Gm591 Final Paper

GM 591: LEADERSHIP AND ORGANIZATIONAL BEHAVIOR COURSE PROJECT A. INTRODUCTION In Honduras, one of the 3 largest private companies is SABMiller, and its also one of the largest brewing companies in the world with a wide portfolio of premium beer brands and leading local brands. It is also one of the worlds largest Coca-Cola product bottlers. My role within the company is within the Marketing Department, in the Market Research division. In the marketing department we have a team made up brand managers, budget analysts, media planners, market research, innovation, sponsorship, public relations, events coordination, etc * In this research-based paper, I will be focusing on the companys reward system for employees and the relationship this has with motivation. Currently, the companys award system for the marketing department is based on each brands trimester performance, and the awards are given to the brand managers. The awards consist of recognition and a cash prize. * According to the Organizational Culture Inventory, SABMillers primary culture style is self-actualizing which indicates that the company values creativity, encourages employees to develop their skills, improve themselves and enjoy their work. The secondary culture style is Achievement, which indicates that the company encourages employees to set and accomplish goals (see figure 1.1). Organizational Culture Inventory Circumplex Figure 1.1 B. PROBLEM STATEMENT * SABMillers high management is not practicing good leadership skills regarding teamwork, employee recognition, acknowledgment of accomplishments, and motivation. The reward system is lacking fairness regarding who gets rewarded and the merits on which it is based. This situation is having an impact on employee motivation and performance, given the fact that team members are responsible for outcomes, yet not acknowledged of their work. Middle management is held accountable for the brands performance, and so it is at this level where the reward system is taking place. But the matter of fact is that there is an entire team working behind the brand manager to reach common goals for the brand. How can high management motivate their teams with a better designed rewards system? C. LITERATURE REVIEW

My companys is very goal oriented, and encourages employees to be creative and to enjoy their work. When it comes to the companys strategies and goals, they do a very good job involving their staff, so that they are part of the process. At the beginning of each fiscal year, the companys headquarters in London passes down the years goals, which get passed down onto each departments vice-president, who then passes them down to their managers, and finally to each staff member. Every employee knows exactly what is expected of them, and at the end of the period they get evaluated on their performance based on the goals they were given. It is an individual evaluation, yet each employees goals are part of a bigger picture. At the end of each trimester, the brands are evaluated on market performance, sales, shares, etc. And when a brand reached the goals set or surpassed expectations, the brand manager gets rewarded. The brand manager oversees that the teams efforts are aligned with the brands strategies, and that the brands objectives are met. The employees motivation is to get a good performance review, which is expressed with a number between 1-6, where 1 means underperformance and 6 means the employee exceeds expectations. The average is 3, which indicates the employee met expectations and reached goals. The performance reviews are held twice a year. When an employee exceeds expectations after 2 performance reviews, with a grade of 4, they are entitled to a small raise in their salary. That means that for a year, they have to give the extra mile, and they might see the benefits in their paycheck with a small wage increase. This is an intent of motivation the company has to support good performance, yet, it is not exactly viewed that way by employees. On the other hand, if the staff accomplishes their individual goals, this directly benefits the brand managers, whether they outperformed or not. What is evaluated is the brands performance, and the quality of goal accomplishment is awarded not to the employees, but to the person who represents the brand; the manager. This is a flaw in our reward system, which causes resentment and affects the employees performance and decreases motivation. According to Pfau and Kay, 2002 : The most successful companies create rewards systems that reward good performance Paying for performance works because it is based on human nature. People do things that are in their own interest. They do not do things that are not in their own interest. When companies structure their reward systems correctly, it becomes human nature for employees to work hard to achieve the company'sand thus their owngoals. It is very important for a goal-driven company to keep their team empowered and motivated because they will perform better

Team performance is what success is based on, and to improve it you must motivate your team by giving them the recognition for their achievements. The key to improving team performance is educating and focusing teams on the factors that are most critical to the business. Team members can then share recognition for their role in the companys success. More than 50% of companies reported that group or team incentives and recognition were the most effective for a team environment (Non-financial Rewards Motivate and Drive Team Performance, IIE Solutions, 1996). An effective reward system is a great way to keep teams motivated, because each employee will be motivated to exceed expectations when their good performance will earn them good feedback, a good performance review and a reward. When an employee is held accountable for achieving objectives, their jobs are enriched and are more satisfied. Motivated employees play a key role in organization success, and past research indicates a positive association between perceptions of empowerment and motivation. A prominent model put forth by Spreitzer (1995) suggests that two major components of control systems will positively affect employee feelings of empowerment performance feedback and performance-based reward systems. Highly motivated employees are a critical factor in the long-term success of many organizations. The results of past research suggests that two key aspects of a firms control system, namely performance feedback and reward systems, can have a significant impact on perceived employee empowerment, task motivation, and performance. (Drake, A., Wong, J., & Salter, S. (2007). For team members to feel they really are part of the bigger picture, involving them in setting goals is only part of the process. They must also be recognized for doing a good job. According to Lawler III, E., & Worley, C. (2006): People dont automatically come to work, continue to work, or work hard for an organization. They need to be motivated to take a job with a company, to come to work each day, to continue to work there, to learn, to perform efficiently, and to accept change. The most widely accepted explanation for why people are motivated to work, perform, learn and change is rooted in what psychologists call expectancy theory. Since organizations get the behaviors they reward, organizations that wish to perform well and change effectively need to create systems that reward both performance and change. Organizations need reward systems that motivate performance, reward change, and encourage the development of individual and organizational capabilities and competencies.

