Payroll

Background Of Organization

The GT Wonderland is a leading distributor of cosmetics and personal care products. Brand portfolio includes Revlon cosmetics, Revlon hair color, Avene skincare, Elancyl body care, SILKYGIRL cosmetics, SILKYGIRL fragrances, SG Men fragrances, Silky Lips lip care, Silky White face products and Silky Care feminine hygiene wash.

The GT Wonderland launched SILKYGIRL in June 2005, adding new excitement to the landscape of color cosmetics in the mass retail market. SILKYGIRL offers a complete range of high quality color cosmetics that will meet the needs of discerning consumers in both the urban and suburban markets. SILKYGIRL's brand personality is fun, young, and colorful and exudes confidence. The core promise of the brand is delivered through the latest color trend and high quality specifications of the products.

SILKYGIRL is now marketed at over 1,000 cosmetics counters in Malaysia, Singapore, Brunei and Jakarta. In Malaysia, it is available at Guardian, Watsons, Parkson, Jusco, Sasa, Apex and other independent supermarkets and pharmacies.

Misson

·         Increase health awareness and the harm of chemical-based products by the introduction of a safer alternative of skin care

·         Strengthen the brand image as the first organic certified brand in Malaysia

·         To achieve supreme growth in terms of volume and profit to build a stable of global brands that leverage on the strength

Visson

To become the major player in the skin care market by selling organic personal care products, besides enhancing its corporate values with the aim to encourage an environmental-friendly and healthy beauty lifestyle among Malaysian individuals.

1.      What are the basic components of a compensation and reward system?

Employment is typically characterized as an exchange relationship. Employees provide organizations with something of value (their labour) and in return receive something of value. Work can offer many valuable outcomes to employees, including the opportunity to use their abilities, to make a contribution, are compensated and rewarded through this exchange process. Compensation refers to all forms, returns and tangible services and benefits employees receive as part of an employee relationship as discussed above. On the other hand reward management system is concerned with the formulation and implementation of strategies and policies, the purpose of which are to reward people fairly, equitably and consistently in accordance with their value to the organization and thus help the organization to achieve its strategic goals.

Direct Financial Benefit. It focuses on two elements of remuneration which are directly related to performance. These are the basic pay rate and any additional bonus which is paid for individual or group performance above this standard. Indirect Financial Benefit: Consists of those regular or intermittent payments (not related directly to performance made for a variety of contributions such as suggestion for improvement of production or employee loyalty or commitment such as high base rates, pension schemes etc. Non – Financial benefit schemes which will increase the morale of employees, such as job enlargements, job enrichment. It is however, worthy to note that there are often a variety of payment systems within one employing organization, each system being appropriate to a particular group of employees which have come into being as part of a conscious management strategy. In doing so, an employing organization has to be aware of its objectives in relation to the use of pay as a control mechanism, the constraints which apply to its choices, the financial objectives of its employees and their representatives and the relationship of the payment system or systems to the total personnel policy of the organization.

What innovations have organizations introduced in each of those components because of an increasingly competitive business environment?

Globalization, new technologies, and greater transparency have combined to upend the business environment and give many CEOs a deep sense of unease. Just look at the numbers. Since 1980 the volatility of business operating margins, largely static since the 1950s, has more than doubled, as has the size of the gap between winners (companies with high operating margins) and losers (those with low ones).

Market leadership is even more precarious. The percentage of companies falling out of the top three rankings in their industry increased from 2% in 1960 to 14% in 2008. What’s more, market leadership is proving to be an increasingly dubious prize: The once strong correlation between profitability and industry share is now almost nonexistent in some sectors. According to our calculation, the probability that the market share leader is also the profitability leader declined from 34% in 1950 to just 7% in 2007. And it has become virtually impossible for some executives even to clearly identify in what industry and with which companies they’re competing.

All this uncertainty poses a tremendous challenge for strategy making. That’s because traditional approaches to strategy though often seen as the answer to change and uncertainty—actually assume a relatively stable and predictable world.

Think about it. The goal of most strategies is to build an enduring (and implicitly static) competitive advantage by establishing clever market positioning (dominant scale or an attractive niche) or assembling the right capabilities and competencies for making or delivering an offering (doing what the company does well). Companies undertake periodic strategy reviews and set direction and organizational structure on the basis of an analysis of their industry and some forecast of how it will evolve.

Increasingly, industry structure is better characterized as competing webs or ecosystems of codependent companies than as a handful of competitors producing similar goods and services and working on a stable, distant, and transactional basis with their suppliers and customers.

In such an environment advantage will flow to those companies that can create effective strategies at the network or system level. Adaptive companies are therefore learning how to push activities outside the company without benefiting competitors and how to design and evolve strategies for networks without necessarily being able to rely on strong control mechanisms.

