5HR03 AC 2.3 Explain the merits of different types of benefits offered by organisations

5HR03 AC 2.3 Explain the merits of different types of benefits offered by organisations. *Approx 400 words

Employee benefits, which provide incentives in line with an organisation’s objectives, are an essential component of a comprehensive reward system. Flexible work schedules and performance-based compensation are two examples of these benefits.

Performance-Related Pay (PRP)

By establishing a connection between remuneration and an individual’s performance, performance-related pay (PRP) encourages high productivity and guarantees that individual achievements and organisational objectives are in line. Based on preset performance criteria, PRP may include incentives like commissions, bonuses, or pay raises. This strategy supports organisational goals, rewards exceptional performance, and works well for roles with measurable outcomes (CIPD, 2024). PRP can be used by Eco-Insulate UK to reward employees in the production and sales departments who exceed their respective resource efficiency and sales goals. For instance, Eco-Insulate UK may use this strategy to distribute commissions based on how well sales representatives close new eco-insulation customers. Here, performance and rewards are closely linked, which can boost morale, create an excellence-oriented culture, and significantly raise return on investment (Morris, 2021). Over-reliance on PRP, however, may undermine intrinsic motivation in workers, causing them to choose rewards over true enthusiasm for their jobs (CIPD, 2024). Additionally, PRP may exert pressure on Eco-Insulate UK’s resources if several staff surpass their goals, requiring careful planning. Additionally, inconsistent and opaque performance appraisals can lead to feelings of unfairness, which lowers employee engagement and morale.

Flexible Working Arrangements

Flexible work arrangements accommodate employee objectives, including work-life balance, by giving employees the freedom to choose their own work schedules, locations, and hours. In order to accommodate the demands and obligations of individual employees, modern organisations use hybrid working models that embrace elements like remote working, flextime, and part-time employment (CIPD, 2023). Customer service and administrative staff at Eco-Insulate UK may benefit from such a strategy, which would allow them to manage their work and personal obligations like fatherhood. Because workers may work from anywhere, Eco-Insulate UK might save money on office operating expenses. Additionally, by promoting employee autonomy, this strategy may improve job satisfaction and talent retention (CIPD, 2022). Eco-Insulate UK may expand its talent pool by accommodating people with a range of needs, including those with disabilities, by putting in place a flexible working arrangement. However, managing a workforce with a variety of demands and ensuring constant collaboration among distant workers may be difficult with flexible working arrangements (CIPD, 2023). Additionally, if hybrid working models are used, responsibilities with measurable outcomes—like the sale of eco-friendly materials—may call for extra performance standards and management techniques. Additionally, it might call for a large investment in management technology, which would put a great deal of demand on organisational resources.

References

CIPD (2022) Trends in flexible working arrangements. https://www.cipd.org/en/knowledge/reports/flexible-working-trends/.

CIPD (2023) Flexible working: Guidance for people professionals on planning and managing. https://www.cipd.org/uk/knowledge/guides/flexible-working/.

CIPD (2024a) Performance-related pay. https://www.cipd.org/uk/knowledge/factsheets/pay-performance-factsheet/#performancerelatedpay.

Morris, A. (2021) Pros & Cons of Performance Related Pay. https://www.davidsonmorris.com/performance-related-pay/.

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