Cheezy Pizza Company Human Resource Management

1. Introduction

This report aims at providing a plan for establishment and execution of a reward system for Cheezy Pizza Company for its plan to entering new markets, Singapore. It introduces and explains the purposes of the reward structure, rationale for the focus on the design of such system, and important factors that influence the design process and implementation of the system. By using Human Resource Management theories, the report analyzes all the factors related to the process of designing and execution of a reward system that can help Cheezy Pizza to improve its human resource management practice and encourage its employees and management team to improve their performance as well as reinforcing the organizational culture so that the dynamic environment at workplace would be favorable to everyone.

1. The reward system

A strategic reward system is essential for all companies. However, a system like that is only working well if it covers four aspects, including compensation, benefits, recognition and appreciation (Entrepreneur, 2016). With a company going to enter new market like Cheezy Pizza Company, the reward system is an important tool for human resource management and can lay a firm foundation for its successful performance of the business.  The following session provides the insight for the design and factors influencing the implementation of a good reward system that Cheezy Pizza needs to adapt.

1. Objectives of the reward system

A reward system is developed to recognize and reward employee’s performance and behavior. While the performance is easy to measure, behavior is more challenging to address. A good system is system that is built directly linked to the company’s organizational goals for short term period or long term development (Entrepreneur, 2016). The establishment of a reward system should aim at five objectives that the company needs to achieve, including attracting and retaining good staff, motivating employees, influencing organizational culture and reinforcing and defining the organizational structure.

Firstly, a reward system is used to attract and retain more people. A better system will definitely bring about more satisfaction to the employees, which eventually results in higher loyalty and low turnover rate among them. It is proved that a good reward system would positively influence people in choosing their jobs. For example, Google and Facebook are having good reward system, providing high incentives and favorable working conditions to their employees. They are also attractive to people because of their high pay and rewarding policies. Thus, intrinsically, the employees feel satisfied working with them. Extrinsically, the employees are attracted to the good well known reward systems that these companies created. In retail industry, service people are the biggest resources. High level of staff retention and selection of efficient employees are the main goal for human resource (HR) management. Therefore, a reward system can be instrumental to such a retailer’s HR strategy.

Secondly, the reward system would be a motivation for individual performance, and eventually organizational performance (Figure below). A reward system is built to drive effective performance (Lawler, 1990). It aims at providing the employees with their actual needs. Thus, the performance of employees will be improved based on their satisfaction with the rewards. In detail, there are three things that affect the reward-related motivation. First is the expectation from employees. If an individual has excelled in his performance, he will expect a reward for return. Second is the attractiveness of the reward system. Employees tend to be attracted to a certain form of rewards. Some likes to have financial incentives while others look for promotion. Third is the expectancy of effort and performance. An employee ‘s perception of the hardship that he underwent to achieve a job, he would expect a facilitation solution for that, such as a better working condition and equipment, which can encourage him to overcome the hardship. Such motivation should be included in the reward system.

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Figure: The relation between reward and motivation (Wu, 2016)

Thirdly, a reward system can create a positive organizational culture for a company. The design and implementation of a reward system can lead to the formation of a good organizational culture. Good elements of reward can help a company to form a strong and collaborative workforce, an innovative environment, strong teamwork culture, or performance oriented culture. With a good reward system, the company can expect to generate positive individual behaviors, which contribute to shape and strength a positive organizational environment. Thus, equality-based and fair system of reward will be critical for creating a positive firm culture for new entrant.

Fourthly, a reward system can encourage employees to improve their knowledge and skills. There are two ways that reward system can do this. In the first way, the incentives can come in form of training and knowledge upgrading for employees. In the other way, the employees, once rewarded and be happy, will try to improve their skills and knowledge in order to get better performance and job achievement, which eventually can pay back satisfactorily in form of rewards. With this, both the firm and employees can benefit. For the firm, it can readjust the targets to meet the needs of the organization, for example, providing training on service skills for service staff. For the employees, they can benefit from free training and gain extra knowledge and skills.

Finally, the reward system can consolidate and define the organizational culture (Lawler, 1990). It can impose strong influence on an organizational structure change. For example, in case the company needs to reinforce their culture, reward system is a tool to enhance such a process.

In summary, there are five objectives that a reward system can be set to support the organization. Motivation of staff, encouragement of continued learning, and establishment and reinforcement of organizational culture are the main targets that a reward system is designed for. Not all the firms need all the five objectives. Instead, the reward system should be designed to meet the goals of a certain company at a certain time. The reward system should be targeting attraction and retention of employees, motivation of staff, and creation of positive organizational culture for the organizations.

1. Reasons for attention to the design of reward system:

There are several reasons for careful attention to the design of a reward system for the company. Five aspects for consideration during this design process include the emphasis on cost effectiveness, the goal of business expansion and future development, both extrinsic reward and intrinsic reward, the alignment of the system with company’s goals and employees’ needs and the avoidance of discrimination.

Firstly, cost-effectiveness should be the first factor to be focused in to design the reward system. While the reward system is essential, it is also costly. Therefore, a balanced reward system is important to encourage employee’s performance and achieve company’s business goals while the efficiency of financial use for such a system is secured. Usually, pay for performance should be an important form of reward for employees. This form of pay is important because it is designed to align the employees’ efforts tightly to the goals of the organization (Hindle, 2009). However, other forms of intangible rewards such as vouchers and excellent performance recognition should also be included to reduce the overall cost for the reward program.