In a stable environment it is sufficient to improve what already exists or to examine single change proposals. The simple step of requiring that every change proposal be accompanied by several alternatives not only surfaces a more varied and powerful set of moves, but also legitimizes and fosters cognitive diversity and organizational flexibility.

2.      ‘Recognition is the most reliable of rewards.’ Critically examine this statement. Identify three ways organizations commonly use to recognize and rewards employees through non-financial means.

Popular Rewards

Companies tend to rely on non-financial rewards when budgetary constraints make it difficult to offer raises or other monetary incentives. The importance of these issues to employees suggests that non-financial rewards should be a part of any company's plan regardless of the economic situation. Popular non-financial rewards include flexibility in work hours, training opportunities and recognition by management or co-workers. Employees in the Hay Group's study listed training opportunities and career development as two of the most important factors in job satisfaction.

Money as a Motivator

In the past, many companies relied on money almost exclusively to motivate their workforce, but employees often rate other aspects, such as recognition and flexibility as more important. The problem with relying too much on money as a motivator is that it can encourage employees to focus on whatever will earn an immediate incentive rather than on finding long-term solutions or creative new approaches. It can also lead employees to see each other as opponents in a competition rather than working together for mutual benefit.

Popular Rewards

Companies tend to rely on non-financial rewards when budgetary constraints make it difficult to offer raises or other monetary incentives. The importance of these issues to employees suggests that non-financial rewards should be a part of any company's plan regardless of the economic situation. Popular non-financial rewards include flexibility in work hours, training opportunities and recognition by management or co-workers. Employees in the Hay Group's study listed training opportunities and career development as two of the most important factors in job satisfaction.

Recognition and Respect

“Being treated with respect” as the single most important factor in motivation. Recognition and praise can send employees the message that the company respects them and values their contribution. Financial rewards remain important they actually have less importance for most employees than respectful treatment and recognition.

3.      Do you think that compensation and reward strategy of a high technology firm will be different from that of an emerging fast growth firm? Why?

In this study, we attempt to advance the literature in several ways. First, we draw upon the innovation literature by making a distinction between two types of firm innovations: incremental innovation and radical innovation. We add to the literature by simultaneously examining the effects of both organizational rewards and controls on these two types of firm innovations. Second, the literature has suggested that innovation can help firms catch up with the opportunities in uncertain environments to build/maintain their competitive advantage, and sequentially benefit their long-term performance. Although some scholars have studied the relationships between innovation and firm performance, it is still unclear whether radical innovation and incremental innovation have the same effects on firm performance.

Third, our focus on technology firms emerging market also represents a contribution. Previous studies on the relationship between organizational reward, control and innovation have mainly been done in the developed markets which are characterized by individualism (that is people look after their own interests rather than the interest of in-groups) and low uncertainty avoidance (that is, people tolerate ambiguity and uncertainty).

Firm innovation and financial performance control over others. However, the managers may control every sphere of life of their employees. Thus, how firms reward and control employees has more far-reaching implications for innovation. Therefore our focus on technology firms can enrich our understanding of how the effects of organizational reward and control mechanisms on innovation and further firm performance can be different in a different national culture context.

We argue that material reward is negatively related to radical innovations, but positively related to incremental innovations. Radical innovations involve a high level of risks and uncertainties. It usually takes more time and more resources to develop radical innovations but the outcomes are uncertain. Suggests that, in situations involving a large amount of uncertainties, the overemphasis on external and objective performance reduces the intrinsic incentive and curiosity needed for innovation work. Indicate that extrinsic rewards concrete tangible rewards such as bonuses, pay increases and awards are detrimental to innovation. This is particularly true in where employees in technology firms typically receive a higher salary than employees in other industries. Therefore, for employees who have already enjoyed high salaries, material rewards may be less effective in motivating them to engage in radical innovations involving high risks. Further, in a country emphasizing honor and reputation, employees’ confidence and feeling of achievement may be harmed by organizations which only provide material rewards. In such situations, employees may try to avoid radical innovation to reduce their responsibilities in case the radical innovation fails.

In contrast, incremental innovations involve minor adjustment and development of current products and processes, which have a low degree of risk and high likelihood of success. Thus it is relatively fast and easy to observe and evaluate the outcomes of incremental innovations. When material reward is utilized and objective goals are set, employees consider not only the possible economic gain from developing innovation but also the potential loss if their innovations fail. Therefore the employment of material rewards can prompt employees to focus on developing innovations that are easy to accomplish, most of the time, incremental innovations.

Workforce stability and reliability is an important factor in small business success for just about any entrepreneur, but its importance may be particularly pronounced in one of the fast-paced high-tech industries. Indeed, it is a far more serious matter to replace a software programmer three months before a new product launch than it is to replace a cashier or stockperson. For many small high-tech companies, workers are among their most valuable assets; the smart entrepreneur will compensate them accordingly, via salary, benefits, promotion, responsibility, or some combination thereof, to best ensure a high degree of employee retention.