In my company, each year, the brands goals are passed down and converted into specific tasks that need to be completed by each employee depending on their area, and at the end of the period, they are evaluated on it. According to Kerr, J., & Slocum Jr., J. (2005): Reward systems are concerned with two major issues: performance and rewards. Performance includes defining and evaluating performance and providing employees with feedback. Rewards include bonus, salary increases, promotions, stock awards, and perquisites Performance in divergent roles can be assessed by a few basic financial outcomes. Accountability is primarily for results achieved. SABMillers reward system needs some changes in order to be more motivational and effective. It needs to take into consideration the employees performance and the relationship it has with the brands performance and goal accomplishment. To better design the reward system, the company needs to take into account the ideas that employees have regarding rewards and recognitions, that way, they will be striving for what they really want, whether is a public recognition of their work or a monetary bonus. Any performance standards which are to be applied to goals, targets, or behavior changes for remuneration calculations, should be fair and comparable for all employees doing the same job in the same organization. Employees should be consulted about the goals, targets, strategies or behavior changes which will earn the reward, and these should be made as specific and clear as possible (Bowey, Angela, 2005) Rewards systems can vary from monetary compensations, bonuses, recognitions, being in the companys newsletter, being given a day off, praise during a staff meeting, a written letter of acknowledgment by high management, etc. They are all forms of rewarding good performance and can have a strong positive impact on motivation. Management should develop incentive plans that motivate employees using a combination of monetary and nonmonetary incentives that reduce costs and provide short- and long-term benefits. Nonmonetary rewards, such as regular expressions of appreciation and recognition, often motivate employees to reach higher levels of performance. It can be as simple as positive reinforcement from a manager toward an employee who completed a desirable action. Possible nonmonetary incentives include a better structured performance review program, a corporate newsletter that recognizes special events, the public recognition of employees for exceptional performance, flexible work schedules and telecommuting, redefinition of career paths and promotion opportunities, increased involvement of lower-level staff on meaningful projects, and career development opportunities and training.

Companies should reassess existing compensation and incentive programs, and place a greater emphasis on rewarding positive behavior, increasing employee motivation and morale, and improving performance (Martin, K. (2010). SABMiller has 5 company values that reflect the organizations priorities and culture. The first one is Our employees are our lasting advantage. This is a company that values good performance and is concerned about keeping employees motivated and happy, and feeling fulfillment in their jobs. The companys reward system can be an important aspect of the companys values. When it comes to practical implications for managers, the consequences of neglecting any particular drive are clear. , company can gain ground by taking a holistic approach to satisfying employees' emotional needs through its reward system, culture, management systems, and design of jobs. We are all driven to acquire scarce goods that bolster our sense of well-being. We experience delight when this drive is fulfilled, discontentment when it is thwarted. The drive to acquire is most easily satisfied by an organization's reward system -- how effectively it discriminates between good and poor performers, ties rewards to performance, and gives the best people opportunities for advancement (Nohria, N., Groysberg, B., & Lee, L. (2008). D. ANALYSIS When we feel appreciated, we put extra effort into what we do. When we believe in something and feel like a part of it, we consider it ours. But when our efforts are overlooked, ignored, or shadowed, our desire to give that extra mile plunges down. Inspired people respond to the fire of a passion that drives them to make a difference. (Kerfoot, Karlene (2002). Teams function based on common goals, it is what makes them commit, work together, be creative, and achieve success. When a teams goal is achieved, its members, who are individuals, need to be recognized for their input to the success. It is these individuals who are responsible for outcomes, and it is they, who need to be awarded with recognition in order to keep motivation strong. Good outcomes are motivational for a team, for a department, for a company. But individual recognition is motivational for a person. Organizations like SABMiller strongly value their employees, and they show it in many ways. The reward system is an effort of the company to show this, yet it needs to be re-evaluated taking into consideration individual employees efforts and performance. Rather than awarding the person behind a brand, they should focus on rewarding the team behind the brand. And this is where accountability comes into play. Employees can be evaluated directly for what

