Green Fingers Garden Centre Rewarding Management

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Table of Contents

Executive Summary
Introduction
Analysis
Recommendation
Conclusion
Reference List

Executive Summary

To create a comprehensive reward system for Green Fingers, one must take into account the organizational structure, the job market, and the needs of the employees. Equally important is drawing positive practices from academic literature and accomplished specialists in the field. Numerous articles have been written on the topic of corporate reward systems over the last half a century, and they seem to agree on very little. The first important takeaway from the theory would be to divide the workforce into several job families.

These families represent unique skill sets and career treks that employees are expected to adhere to while working for Green Fingers. Using one reward system for all staff could alienate some of the workers and make the rewarding process too unwieldy. The managerial and sales families employ white-collar knowledge workers, who rely on incentive programs to a higher degree than blue-collar workers. Their benefits packages will have to be negotiated on a person-by-person basis and continuously monitored to ensure efficiency.

The incentives that can positively affect employee morale and productivity can be tangible financial, tangible non-financial, intangible explicit, and intangible implicit. From an above-average base pay to emotionally investing in the success of the company, each of the incentive strategies affects different workers in different ways. There is evidence that combining incentives is exceptionally effective, but adding too many can be counter-productive.

A popular and effective type of tangible benefits are company shares and stock options, that motivate employees to commit more time to the company, and invest them in the company’s success. An implicit and intangible incentive that motivates workers very effectively is the prospect of a raise or a promotion for hard work.

Research also suggests that most employees will appreciate simple recognition of their efforts from their superiors, and it will make their time with the company more pleasant, which will benefit everybody involved. Competitive base pay will attract employees in the market full of minimum wage positions. As the garden center will be situated in the Outer London area, higher base wages will help offset high rent and living expenses.

Introduction

This report aims to assess the case of Green Fingers Garden Centre and create a reward structure. First, in the Analysis part, broad suggestions will be presented, according to the organizational context of Green Fingers garden center and the local job market. Second, in the Recommendations part, a more detailed strategy will be presented, which includes a robust literature review. The report is a preliminary recommendation, and anything listed in it is subject to change according to the emergent business needs.

Analysis

The first step of effective reward management would be to split the workplace into several job families. Five families naturally arise from the projected Green Fingers staff list: the managers, the kitchen staff, the waiting staff, the sales force, and the outdoor staff. These families represent unique skill sets and career treks that employees are expected to adhere to while working for Green Fingers.

According to Reily (2004), this approach fosters flexibility and avoids lumping employees with different responsibilities and requirements into one shared system. Using one reward system for all staff, not accounting for the breadth of their duties, diversity of their work environments, and personal benefit preferences could result in the system either being unable to serve their needs or being needlessly complex to implement and track.

There exists a clear divide between white-collar and blue-collar job positions in Green Fingers garden center. Kauhanen and Napari (2012) state that white-collar employees rely more on traditional incentive programs, and that theirs are more robust and flexible. Implementing different reward programs for various job families could be beneficial from the position of the blue-collar and white-collar divide.

Kuvaas, Buch, Gagné, Dysvik, and Forest (2016) found that high base pay is a good motivator on its own, while variable pay according to individual performance does not produce significant results. Paying a higher flat rate can make employees feel unconditionally valued, reduce turnover, and increase their effort.

They go on to say that having managers explain the important individual roles of the workers in the company to create a sense of belonging might produce better results. Meeting the psychological needs of the people, motivating them through job design, and giving them relational rewards works significantly better than a variable pay scheme.

Van Triest (2018) also supports the assertion that higher base pay is a positive influence on employee motivation. He found that the base pay has the most impact on the employees’ willingness to work unpaid overtime, while the explicit pay-for-performance rewards were not. Implicit rewards, such as the possibility of future promotion, are also positively related to effort and willingness to work unpaid overtime.

His research found that employees often emotionally invest in their job when it requires hard work to be recognized and promoted. Employees might exert more effort to receive these implicit rewards, such as a raise or a promotion. No matter what the case is, it is clear that an explicit pay-for-performance incentive program does not create this commitment.

