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Table of Content
(A) PESTLE analysis which is very often called even as PESTs analysis are a hypothesis under
marketing philosophy. However, these ideas are used as a piece of equipment by firms all over the planet to pursue the environ which companies are controlling and design to start up a new plan/product/design.
PESTLEs are an analysis who brings to mind P from politics, E from economics, S from social, T from technology, L from legal, E from the environment. It gives an eagle’s vision to the whole environs from various directions that someone wants to keep on the path and check while observing an accurate design/scheme. The substructures have gone through beyond doubts alterations, as the expert of trades had put on various products. A PESTLEs analyzes are substructures and tool for traders. Anyone can utilize this if he/she is on the lookout for analyzing and watch the external marketing environment of his / her company. The master plan management tool works out the macro-environmental factors. This makes the decision easier.
The different macro tips environment factors can control the business policy. So, it is of utmost importance to follow the PESTLE frameworks. The line-up is to check out exactly the factors of authority in business performance.
PESTLE is a tool that nudges managers to look at assorted distinct classification in the macro-environment. Like SWOT, PESTLE is a word from. In this case, the letter represents the categories to examine: legal factors, political factors, technological factors, sociological factors, economical factors, environmental factors. When using PESTLE to examine a specific firm’s situation, imbricate between various categories of PESTLE. Factors can occasionally happen just as they can with SWOT. It is quite crucial for one to be conscious of the completion of each of the letter of the PESTLE it is as follows:
1. Political Factor
Politics plays an important or major role in Business. Because there is an equilibrium between the influence system and free markets. As global economics takes the place of domestic economics, companies must have to grander at numerous opportunities and the threats that take place before expanding into the new regions. It also helps the firms in identifying the optimal areas that include sale and production. Political factors also help in determining and identifying the locations of the organization or the corporate headquarters.
There are some political factors that include -
These ingredients determine the extent to a government may influence the economy or a certain industry. For example, a government may take liberties with a new tax or duty due to which whole revenue engendering structure of organizations might transform. Political factors indulge with tax policies, trade tariffs, fiscal policies and et Cetra. That a government may impose around the fiscal year and it may have an effect on the economic environment (business environment) to a great extent. For example, a government supremacy a new tax or duty due through which entire revenue-generating structures of organizations might differ.
Social factors assess the frame of mind of the consumer or the individual in a certain market. These are well known as a demographic factor. Social indicators like inflation, GDP, and exchange rates are crucial to management. They can inform when time is appropriate. These factors help to find out how an economy might react to definite changes.
The following are some social factors to lighten up:
Changes in people’s interests and values are also included in this category.
Environmental awareness has stimulated demand for solar panels and hybrid cars and electronics. A general interest in fitness and health has generated industries in organic meals, gym materials and gym. The vogue of social media has generated an immeasurable demand for instant access to statics and services, not for mobile phones or smartphones. Interest and utility are constantly modifying and differ from realm to realm, producing the latest market chance as well as communicating provocation for companies trying to set foot in unheard-of new markets.
Both governments and consumers punish companies for having an unfavourable effect on the environment. Governments should impose huge fines upon firms for polluting. Companies are also given an award for having an effective impact on the environment. The customers are in the mood to change brands if they get to know that the companies are ignoring their environmental duties.
Few common environmental factors are:
This step requires learning about the regulations and laws in any region. It is crucial for ignoring unneeded legal costs. This is the last factor in PESTLE. These factors rundown the legal components. Often, start-ups link these elements to the political substructure. Many legal disputes can influence a company that does not react accountably.
Common legal factors that companies should focus on includes:
(b) According to the study conducted by (Mizsey, P., 2017) it demonstrates that motivation theory consists of rewarding the employees with financial and non-financial rewards that can motivate them to work hard and work at organization for long term due to the benefits. A good reward system aimed at motivating employees to give their best and work hard to accomplish organizational goals. Every employee will not get motivated by the same recognition or benefits so it becomes important to make reward strategies so that every employee of the organization gets rewarded and gets motivated by the same.
A reward is an organic term for the totality of non-financial or financial compensation or total consideration to an employee in return for service or work contributed at work. Reward, which is occasionally referred to as consideration or compensation, is perhaps the most important supreme contract term in every paid-employment. Its effect on employees or workers performance is in most instances considerably misinterpreted.
The knowing of this term is very crucial; because the incentive schemes given to a worker or an employee will sway the behaviour and level of appointment to the organization.
Reward strategy, in the practice, is far off the obligatory consideration or compensation package, it is a kind of package of motivational inducement that escorts actions in controlling and manipulating the behaviour of workers or employees with regards to the achievement of an organisation’s project. It is the remembrance of the importance of reward as an encouragement technique that most of the organizations invest laboriously in awards in order to gain attention to the behaviour of the workers or employees. Motivation theory combines benefits, cash compensation, profit sharing, stock options, variable pay system, and group reward system. Reward strategy enhances the personal growth opportunities of employees. When the employees of the organization are motivated the work done by them will be more effective and efficient, ultimately this will help the organization to attain its organizational goals.