they were accountable for, or in other words, for their individual goals. This already happens in the company, but now, the rewards should be based on this, because whether individual goals are met, exceeded or underachieved will either make or break the teams achievement. So, rewarding people will keep them motivated, and motivated employees perform better, which means teams goals will be achieved, and for the company it means: success! E. SOLUTIONS The solution to the situation is an improved rewards system for the marketing department. The way the candidates are submitted now, is using the brands performance report. The department is divided into the Beer category and the Soft-drinks category. So, two brands from each area are submitted for the award. So, the brands report is analyzed and the award is given to the winning brand from each area. The departments who organize the logistics of the awards are Corporate Affairs and Human Resources, with input from the marketing vice-president. My recommendation is a reward system in which the employees performance review is the decision factor under which they are submitted for award consideration. Using the brands goals, which then get passed down to specific tasks/goals for each employee. The employee should get an evaluation oh his/her performance and that should be the factor taken into consideration, rather than the brand who achieved goals. F. REFLECTION Undertaking this assignment has been quite a challenge and a great experience, since it taught me the proper way to do research, using sources with strong supporting foundation, and how to support my ideas with them. It has also been an opportunity to understand some negative attitudes in the work environment, and the impact motivation has on performance. I am impressed on how many studies back up the fact that a good reward system can improve the entire companys success, given the fact its employees are the engine behind it. Personally, it has given me a tool on how to be a better person, and how to show appreciation and encouragement to those around me, and the importance of letting people know their role is important in my life. As a future manager, this has opened my eyes on how to be a better leader, and has helped me understand that good results need to be recognized so that they continue to happen.

G. REFERENCE LIST The Five Key Elements of a Total Rewards and Accountability Orientation Pfau, Brue and Kay, Ira (2002) Motivation: the art of putting theory into practice Bowey, Angela,, 2005 From Motivation to Inspiration Leadership Kerfoot, Karlene (2002) (1996). Non-financial rewards motivate and drive team performance. IIE Solutions, 28(3), 6. Retrieved from Academic Search Premier database. Spreitzer, 1995 Nohria, N., Groysberg, B., & Lee, L. (2008). Employee Motivation. Harvard Business Review, 86(7/8), 7884. Retrieved from Business Source Premier database. Kerr, J., & Slocum Jr., J. (2005). Managing corporate culture through reward systems. Academy of Management Executive, 19(4), 130-138. Retrieved from Business Source Premier database. Martin, K. (2010). Cash Motivation Limited, Try Alternate Forms. Pennsylvania CPA Journal, 81(1), 1-3. Retrieved from Business Source Premier database. Drake, A., Wong, J., & Salter, S. (2007). Empowerment, Motivation, and Performance: Examining the Impact of Feedback and Incentives on Nonmanagement Employees. Behavioral Research in Accounting, 1971-89. Retrieved from Business Source Premier database. Lawler III, E., & Worley, C. (2006). Winning support for organizational change: Designing employee reward systems that keep on working. Ivey Business Journal, 70(4), 1-5. Retrieved from Business Source Premier database H. BIBLIOGRAPHY http://www.cerveceriahondurena.com http://www.sabmiller.com

http://www.survey-server2.com/ociuniversity-sso/oci_report.asp The Five Key Elements of a Total Rewards and Accountability Orientation Pfau, Brue and Kay, Ira (2002) Motivation: the art of putting theory into practice Bowey, Angela,, 2005 From Motivation to Inspiration Leadership Kerfoot, Karlene (2002) (1996). Non-financial rewards motivate and drive team performance. IIE Solutions, 28(3), 6. Retrieved from Academic Search Premier database. Chanen, J. (2005). The Amazing RACE. ABA Journal, 91(8), 46-51. Retrieved from Academic Search Premier database. Nohria, N., Groysberg, B., & Lee, L. (2008). Employee Motivation. Harvard Business Review, 86(7/8), 7884. Retrieved from Business Source Premier database. Kerr, J., & Slocum Jr., J. (2005). Managing corporate culture through reward systems. Academy of Management Executive, 19(4), 130-138. Retrieved from Business Source Premier database. Martin, K. (2010). Cash Motivation Limited, Try Alternate Forms. Pennsylvania CPA Journal, 81(1), 1-3. Retrieved from Business Source Premier database. Morrell, P. (2009). What's so rewarding about bonuses?. Building Design, (1857), 9. Retrieved from Business Source Premier database. Drake, A., Wong, J., & Salter, S. (2007). Empowerment, Motivation, and Performance: Examining the Impact of Feedback and Incentives on Nonmanagement Employees. Behavioral Research in Accounting, 1971-89. Retrieved from Business Source Premier database. Robertson, J. (2006). Team motivation must still recognize individuals. Employee Benefits, 10-11. Retrieved from Business Source Premier database. Lawler III, E., & Worley, C. (2006). Winning support for organizational change: Designing employee reward systems that keep on working. Ivey Business Journal, 70(4), 1-5. Retrieved from Business Source Premier database

Locke, E. (2004). Linking goals to monetary incentives. Academy of Management Executive, 18(4), 130133. Retrieved from Business Source Premier database.