Aims To Use Reward Management Theory Commerce Essay

Reward direction is the nucleus of human resource direction. Reward direction system scientifically justified or non, is closely linked with the nucleus fight of endeavors and market fight ( Amstrong & A ; Stephen, 2005 ) . Therefore following scientific and rational endeavor wages direction, for optimum incentive effects, to the full mobilise the enthusiasm of the staff and the enterprise is important. A set of effectual wages direction system can non merely cut down the cost of labour for endeavor, but besides can greatly animate the enthusiasm of the employees, inaugural and creativeness ( Bratton & A ; Gold, 2003 ) . A scientific and sensible wages direction besides can assist enterprise harmonizing to market alterations adjust concern scheme, to better market reaction velocity, so as to hold more competitory advantage.

This paper usage reward direction theory ( Hierarchy of demands theory, Expectancy theory, Two Factors Theoryi??Equity theory ) combined with COFCO Coca-Cola company ‘s existent state of affairs, analyzes the chief job from different positions, and so puts frontward the optimisation of the company honor direction category operational scheme, the intent is to assist COFCO Coca-Cola company to better its wages direction present state of affairs, the publicity endeavor ‘s public presentation degree and overall fight.

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Literature Review

Definition of wages direction

Reward Management refers to the schemes, policies and procedures to develop and keep an organisation ‘s fiscal wages systems. It is an built-in portion of the HR direction in alliance with organisational ends. RewardA direction is regardedA as an of import roleA in theA HRM. Most organisations realized that wages reinforces employee focal point on their public presentation, enhance motivate on degrees and derive their committedness ( Allen & A ; Kilmann, 2001 ) . Extrinsic wages is initiated from outside the individual and includes ( Armstrong, A 2007 ) : A wage and rewards, employee benefits, interpersonal wagess, publicities. Intrinsic wages is the 1s that is self-administered by the individual and encompasses ( Armstrong, 2007 ) : completion, accomplishment, liberty, personal growing. TheA strategicA purpose of reward direction is to germinate and implement the wages policies, procedures and patterns to confirm the achievement of organisation ‘s concern ends ( Armstrong & A ; Murlis 2004 ) .

2.2 Performance wages motive theoryi?s

Motivation is to animate people ‘s motive, arouse the enthusiasm of the people work. Incentive theory is the nucleus of the western theory of behavioural scientific discipline. A big figure of direction patterns have proved that the constitution of inducement theory to better the efficiency of organisation dramas an of import function.

Hierarchy of demands theory: hierarchy of demands theory basic position, the individual ‘s behaviour is caused by the motive, and motive is the demand of the determination. Therefore, foremost of alli??the demand alteration to a mark A· so from demand to animate people ‘s motivations, and steer its behaviour. Hierarchy of demands theory first put frontward by Abraham Maslow whom is a celebrated American psychologist and behavioural scientists. Harmonizing to Maslow ‘s hierarchy of demands theory, human existences ever have some demand to be met. Once a demand to be met, this demand is non hold incentive consequence any more, and so appeared another demand remains to be meet. Maslow ‘s hierarchy of demands present that the lower beds of basic demand to run into lateri??people can lift to another degree of demand to prosecute. Human demands are divided into five degrees. a‘ Physiological demands a‘?Safety needs a‘?Love and belonging a‘?Esteem a‘¤Self-actualization ( Maslow, 1943 ) .

Maslow ‘s hierarchy of demands theory has certain mention value ; directors in doing reward direction system harmonizing to the demands of employees choose appropriate direction methods. Alder Buddha is the Yale university professor, behavioural psychologists. He put frontward “ ERG need theory ” i??and this theory is similar to Maslow ‘s theoryi??he besides acknowledged that the human demand to hold beds, when people meet a demand, can bring forth to run into the demands of higher degree demands. But about need analysis of alder Buddha is non merely confined to the Maslow ‘s hierarchy of demands theory class: One is that human demands are non wholly born, some demands can be acquired by people larning, such as the demand for self-fulfillment: two is put frontward the celebrated “ reverse – back hypothesis ” , viz. if higher degree demand failed and hard to accomplish, be back to its original demand, and the original demand is more of import than earlier ; the 3rd is that directors should seek to hold on and command work, through the work consequences satisfy people ‘s assorted demands, arouse people work motive.