To determine competitive base pay, the reported salaries in other UK garden centers were analyzed. The Frosts garden center is reported to employ customer service supervisors, gardeners, and sales assistants at a rate approximating the national minimum wage for adults (Average hourly rate for Frost’s garden center employees in the United Kingdom, 2019). Gates garden center is known to hire cooks at slightly below £9 (Gates garden center salaries in the United Kingdom, 2019).

Notcutts garden center is known to employ chefs, line cooks, merchandisers, sales associates, gardeners, and administrators at a rate approximating minimum wage (Notcutts garden center salaries in the United Kingdom, 2019).

They also employ restaurant managers, kitchen managers, and head chefs at £10-12 per hour. Wyevale garden center employs catering assistants, cooks, team leaders, managers, gardeners, and porters at a rate corresponding to the national minimum wage for people aged 21 to 24 (Wyevale garden center salaries in the United Kingdom, 2019). It appears that most frontline staff in the garden centers in the United Kingdom receive minimum wage or below.

A notable feature of Green Fingers garden center is its location, which is in Kingston. Kingston belongs to the Outer London area, and should thus be subject to London weighting. London weighting is an essential addition to a salary that should ensure adequate living conditions for a worker in a high living expense environment (Darge, 2019).

The rent cost alone exceeds the minimum wage in London, which makes a competitive base pay even more important to the workers (London allowances, 2017). Hirsh (2016) asserts that London weighting is relevant for all employees who earn less than £40,000 a year, which encompasses all garden center employees. He suggests a flat £6000 baseline, which would mean approximately £3 extra per hour.

Additionally, if up to a quarter of Green Fingers employees are expected to be part-time workers, a suitable part-time rate must be determined. According to Glassdoor, the average part-time rate in the London area is £8 per hour (Part-time salaries in London, UK Area, 2019). Taking all that into account, a competitive and attractive above-market-average base pay for all job families must start at £10. Aside from that, the employer must deduct 3% of the employee’s salary from their pension scheme (Contributions and funding, 2019). This contribution is regulated by the government and non-negotiable.

Green Fingers garden center has the ambitious goal of becoming the biggest company in the market. From the point of view of an HR practitioner, that goal requires well-motivated workers that strive for success instead of being miserable in a dead-end minimum wage job. A reward strategy that would foster emotional investment would have to start with a high unconditional base rate. Five job families would create five distinct career treks with clear routes to promotion.

These families naturally divide the workforce into white-collar and blue-collar workers, which would require slightly different handling. The next section will describe the literature on employee motivation and offer a more particular strategy.

Recommendation

There is some disagreement in the literature on the topic of what motivates employees. Generation Z is reported to value money above all else when considering a career (‘How to Hire, Develop, and Inspire Gen Z’, 2019). Financial insecurity is reported to be the most significant motivator for Generation Z in the United Kingdom to seek employment.

In turn, Kohn (1993) asserts that incentive plans do not work as intended for various reasons, chief among them the fact that money does not motivate employees to work. He also stated that individual incentives ruin workplace relationships and have a somewhat manipulative and punitive aspect, producing short-term compliance rather than long-term motivation. However, this standpoint is not very common, and other researchers assert that there is an association between benefits and employee effectiveness and motivation.

They do, however, disagree on finer points, such as the exact nature of the incentives, and their effectiveness. Some assert that there is a high level of association between all types of benefits and employee performance (Salah, 2016).

The adoption of all possible kinds of rewards would work the best, according to this point of view. Lupton, Rowe, and Whittle (2015) assert that traditional financial rewards are significantly less effective than intangible rewards and that Generation Y workers would prefer praise and recognition over material goods. Kumar, Hossain, and Nasrin, (2015) swear by non-material rewards as well, but also recognize the value of financial incentives.

