay as a
multiple of average pay has been rising steeply in recent years.

PRP schemes have drawbacks. It can be difficult to design an objective and fair
measure of performance that does not emphasise the individual's effort at the expense
of that of the team. It can also be difficult to base the rewards on the right time frame.
If they are too short-term, they may not be in the best interests of the organisation as a
whole; if they are too long-term, they may not be sufficiently motivating to the
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participants. Poorly designed PRP schemes can interfere with other improvement
programmes. One company, for instance, found that its attempts to introduce a just-in-
time system were hindered by the reluctance of staff to undertake the necessary
training. The training interfered with their productivity in the short term, and hence
with their take-home pay.

PRP schemes became increasingly popular in the 1980s and 1990s. One study found
that in 1989 44% of American companies had PRP plans in place for employees other
than senior management. By 1991 the figure had increased to 51%. A 1998 survey by
the UK's Institute of Personnel and Development found that some 40% of a sample of
British companies had PRP systems in operation at the time. Today, half of all British
companies have PRP schemes for at least some of their workforce. Overall, though,
such schemes cover only about a quarter of all workers.

In their 1982 book “In Search of Excellence”, Tom Peters and Robert Waterman
mentioned the great variety of non-monetary incentives used by the excellent
companies that they studied. They said that excellent companies actively look for
excuses to hand out rewards. At Hewlett-Packard, for instance, they found members
of the marketing team who would anonymously send 1lb bags of pistachio nuts to
salesmen who sold a new machine.

In the 1990s, shares and share options became a regular feature of performance-
related pay, particularly in the United States. Behind them lay the idea that the
ultimate purpose of companies is to add value for shareholders. And the best way to
do that is to turn managers into shareholders by rewarding them with options.

Such schemes succeeded in turning a few senior managers into multimillionaires, as

much because of the general bullishness of the stockmarket as of the performance of
the managers or of their business. One side effect was that ruthless managers pursued
the goal of increasing share value by any means possible, including lying, fiddling the
accounts, bribing investment bankers and backdating their stock options so that they
began on particularly favourable days.

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4 Alternatives

1. How the initiatives of the new CEO can be implemented embedding best HR
practices?
 Development of Staff
 High investment in Training and Skill Development of the staff.
 Career progression opportunities for the staff based on their
productivity, performance and educational level.
 Development of staff in terms of higher responsibilities and challenges.
 Provide the work-life balance of the employees.
 Organizational practices that motivates the employee effort.
 Linkage between reward and performance
 Buildup performance management system with introducing proper and
realistic Key Performance Indictors then directly link it with the
reward and recognitions that can be improve the employee satisfaction.
 Financial and Non-Financial incentives for the excellent performance.
 More accountability by Line Managers
 Redevelop the Job descriptions of the Line Managers to have more
authorities or decision-making powers in other words Decentralization
of decision making and empowerment.
 Good employment relations
 Shared attitude towards the company
 Employee share ownership.
 Extensive information sharing about the current financial situation and
current challenges facing by the organization.
 Organization work based on self-managing teams.
 Collaborative working culture.
 Greater emphasis on competency based learning

Competency-based learning refers to systems of instruction, assessment and grading,

that are based on employees demonstrating that they have learned the knowledge and
skills they are expected to learn as they progress through their education.

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  The introduction of more best practices in Human Resource Management
 Talent Development

One of the major reasons to focus on talent is that it is a great way to get the HR
function into a broader discussion about what is next for the organization and what the
business strategy should be. It is possible to develop the right talent in order to
implement business strategy. Understanding the availability of talent in combination
with knowing how it is critical for the business strategy should lead to a more
interactive relationship between the strategic choices of the organization and how its
talent is trained and managed.

 HR Automation

HR automation has literally put the human back in human resources by freeing up
more time to spend strategizing with the company’s leadership, finding and securing
top talent and working with employees. it’s important that HR leaders be proficient in
workforce analytics.

 HR as Business Partners
Human resources professionals no longer function behind the scenes. In fact, their in-
depth knowledge of the workforce has made them invaluable members of the team,
especially when it comes to the decision-making process. Human resource leaders
make ideal business partners because they have insight that no one else in the
company has: insight into individual employees and the workforce as a whole.

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 2. How the organization can create a better culture of performance and
productivity and what role should play in this?

Following facts will contribute towards creating better organizational culture of

performance and productivity.

 Communicate clear goals and expectations to your employees

The majority of employees want to be a part of a compelling future, want to know

what is most important at work and what excellence looks like. For targets to be
meaningful and effective in motivating employees, they must be tied to larger
organizational ambitions.

 Share information and numbers

Let them in on what is going on within the company as well as how their jobs
contribute to the big picture. When you keep you employees informed they tend to
feel a greater sense of worth. Keep communication hopeful and truthful – do not be
afraid to share bad news, instead be more strategic about how you deliver it. Improve
performance through transparency – By sharing numbers with employees, you can
increase employees’ sense of ownership.

