Reward Management in a Green Fingers Company

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Table of Contents

Executive Summary
Introduction
Analysis
Recommendations
Conclusions
Reference List

Executive Summary

The case concerns the Green Fingers garden centre in Kingston, which is set to open in three months. The report focuses on the development of a reward strategy suitable for the company’s internal and external environment. Research showed the importance of supporting high-quality customer service among staff, thus suggesting the relevance of the strategic and total reward approaches to reward planning.

The suggested base pay structure takes into account workforce specifications and provides guidelines on setting pay ranges and midpoints. Additionally, recommendations on bonuses, pensions, and other benefits are provided. By implementing the recommendations from the report, the centre will be able to attract and retain competent employees, thus achieving high performance outcomes.

Introduction

The case study focuses on a new company that is a chain of garden centres in the United Kingdom. The shop in Kingston is set to open in three months and will include both a garden centre and an on-site cafe. To succeed in this context, the organisation will need to attract skilled workers and motivate them to provide high-quality service to customers. One of the main components of a human resources strategy that could help to address these goals is reward management. Hence, the present report will seek to analyse the information in the case study and supporting sources and provide a list of recommendations on reward management. The objectives of the report are to analyse the environmental and organisational context in which the company exists and propose a reward strategy, including base pay, variable pay, benefits and non-financial rewards.

Analysis

Environmental Context

In order to analyse the environmental context in which the organisation operates, it is essential to gather data on the garden industry and the labour market in the United Kingdom. A report from Oxford Economics to the Ornamental Horticulture round Table Group provides an accurate representation of the industry. Based on the figures, the contemporary garden industry enjoys stable growth, and thus the garden centre has a high potential for growth and profitability. According to the authors, over half of adults in the United Kingdom engage in some form of gardening in their leisure time (Ismail and Tran, 2018).

It is estimated the UK households spent about £7.5 billion on garden goods in 2017, with an average household spending of over £150 annually (Ismail & Tran, 2018). Based on these data, there is a stable demand for garden products.

Another important source for review is the Horticultural Trades Association, which provides data about existing industry players and consumer trends. HTA (2020) estimated number that there are about 2,300 garden centres in the United Kingdom. Although this suggests moderately high competition in this sector, new players can still succeed in the market by covering new geographic areas and offering high-quality products. The two largest customer groups in this market are elders and seniors, who constitute a combined 46% of garden retail spending in the United Kingdom and represent 14% and 17% of the country’s households, respectively (HTA, 2016a; 2016b).

Customers from these groups make around five visits to garden centres annually, and garden centres location and quality are important to them (HTA, 2016a; 2016b). Hence, the market environment is generally favourable for garden centres, but service quality is imperative for the company to succeed.

Organisational Context

In the analysis of Green Fingers’ organisational context, it is best to use the information provided in the case study as it allows making conclusions about its human resources needs. The first point that should be taken into account is that the store in Kingston will employ a relatively high number of employees and have a variety of positions. According to the case, the centre plans to hire a Centre Manager, two deputies, four departmental managers, a small number of administrators, 30 sales staff, team leaders, 12 kitchen and waiting staff (there will be a cafe on-site), and outdoor staff. These staff needs create a multi-level organisational structure, which means that there may be a need to review compensation and pay for individual positions to attract more qualified staff. Therefore, the approach to planning rewards should be rather flexible so that base pay and benefits could be adjusted for principal employees if required.

Secondly, the structure of the planned workforce includes many employees who will be working with customers directly, including sales and waiting staff. These employees will be largely responsible for providing customer service, thus having an important influence on sales and customer loyalty. The nature of positions requiring customer service orientation affects the proposed rewards strategy since workers might need financial motivation to deliver high-quality service.

For this reason, fixed salaries would likely to cause challenges among these workers. As explained by Chung (2015), having a fixed salary might cause a deterioration in morale and work ethic of sales employees, leading them to slack off and fail to meet performance requirements. This article is based on scholarly research, as well as the author’s expertise in business and sales, meaning that the conclusion is likely to be relevant in Green Fingers’ organisational context. Based on this information, addressing motivation and service quality as part of a reward strategy is crucial to the centre’s long-term success.

Overall Reward Strategy

The analysis of the current situation in the organisation and its wider organisational context shows the need for applying strategic reward and total reward approaches. A strategic reward is defined by the Chartered Institute of Personnel and Development (CIPD, 2019c) as “the design and implementation of long-term reward policies and practices to support and advance both the organisation’s objectives and employee aspirations” (p. 1).

The concept of total reward posits that a reward system should be holistic and cover “all aspects of work that are valued by employees, including elements such as development opportunities and/or flexible working opportunities, in addition to the wider pay and benefits package” (CIPD, 2019c, p. 1). Both strategies can be integrated in order to ensure that the reward system aligns with the centre’s strategic goals while ensuring higher levels of employee motivation and commitment. As part of the strategic reward system, the company is recommended to use a competitive base pay structure with variable, performance-dependent benefits. As part of the total rewards strategy, the company should also provide opportunities for development, recognition, and other non-financial benefits to employees on all organisational levels.