They claim that both types have an equal place in the reward system. Thibault Landry, Schweyer, and Whillans (2018) come to similar conclusions and advise managers to combine tangible financial and non-financial rewards with intangible ones, such as recognition, praise, and an engaging workplace atmosphere. The authors recommend that managers use all types of incentive programs consciously to foster the feelings of autonomy, relatedness, and competence in their workforce.

That point of view is supported in other published articles on the topic. Schlechter, Thompson, and Bussin (2015) argue that non-financial rewards, such as career advancement opportunities and work-life balance, are more important for some workers, specifically white-collar knowledge workers. They also claim that above-average base pay is not an effective motivator for most employees, which directly contradicts several other cited papers. Women are also reported to be more attracted to non-financial rewards than men, which is useful information for managers concerned with equity.

Another way to reward employees is with shares of the company. The stock-based compensation can motivate the employees to stay with the company for a more extended period until their shares are vested. It also creates an extrinsic motivation for employees to work and strive for success, because the better the company does, the more their shares are worth (‘Stock based compensation’). This incentive also does not require money, which could be preferable to a young or small firm with low-profit margins.

According to Conyon and Freeman (2002), this type of compensation was popular in the UK in the 1990s and was positively related to employee productivity. As with any other kind of reward system, this one is not a one-size-fits-all solution and must be used consciously.

A vital dimension of the reward structure is the intended recipient. The rewards may be aimed at the individual or the team. According to Babcock, Bedard, Charness, Hartman, and Royer (2015), there may exist compelling reasons for the effectiveness of team-based incentives, as people become more conscious of other people’s payoff.

However, it is not clear whether the effect remains significant in the long term. According to Howard, Turban, and Hurley (2002), there might exist a connection between overall company performance and both individual-based and team-based monetary reward strategies. There also may be a connection between team performance and intangible social capital rewards. A possible way to remedy that disconnect may be the adoption of team-based and non-financial reward systems.

On the other hand, Pendleton and Robinson (2016) assert that both individual-based and team-based rewards are weak individually, but become significantly more effective in conjunction. If profit-sharing incentives are added to the mix, the positive effects improve even further, which speaks to the effectiveness of creating a multiple-incentive program. That said, the authors warn against using too many incentive programs, and single out the combination of individual pay by the result and profit-sharing plans.

The managers and the sales force of Green Fingers garden center are white-collar knowledge workers that would require a more sophisticated rewards system. As explained previously, the most effective ways to bolster the sales force would be profit sharing combined with individual pay for performance schemes.

However, even more, effective benefits would be intangible and implicit, such as a positive workplace environment, a sense of belonging to a common cause, and emotional investment in the success of the company. Awarding white-collar employees with small shares in the company would be very effective if done at higher levels to foster organizational loyalty. It will also show the owners’ confidence in their business, which might attract additional investments and help Green Fingers grow. However, there exists another caveat that must be taken into account in the case of knowledge workers.

The current generations’ preference for discretion, autonomy, and competence requires them to be creative in the workplace. The responsibilities of knowledge workers, by definition, require them to think. Malik, Butt, and Choi (2014) assert that creativity can only be incentivized in individual employees if they feel like the incentives are important to them personally. The presence of unnecessary benefits that the employees do not care about can actively harm their performance.

Therefore, the tangible financial and non-financial benefits package must be negotiated with each employee personally. Constant feedback must also be collected to introduce beneficial practices and slash unnecessary ones. The white-collar job families should feature highly customizable pay structures, instead of a one-size-fits-all solution. Some employees may prefer a higher flat rate instead of profit-sharing, and they should be given that option.

The other job families in Green Fingers are more blue-collar in nature, and thus do not require as robust an incentive program as the rest. They would benefit significantly from implicit and intangible rewards that come from conscious management, explicitly explained opportunities for raises and promotions, and recognition of hard work from their superiors.

The same options for stock-based benefits should be offered with promotions, but they need not be the default. The reward structure for blue-collar families should emphasize career advancement and base pay over other tangible benefits. Team-based pay for performance schemes should also be implemented to stimulate both teamwork and individual success.