Rewards are of two parts, the intrinsic reward and the extrinsic reward.
The intrinsic reward consists of - empowerment, team working, job satisfaction, personal growth and status, job enrichment, achievement. Extrinsic rewards are the palpable rewards in the appearance of benefits and pay while intrinsic rewards are impalpable rewards incorporated by individual workers or employees as a result of their involvement in various activities. According to the study conducted by (Wang, S., 2018) demonstrates that employees are highly motivated when the rewards are extrinsic. Extrinsic rewards are the best for the majority of the employees as people tend to pull towards the behaviour that eventually leads to some measurable rewards.
Three reward strategies include reward policies which help the organization to achieve its goals, provides an effective and motivated workforce, and gives benefits to the organization and its employees. The reward policies should be made in an effective manner that helps the organization to attain maximum profits. The reward strategies can deliver various benefits to the company or organizations. Every organization needs a proper reward strategy because it is very important to encourage and appreciate the employees at the workplace so that they feel grateful and appreciated and try to give their best to the organization. Every employee wants to work in an organization where their works get appreciated and recognize their efforts. The right reward strategy involves using bonuses, incentives, smart pay for employees. These rewards motivate the employees and encourage them to be loyal to their organization.
Motivated staff will give their best to contribute to organizational success and the best results. A motivated and successful environment makes employees feel rewarded and helps to retain the key employees in the organization. The successful environment also attracts new talent. Reward strategy enables the organization to achieve organizational goals and objectives. Reward strategy deliberate the culture of the organization and an appropriate reward strategy helps the organization to get finer financial results. A good reward strategy should consider financial as well as non-financial rewards. Reward strategy is important because it builds a loyal and honest relationship between employees and the organization. Reward strategy is based on five main elements that are benefits, development, work-life balance, recognition, and professional development. The reward strategy should be made considering the organization’s objectives and employee’s wants.
Reward strategy covers mainly three things such as:-
Cash prize:- every organization is liable to pay its employees for the services that are their efforts, time, skills that employees provide to the organization. The pay includes both fixed salary and fixed allowances and variables such as incentives and bonuses. The organization must provide cash compensation to them for their overtime. The organization should also give cash compensation to its employees for career and performance development.
Work environment:- positive work environment is a key factor of retaining organizations, key employees. Every employee wants to work in an organization where there is a feeling of team spirit and togetherness. A positive environment consists of a leader that inspires its employees to attain a successful career. Ultimately a motivated employee will help the organization to achieve its objectives and goals.
Benefits:- The organization should provide extra benefits in addition to cash compensation to its employees. Benefits depend on the affordability and size of the organization. Benefits can be in the form of job security, condolence to employees and their families. The benefits comprise holidays, medical insurance, income protection, and pension schemes.
Recommendation of suitable reward scheme for workers
The rewards scheme is that scheme in which the employees get paid and rewarded for the services they provide to their organizations. Rewards can be in the form of monetary and non-monetary payments. In reward schemes employees get rewards in exchange for their contribution in the organization, Every organization must have a proper strategic reward system for its workers or employees. The reward strategy must cover recognition, benefits, appreciations, compensation. Reward strategy policy includes employee’s reward and recognition programs that motivate or encourage the employees to change their behaviors and work habits to help the organization to attain organizational goals.
Keys to developing a reward program are as follows:- communication of programs to employees, ascertainment of appropriate rewards, determine the performance of the individual, identification of the performance of employees that will help the company to attain its goals. There are various ways to reward employees without money such as giving them treat once in a month, inviting their families for lunch, giving them vacations, giving them flexible working hours, verbally praising them for their work, celebrating employee’s appreciation day, etc. non-monetary reward strategy includes motivate employees verbally, feed off the staff with positive energy, be transparent with the employees, give them feedback which motivates them, let the employees lead at the workplace, recognize employees and their rituals, always praise them for their work, let your employees know that you trust them, etc.
Types of reward programs
Variable pay system:-Reward programs worked for both individual and team performance
variable pay is basically paid for performances. Variable pay is paid to an individual for the accomplishment of a task in the form of incentives, bonuses, stock options, etc. This variable pays to motivate the employees and makes them feel rewarded. Good incentives encourage the employees to attain the goal of the organization. Variable pay includes bonuses as well. Bonuses are rewards for individual accomplishments. Bonuses are used to uplift employees. The next main component of the reward strategy is profit sharing. It refers to the strategy in which employees get some percentage of the company’s profits. The reason behind profit sharing is to reward the employees for their participation in companies achieving profit goals. It encourages employees to stay with the company. The next main component of the reward strategy is stock options. This option has become a very popular method of rewarding employees. Stock option plan gives the right to the employees to purchase a definite number of companies shares at fixed prices for a definite period of time.