Recommendations

Base Pay Structure

In order to set a base pay for various employees, it is important to determine an appropriate pay structure. The pay structure should identify the various grades of pay based on organisational levels and the range of wages or salaries for each grade of employees. Based on the structure of the workforce and the anticipated types of employment offered (e.g. part-time and full-time), the base pay structure is proposed in Figure 1.

The rationale for the structure lies primarily in the nature of work of the different types of staff. The employees earning higher levels of base pay are primarily administrative or management employees, whereas the lower bands represent the staff who are likely to work part-time. The proposed structure allows progression from one level to another for qualified staff, and the progressions would result in the increased base pay grade due to the shift in role and responsibility.

A hybrid type of pay progression, such as service plus performance, would contribute to organisational goals by stimulating workers on various levels to achieve performance outcomes. The midpoints on every grade should be determined based on the job market evaluation for a respective position (CIPD, 2020a). This resource shows how job evaluation and market prices contribute to pay strategy and assist organisations in attracting and retaining employees.

Variable Pay Schemes

Variable pay includes the types of compensation that vary on individual or team levels despite the same base pay. According to a report by CIPD (2019b), performance-related variable pay schemes are most often used in private sector services, including retail and catering. The report covers pay structures and rewards management across the United Kingdom, making it relevant to the selected context.

Due to the nature of the business, a performance-related variable pay scheme would be most appropriate since it would motivate all staff members to work towards achieving targets. Individual results-based bonuses thus will be beneficial for staff on all levels of the organisation. On the one hand, this variable pay option would ensure that financial rewards align with business goals and targets. On the other hand, it would prevent the demotivation of employees since every worker will receive their bonus.

Benefits and Pension Schemes

The need for benefits is justified mainly by the legal requirements of employment in the United Kingdom. Hence, the company will need to provide all workers with annual leave, sick pay, parental leave and redundancy pay. Additionally, it will be useful to consider some welfare and status benefits for employees at the higher levels of the pay structure, such as managers and executives. For example, providing senior management with health screening and private health insurance could contribute to the psychological contract.

According to Noe et al. (2017), a psychological contract describes the mutual expectations of employees and employers and has a moderating effect on affective commitment. Since potential employees would expect the company to offer additional benefits to senior managers, fulfilling this expectation could attract more valuable candidates during the recruitment process.

There are also some benefits that could be offered to staff at all levels of the company to encourage the recruitment of skilled staff. Since the garden centre is located outside of Kingston, it is likely that local employees will need to travel by car or bus every day. As this entails additional travel expenses, skilled candidates who have other options in sales and catering may choose a different workplace. Providing compensation for transport fees would thus make Green Fingers in Kingston more attractive to potential employees.

Pension schemes are part of the company’s value proposition and could be motivational for employees planning a career in Green Fingers. Nevertheless, the potential risks of defined benefit schemes make them unfavourable for the company. Using a defined contribution scheme can help to address employees’ needs without excessive risk. This pension scheme would still be attractive to full-time employees as it will provide them with sufficient career flexibility.

Non-Financial Rewards

Non-financial rewards have become particularly important in the past years since they impact corporate culture and affective commitment. As explained by Noe et al. (2017) non-financial rewards can include various practices, including recognition, career development and work-life balance support. In the present case, some non-financial rewards can be applied to foster motivation and commitment while maintaining a positive workplace climate.

First of all, recognition schemes such as employee of the week could be used for sales staff to promote their performance. Secondly, flexible working hours could be beneficial for long-term, part-time workers, since they would give them more freedom to arrange work around their other commitments, such as education or family. Thirdly, career development planning would be useful for employees on various organisational levels. It could be implemented in the form of short consultations with managers, during which the employee’s growth is assessed, and their possible future in the company is mapped. Providing career development planning as part of non-financial benefits could potentially help to ensure employee commitment to the organisation and lead workers to develop their talents and skills.

Conclusions

On the whole, the paper presents the analysis of the external and internal environment in Green Fingers and provides recommendations on the reward strategy. The findings show that the horticultural industry in the United Kingdom is a potentially profitable environment and that customer service plays an important part in business success in this sector. Based on these results, strategic and total reward approaches to reward planning were used. The base pay structure takes into account the nature of the organisation, including its hierarchy. Bonuses, benefits, and non-financial rewards were also proposed in the context of Green Fingers.

The recommendations offered in the paper can be used by management as a guideline for establishing the centre’s reward policy, thus supporting administrative decision-making and resourcing. Implementing the recommendations would support effective reward practices by helping to attract competent employees to all positions, establish a healthy corporate culture and maintain employee commitment.

Reference List

Chung, DJ (2015) ‘How to really motivate sales people,’ Harvard Business Review. Web.

Chartered Institute of Personnel and Development (2019a) Job evaluation and market pricing. Web.

Chartered Institute of Personnel and Development (2019b) Reward management: focus on play. Web.

Chartered Institute of Personnel and Development (2019c) Strategic reward and total reward. Web.

Horticultural Trades Association (2019a) A: gardening elders. Web.

Horticultural Trades Association (2019b) B: garden prouds. Web.

Horticultural Trades Association (2020) Garden industry statistics. Web.

Ismail, O and Tran, A (2018) The economic impact of ornamental horticulture and landscaping in the UK. Web.

Noe, RA, et al. (2017) Human resource management: gaining a competitive advantage. 3rd edn. New York, NY: McGraw-Hill Education.

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