Conclusion

There is no consensus in the academic spheres on what reward system is the best. Some argue that incentive packages do not work at all, others swear by intangible benefits; some say that above-average base pay is an excellent motivator, others disagree. It appears that every business has to make its own choice regarding what benefits to offer its employees.

Green Fingers garden center is most likely to succeed if it negotiates individual benefits with the knowledge workers and offers stock-based incentives with promotions to stimulate organizational loyalty. Additionally, the most important benefit would be a healthy workplace atmosphere and friendly managers.

Reference List

Average hourly rate for Frosts Garden Centre employees in the United Kingdom (2019) Web.

Babcock, P., Bedard, K., Charness, G., Hartman, J., & Royer, H. (2015). ‘Letting down the team? Social effects of team incentives, Journal of the European Economic Association, 13(5), 841–870.

Conyon, M. J. and Freeman, R. B. (2002) Shared modes of compensation and firm performance: UK evidence. London: Centre for Economic Performance.

Contributions and funding (2019) Web.

Darge, G. (2019) London weighting: what is it and who is entitled to it? Web.

Gates Garden Centre Salaries in the United Kingdom (2019) Web.

Hirsch, D. (2016) London weighting and London costs – a fresh approach? London: Trust for London.

Howard, L.W., Turban, D.B., and Hurley, S.K. (2002) ‘Cooperating teams and competing reward strategies: Incentives for team performance and final productivity’, Journal of Behavioral and Applied Management, 3(3), pp. 248-263.

How to Hire, Develop, and Inspire Gen Z: A Study from The Workforce Institute at Kronos (2019) Web.

Kauhanen, A. and Napari, S. (2012) ‘Performance measurement and incentive plans’, Industrial Relations: A Journal of Economy and Society, 51(3), pp. 645–669.

Kohn, A. (1993) ‘Why Incentive Plans Cannot Work’, Harvard Business Review.

Kumar, D., Hossain, Z., and Nasrin, S. (2015) ‘Impact of Non-Financial Rewards on Employee Motivation’ Asian Accounting and Auditing Advancement, 5(1), pp. 31-39.

Kuvaas, B., Buch, R., Gagné, M., Dysvik, A., and Forest, J. (2016) ‘Do you get what you pay for? Sales incentives and implications for motivation and changes in turnover intention and work effort’, Motivation and Emotion, 40(5), pp. 667–680.

Lupton, B., Rowe, A., and Whittle, R. (2015) Show me the money! The behavioural science of reward. Web.

London Allowances (2017) Web.

Malik, M. A. R., Butt, A. N., and Choi, J. N. (2014) ‘Rewards and employee creative performance: Moderating effects of creative self-efficacy, reward importance, and locus of control’, Journal of Organizational Behavior, 36(1), pp. 59–74.

Notcutts Garden Centre salaries in the United Kingdom (2019) Web.

Part Time Salaries in London, UK Area (2019) Web.

Pendleton, A. and Robinson, A. (2016). ‘The productivity effects of multiple pay incentives’, Economic and Industrial Democracy, 38(4), 588–608.

Reily, P. (2004) Job families: An integrating approach to reward and development? Web.

Salah, M. R. A. (2016) ‘The Influence of Rewards on Employees Performance’, British Journal of Economics, Management & Trade, 13(4), pp. 1-25.

Schlechter, A., Thompson, N., and Bussin, M. (2015) ‘Attractiveness of non-financial rewards for prospective knowledge workers: An experimental investigation’, Employee Relations, 37(3), pp. 274-295.

Stock Based Compensation: A form of equity remuneration (non-cash) (no date) Web.

Thibault Landry, A., Schweyer, A., & Whillans, A. (2018). Winning the War for Talent: Modern Motivational Methods for Attracting and Retaining Employees. Compensation & Benefits Review, 00(0).

Van Triest, S. (2018) ‘Are Performance-Based Incentives Related to Effort? Evidence from Large-Scale Survey Data’, SSRN Electronic Journal.

Wyevale Garden Centres job reviews (2019) Web.

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