Howeveri??Hofstede ( 1984 ) have proved that there is deficiency of hierarchal construction of demands as suggested by Maslow. Some people may be deprived of lower degree demands but strive for self realization.

There is deficiency of direct cause and consequence relationship between demand and behaviour. Sometimes peoples are non cognizant of their ain demands. Measurement of satisfaction of demands is non possible.

Expectancy theoryi?sExpectancy theory was made by the behavioural scientist Victor Vroom. Expectancy theory is that a individual engaged in some activity power depends on two factorsi?sthe activity produced consequences expected to be attractive and the possibility of accomplishments. The former one refers to the satisfaction of people get after success, depending on their single subjective feeling, and the same consequences for different people may hold different attractive force. For case, the successful completion of a occupation can acquire publicity expected result is a great incentive consequence for those who want to advance, but there is no attractive force to those who does non desire to presume duty. The possibility of accomplishments is another of import inducement factor, it depends on personal religion, ability and external status. Harmonizing to the above theory, we can cognize that there are two ways to better work incentive consequence: 1 is to increase the attractive force of the work consequence ; another is to increase the easy grade of completing the work to employees ( Vroom, 1964 ) . Howeveri??the endeavor should observe that these two sorts of index does non depend on directors but employees must acquire blessing, so to better the inducement steps must be from inactive actuator ‘s point of position, merely utilizing this manner, inducements can play a function.

Lawler ( 1971 ) claims that anticipation theory is excessively simplistic and delusory because it assume that if an employer makes a wages, such as a fiscal fillip or publicity, luring plenty, employees will increase their productiveness to obtain the wages. However, this merely works if the employees believe the wages is good to their immediate demands.

Two Factors Theoryi?sHerzberg put forward the Two-factor theory ( besides known as Herzberg ‘s motivation-hygiene theory and Dual-Factor Theory ) . Herzberg thought to act upon employees chiefly by two factors: hygiene factors and motivational factors

Hygiene factors are those occupation factors which are indispensable for being of motive at workplace. These do non take to positive satisfaction for long-run. But if these factors are absent at workplace, and so they lead to dissatisfaction. In other words, hygiene factors are those factors which when adequate in a occupation, lenify the employees and do non do them dissatisfied. These factors are extrinsic to work. Hygiene factors are besides called as care factors as they are required to avoid dissatisfaction. These factors describe the occupation environment. The hygiene factors symbolized the physiological demands which the persons wanted and expected to be fulfilled. Hygiene factors include: wage, company policies, working conditions and interpersonal dealingss. Any betterments in hygiene factors do non actuate workers but their decrease below a certain degree will dissatisfy them ( King, 1970 ) .

The motivational factors yield positive satisfaction. These factors are built-in to work. These factors motivate the employees for a superior public presentation. These factors are called satisfiers. These are factors involved in executing the occupation. Employees find these factors per se honoring. The incentives symbolized the psychological demands that were perceived as an extra benefit. Motivational factors include: acknowledgment, sense of accomplishment, growing and promotional chances, duty and meaningfulness of work ( Herzberg, Mausner & A ; Snyderman, 1959 ) .

Unlike the hierarchy of demands theory of Maslow, Herzberg thought run intoing the low-level demands will non bring forth incentive consequence, on the contrary, it will merely take to dissatisfied with a sense of the disappearing.

The theoretical account is non applicable in all conditions, there is blending up of both the factors in a occupation, which can non be separated as intrinsic and extrinsic.

This theory was limited to the applied scientists and comptrollers. The consequence of hygiene and motivational factors may wholly be reserve on some other classs of people

Equity theory: Equity theory is a theory that attempts to explicate relational satisfaction in footings of perceptual experiences of fair/unfair distributions of resources within interpersonal relationships. Considered one of the justness theories, equity theory was foremost developed in 1963 by John Stacey Adams, a workplace and behavioural psychologist, who asserted that employees seek to keep equity between the inputs that they bring to a occupation and the results that they receive from it against the sensed inputs and results of others ( Adams, 1965 ) . The belief is that people value fair intervention which causes them to be motivated to maintain the equity maintained within the relationships of their colleagues and the organisation. The construction of equity in the workplace is based on the ratio of inputs to results. Input signals are the parts made by the employee for the organisation. There are three sorts of comparing, one is to set the wage and input to compare, the 2nd is put now wages and his past wages to compare, the 3rd is to set self reward and others reward to compare.