Group based reward system:- Bonuses, stock options, profit sharing all can be used to reward individuals as well as a whole team’s accomplishments. Group based reward systems are based on team performance and individuals receive rewards on this basis. Group based reward system encourages individuals to work in a team to accomplish team goals for the organization. This reward system also rewards the under-performers to encourage them so that they can give their best to the organization and uplift their performance.
Recognition programs also come under reward strategy, an effective recognition program focused on recognizing employee’s efforts. Organizations can recognize employees by giving them certificates, or some monetary values such as cash benefits or compensation. The Organisation should pay attention to its employees and recognize them in every aspect. The different employee is motivated or encouraged by a different form of recognition. Reward strategies and recognition programs both play an important role in the organization to achieve its goals and objectives.
A good reward system aimed at motivating employees to give their best and work hard to accomplish organizational goals. Every employee will not get motivated by the same recognition or benefits so it becomes important to make reward strategies so that every employee of the organization gets rewarded and gets motivated by the same. Rewards keep the employees motivated and happy rewards encourage the employees and ultimately it helps the organization to achieve the organizational goals and objectives. Reward strategy consists of monetary and non-monetary rewards both to encourage the employees. Three reward strategies include reward policies which help the organization to achieve its goals, provides an effective and motivated workforce, and gives benefits to the organization and its employees. The strategy combines benefits, cash compensation, profit sharing, stock options, variable pay system, and group reward system. Reward strategy enhances the personal growth opportunities of employees. When the employees of the organization are motivated the work done by them will be more effective and efficient, ultimately this will help the organization to attain its organizational goals. Reward strategy includes reward policies that consist of four main elements that are pension and benefits, organizational culture, learning and development, and variable pay system.
The analysis of FTSE states various factors that demonstrates the reason why executives are so well paid. The factors include high incentives and a percentage of corporate equity.
Accounting for all financial derivations of CEO premiums remuneration and reward, merchandise alternatives, shares possess, and the varying prospect of redundancy converting in concerted worth commensurates to a change in CEO remuneration.
Shareowners depend on CEOs to acquire policies that maximize the utility of their shares. Such as human beings, although CEOs incline to engross in ventures that expand their prosperity. One of the most condemnatory characteristics of the convocation of administrators is to fabricate incitements that make it in the CEO’s finest scrutiny to do what's in the shareowner’s finest interests. Some amalgamations of three primary policies will originate the right financial incentives for CEO’s to maximize the utility of their companies. CEOs should own considerable amounts of company merchandise.
The most robust loop between shareowner wealth and director wealth is a direct possession of shares by the CEO. Most interpreters look at CEO merchandise possession from one of two approaches -- the dollar utility of the CEO’s belongings or the utility he shares as a proportion of his yearly money remuneration. But when testing to recognize the incentive reverberations of stock possessions, neither of these quantifies counts for much. What matters is the proportion of the company’s marvelous shares the CEO owns. By managing a consequential proportion of total corporate equity, superior executives experience a direct and shredded “criticism effect” from changes in retail utility.
The normally delicate link between money remuneration and concerted staging would be less disturbing if the CEO’s possess a large proportion of corporate equity. In fact, it would make perception for CEO’s with big wedges of equity to have their money remuneration less diplomatic to accomplish than CEO with portable stockholdings.
These escalations in remuneration navigated by enhanced venture interpretations would not constitute the conduct of prosperity from shareowners to directors. Preferably, they would honor directors for the escalated victory encouraged by extraordinary risk-taking, endeavor, and potentiality. Rewarding CEOs superior would ultimately mean rewarding the ordinary CEO more. Since the spikes are so elevated, the prospective escalates in concerted accomplishment and the possible obtained shareowners are substantial.
TO- Senior manager
FROM- student name
SUBJECT- REWARD IS A MOTIVATING FORCE AT WORK
Rewards are the key tools to motivate employees, the reward is a motivating force at work. Rewards motivate employees to enhance their performance in an efficient and effective manner. Motivated employees help the organization attain its organizational goals and objectives. Rewards motivate the employees and increase their production efficiency. Rewards play an important role in motivating employees and enhancing their efficiency at the workplace so that they are able to achieve organizational goals. The organization should possess a clear understanding of what motivates the employees. Efficient motivational programs should be made such as recognition programs. Rewards play a vital role to motivate the employees and make them more efficient at the workplace.