 Encourage open communication

You can get insight into what things are important to the employee by using surveys,
suggestion boxes and team meetings. Be open-minded and encourage them to express
their ideas and perspectives without criticism. This means putting into practice
everything you have learned about effective listening. Address their concerns in the
best way you can.

 Not communicating or communicating late can damage engagement

Hearing about an important update from media, colleagues or family and friends can
have a negative impact on employee engagement. Ensure employees hear these
messages from the business as soon as possible.

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  Actively promote organizational effectiveness, reputation, values and ethics

Actively promote organizational effectiveness, reputation, values and ethics –

Employees want to feel good about their leaders, where they work, the products they
sell and the reputation of their company.

 Culture

Encourage employees to find a personal fit with the company culture.

 Let staff tell their own stories

Encourage them to tell their own stories about what they are doing to support
company strategies or embody organizational values.

 Trust

Employees need to trust each other as well as their leadership. Employees are
constantly watching leadership to see how their decisions affect the strategic direction
of the organization and if their behaviors reflect what they say.

 Build engagement

Show that you’re genuinely concerned about employees’ opinions and use social
media as a communications tool to build engagement.

 Encourage innovation

Engaged employees are innovative. They’re always looking for a better way.

 Create a strong team environment

Strong employee engagement is dependent on how well employees get along, interact
with each other and participate in a team environment.

 Sense of belonging

Non-work activities that foster relationships increase employee engagement.

 Provide constant feedback on the positives

When people know what they’re doing well, they’ll keep doing it – or, even better, do
more of it. Providing someone with a little recognition on what they’re doing well can

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go a long way toward boosting morale. This is not to say “ignore the weaknesses” –
just don’t make the weaknesses the only focus area of feedback. This doesn’t mean
you should not create accountability, it actually means the opposite – but, if all you do
is criticize, people will learn how to hide their mistakes or shift blame.

 Give immediate feedback

Feedback is two-way communication. It is the opportunity to share opinions and find

solutions. Too many managers think should be the province of the annual personnel
revue. It’s not. It should be a daily occurrence.

 Show how feedback is being used

Demonstrate to staff how their feedback is being used.

 Support employees in their work and growth

How many of you have responded to a subordinate’s idea as brilliant or even good.
Success begets success. You can support employee growth by providing education
and learning opportunities, cross training, coaching, and any other interactions that
support employees’ personal development.

 Collaborate and share on problem-solving

When employees get the idea that their manager or leader is the one who has to solve
all the problems, it takes away from their sense of empowerment, and ultimately is
likely to decrease engagement over time. Encourage team members to take
responsibility, and work through problems or issues on their own, or collaboratively.
It’s not the manager’s job to fix everyone else’s problems.

 Delegation

Delegation is good for you because it expands your managerial span of control. It’s
good for your employees because it is a growth opportunity for them. It demonstrates
your trust in them to do the job correctly and increases their ownership of the task.

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  Incentives

Incentives that are matched to accountability and results. Managers who want their
employees to be engaged recognize that incentives must be allocated based on
objective criteria and that different employees are motivated by different things.

 Celebrate both financial and non-financial achievements

Employees need to feel validated and that they are a valued part of the organization.
Leadership needs to show how much they care for their employees and show
recognition for efforts.

3. The key challenges for HR and Line Managers and the manner in which they
should set about these challenges?
 Managing Change

The challenges related to change for human resource management include:

 helping employees overcome resistance to change by convincing them

about the bigger picture
 provide leadership for the change processes
 ensuring stability of systems and processes during the change process
 equipping employees to deal with the changed realities.

 Ensuring Employee Competence

The dimensions of HR challenges in this regard include:

 understanding the employee’s innate skills and competencies and

providing employees with opportunities to apply these skills for the benefit
of the organization
 skill enhancement of the workforce to promote adaptability, resilience, and
agility
 adopting a market driven approach

 Selecting training programmes for the employees and facilitating

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  The human resources manager can face this challenge head on by
identifying the core areas of the business where training is needed and by
offering either on-site programs or by facilitating training opportunities for
employees off-site.

 Measuring employee performance and performance related pay

 Performance related pay decision depend on the judgement of managers.
 Sometimes performance is not under control of the individuals and is
affected by the work environment.

 Employees resist to change

Managing resistance to change is challenging for many reasons. Resistance to change

can be covert or overt, organized or individual. Employees can realize that they don't
like or want a change and resist publicly, verbally, and argumentatively. In a worst-
case scenario, employees can forcefully refuse to adopt the changes and thus bring to
your organization the need for confrontation and conflict.

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5 References

1. Economist.com. (2017). Cite a Website - Cite This For Me. [online] Available
at: http://www.economist.com [Accessed 5 Jun. 2017]. Anon, (2017).
2. Torben Rick. (2017). Torben Rick - International Experienced Senior
Executive. [online] Available at: http://www.torbenrick.eu [Accessed 9 Jun.
2017].

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