However, some critics argued that people might comprehend equity/inequity non merely in footings of the particular inputs and results of a relationship, but besides in footings of the overarching system that determines those inputs and end products. Therefore, in a concern scene, one might experience that his or her compensation is just to other employees ‘ , but one might see the full compensation system as unjust ( Carrell and Dittrich, 1978 ) .

Chinese attitude toward wages

Harmonizing to Tang et Al. ( 2000 ) , China ‘s conventional tendency of “ Fe rice bowl ” ( undertaking employees demands through governmental public assistance strategies ) is declining off due to the significant inflow of the abroad investing, so western patterns agitating Chinese direction by replacing the construct of public presentation based wage, higher income differences and other benefits like, pecuniary inducements, growing chances, public assistance benefits, etc. ( Armstrong and Murils, 1988 ; Baruch, 2004 ) . China ‘s labour market is reckoned one of the premier challenges in the Earth and human resource is summit operational issue because of the paramount labor cost and high turnover issues in China ( Leininger, 2007 ) . Wei and Gima ( 2009 ) argued in their survey that Chinese companies should be used at the same time high order, long term tendency in wages construction and a low level- parlous wages construction to augment the positive results of market orientation on the public presentation of new merchandise.

Reward direction in COFCO Coca-Cola

Background of COFCO Coca Cola

COFCO Coca-Cola is one of the three Coca-Cola bottling spouses presently operate in China. COFCO Coca-Cola was established in 2000, which was a joint venture funded by COFCO Corporation as the bulk at 65 % and The Coca-Cola Company at 35 % .CBL engages in the bottling production and gross revenues and distribution of Coca-Cola merchandises in 16 states, metropoliss and independent parts in China under the franchise understandings with The Coca-Cola Company. As the terminal of 2010, COFCO Coca-Cola delivered 486 million unit instances, which makes CBL go one of the top 10 Coca-Cola bottlers in the universe.

Reward direction in cofco coca-cola

COFCO Coca-Cola belongs to international joint venture endeavor, because of the influence of national civilization and western civilization, taking the matching wages direction will hold alone features.

Similar to the European and American many endeavors, under t- he influence of the market economic system, COFCO Coca-Cola continue the wages direction method which used in Europe and the United States, harmonizing to the confer withing company quantitative advice, analysis of human capital, mention industry market and endowment market monetary value, harmonizing to the place, public presentation, and personal ability to make up one’s mind the wages degree. Besides that, COFCO Coca-Cola harmonizing to the latest reward degree of the labour market decides the wage of each place. Under the state of affairs between supply and demand of the labor market in convulsion, COFCO Coca-Cola is through the manner of the trade dialogues between the two sides ( employees and employers ) to place common accept wages degree, . Europe and the United States enterprise pay attending to personal public presentation instead than senior status, advocate personal inducement wages system, the wages spread of senior direction and ordinary station, outstanding staff and ordinary employees is really broad, sometimes this spread could make 100s of times.

At the same clip, under the influence of the traditional Oriental civilization, Chinese endeavors attach great importance to human feelings and relationship, pay attending to enterprise ‘s long-run development, under the influence of this civilization, most of the endeavor utilizing senior salary system, this is a system combined with senior status and ability. The age and the length of the uninterrupted length of service is non merely decided to staff wages, but besides decided the chief footing of publicity. Under the similar status of instruction, ability and parts, who has the long uninterrupted length of service, who will be promoted. The directors of endeavor think that this manner can extinguish a batch of complicated rating factors, cut down unfair of subjective. The reward degree between enterprise internal tantamount makings staff do non hold much difference, but the wages between high senior status employees than low senior status staff has a immense difference.

The jobs

Harmonizing to the current position of COFCO Coca Cola, the restriction of this wages direction is:


Current wages system deficiency of equity and the wage of some place do non widen the spread, the bigger salary difference in some same place besides let employees experience dissatisfaction.