Other factors which could motivate people
Other factors that can motivate people at work can be job security, good working conditions, positive environment, flexible working hours, delicate discipline, loyalty and honesty from management, interesting work, career progress opportunities, understanding between employees and management, work appreciation, appropriate wages, the understandable structure of work, the positive climate of the organization, investment in employee recognition programs, maintain the dignity of employees and many more. These are some factors other than rewards that could motivate people at the workplace. Other factors mainly include non-monetary factors. These factors motivate the employees to become their best version. These factors not only motivate them but give a clear path of progression. Recognition is the main element that can motivate employees because acknowledgment is very important for a well-done job. So every employee must be acknowledged for their work done and contributions in the organizations. Even a pat on the back of the employee by the seniors can motivate them. Recognition can be done by providing certificates of achievements or praising them by giving treats etc.
Different generations of workers motivated by different things
Workplace mainly consist of five generations that are:-
Traditionalist that born before 1946, baby boomers that born between 1946 and 1964, generation X that born between 1965 and 1976, generation Y that born between 1977 and 1997, and generation Z that born after 1997.
People of different generations get motivated by different things. There are generational differences in terms of values and preferences. For example, generation Y wants flexible schedules as a non-monetary reward and stock option as a monetary reward. The employees of this generation are motivated by values feedback, positive environment of an organization, time off, etc. while generation Z is motivated by mentorship, constant feedback, transparency as rewards. Baby boomers are loyal, ambitious, work motivated, they prefer monetary rewards but enjoy non-monetary rewards as well. They aspire for non-monetary rewards like recognition, retirement planning, constant feedback. Baby boomers are a goal-oriented generation who get motivated by professional development, expertise values, prestigious jobs, office size, parking space, have their value, and acknowledgment at the workplace. Generation X creates entrepreneurship in them.
They make up the highest percentage of startup founders. People of generation X prefer to work independently; they believe that promotions and rewards should be given on the basis of competence. They value their work. The traditionalist generation believes in honesty. The people of this generation are extremely loyal and honest; they enjoy the non-monetary rewards such as honesty, respect, job security, acknowledgment of their work done, and value of their work.
This shows that different generations of workers are motivated by different things. There is a multigenerational workforce in every organization so the organization should take care of all of them by understanding them, giving them a chance to learn new things, unite teams, understand and value their cultures. Understanding the correct approaches to motivate employees is very necessary for the organization. The main aspect motivates every generation is respecting them and value their work.
(b) factors that determine the validity and reliability of market-rate data in informing decisions on pay structures
Market rate data is analyzed through surveys of data for the same level jobs on the level of pays and benefits in comparable organizations. This concept is particularly used in occupations where duties and job titles are the same such as managerial jobs. In this type of organization, surveys can be used to analyze market rates. The main objective of the market-rate analysis is to obtain an accurate representation of pay, bonuses, benefits, to obtain accurate information regarding market rates. The sources of information on market-rate analysis can be published surveys, club surveys, special surveys, advertisements.
Reliability can be determined through consistency with time, and validity is based on evidence. The reliability and validity of market-rate data can be achieved through strong research, choosing the appropriate method, and conducting research consistently. There are certain factors that determine the validity and reliability of the market rate such as, demand and supply, prevailing market rates, productivity, government regulations, etc. The size of the sample is the critical factor in determining the reliability of market-rate data in informing decisions on pay structures. Small sample sizes are not reliable because they are not able to provide a proper cross-section of the population.
There is no consistency; it changes from year to year. Also, the job with the same titles can vary in job content; it can have different job responsibilities and complexity. Most surveys do not deal with the responsibility and complexity level differences. These surveys can be misleading and results can vary. The size, location, job responsibilities are the major factors that determine the reliability of market-rate data informing decisions on pay structures. The validations factors of market-rate data can be job analysis, job evaluation, pay policy identifications, pay survey analysis, pay structure creations.
The pay structure greatly affects the behavior of the employee, the market rate analysis should be done in an efficient and effective manner because pay structures motivate the employees. Market rate analysis is important in jobs within the organization because of scarcity factors. It is important to know the effect of the market rate on the pay structure. The market rate is basically the rate that is paid by the organization to their employees for similar or identical jobs because they want to compare their rates with market rates. The validation of data depends on the sources of information.
The sources of information on market rates should be accurate: the information provided by the sources, the size of the participant, the quality of job matching information, the degree of up to date, the presentation of data all this information needs to be perfect. The surveys should be done with the help of advertisements, other market intelligence, published data in journals, etc. the sources of market-rate data are local publishes surveys, general national published survey, industrial survey, sector survey, pay clubs, special surveys, published data in journals, job advertisement, analysis of recruitment data, management consultant database, other market intelligence, the advance of these sources are they are readily available, accessible, based on wee researched data, provide good background, focused and precise, focus on a sector where pay rate differs from national rates. These are some factors that determine the reliability and validity of market-rate data in informing decisions on pay structures.
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