The endeavor deficiency of scientific occupation rating. Job rating is the foundation of wages design ; rating of the consequences will be powerful footing to find compensation. Job rating content chiefly includes the undertaking and duty, work demand accomplishments, undertaking completion, working environment and hazard, and so on. This endeavor does non hold a item, scientific and sensible occupation analysis, and therefore can non acquire accurate occupation rating.

The procedure of determination and the plan is non crystalline. Current wage to employee complete confidentiality and transparence is low ; in add-on, although the public presentation assessment is related to employee public presentation, assessment mark unseeable besides make employees experience unjust. And employee salary degree one time determined, it is difficult to alter, and so do the staff ‘s dissatisfaction.

There is a bigger difference between current wage and labour market mean monetary value. The wage of those who engaged in simple work is higher than the labour market wage, the endeavor internal salary norm inclination evidently.

The inducement is non adequate

Through the wages system to actuate work sense of duty and enthusiasm of employees is the most common and most effectual besides the most used method. But at present the endeavor adopt the same wages system, wages construction, the combination of wages system and the place besides non plenty, there is no other incentive manner to acknowledge that the staff ‘s on the job accomplishment and part. Besides thati??the inducement method is excessively individual, which can non fulfill the demands of different degrees employees.

Unfulfilled public presentation wages position

The reward payment facets are still mostly reflecting the allowance wages position, that isi??every twelvemonth employees will hold a rise in wages due to the length of working and other reasonsi??especially for senior managersi??no affair what happens in endeavor. This inclination does non follow with the design of the modern endeavor wages system. The bing allowance wages position earnestly affects the enthusiasm of employees, the good or bad forces public presentation in the salary wages is non reflected in. The endeavor should be bit by bit from allowance wages position altering to public presentation wages position, doing wages chiefly based on occupation public presentation.

Same work with different wages

The bing wages system for internal employee and external staff made different reward criterion, this job causes some employees lose the sense of endeavor belonging, besides influence their work enthusiasm, after a short expiration of contract, many employees choose to go forth the company.

The entire wages direction mechanism is unreasonable

The bing wages system is chiefly based on posti??not related to the ability and forces public presentation, therefore as a consequence of a batch of people in order to obtain comparatively high income put more attending to how to seek a higher place, so that their work energy scattering. In add-on toi??bonus nexus to the place degree and basic wage in a big extent instead than associate to occupation public presentation in a certain period.


Play the function of inducement mechanism

Maslow hierarchy needs theory Tells us that in the design of the wages system should give different inducements to different demands for employees, in order to maximise the consequence. The company besides should be aimed for different employees, planing different inducement system.

For front-line employees, because of their comparatively strong demand for low-level, chiefly utilizing money inducement to run into their basic life disbursals, so that employees can experience at easiness working in the endeavor, cultivating trueness and the dedication spirit for the endeavor.

For the directors, since most of them are knowledge workers, inducements should be in the stuff incentive footing, supplying more publicity chances to them, in order to run intoing their self-actualization demands.

For the proficient forces, due to their desire to hold a sense of achievement, the endeavor can run into the demands of their accomplishments upgrading through preparation, or doing work more ambitious by the re-design of the work.

Optimized wages direction system

Job analysis in a scientific manner

Job rating in a sensible manner

Performance assessment in a efficiency manner

Constructing the comprehensive wages system

The endeavor should beef up the on the job environment building. The specific operation including, constructing a analyzing organisation, and prevent depreciation of human capital, construct a good endeavor civilization, wage attending to the staff ‘s emotion.


The kernel of wages is a sort of trading or a exchange, reflects the trade relationship between the endeavor and employees, is the endeavor to pull, motivate and retain endowments needed and an of import agencies of success. Therefore, the degree of reward direction for the development of the company is really of import.

This essay presents the reward direction current pattern and the jobs in COFCO Coca-Cola. Besides that, some recommendations is be given in the terminal of the essay.

The purpose of this essay is to supply some suggestion for COFCO Coca-Cola endeavor wages system, at the same clip, supply some inspiration and mention to other endeavor in China.


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