Introduction of Analyse The Effectiveness Of Pay And Reward Strategies At Amazon Fulfilment Assignment
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The purpose of this research is to critically analyse the impact of pay and reward systems on the organization's effectiveness, placing particular emphasis on the following three aspects; intrinsic vs extrinsic motivators, the impact the work environment has on motivation, and the influence of pay and reward on career development.
Themes of strategic rationale and theoretical justification
The term ‘motivation’ has been profoundly explored, nevertheless it is important to note that it is not a one-size-fits-all concept; but rather, a complex contrivance consisting of a number of components (customarily better described using distinct theories) (Anderman and Dawson, 2011). Thus, Anderman and Dawson (2011) have accordingly defined motivation as “the process whereby goal-directed activity is instigated and sustained”. Similarly, Huczynski and Buchanan (2007) remarked motivation as being “the cognitive decision-making process through which goal directed behaviour is initiated, energised, directed and maintained.” In the coming sections, a thorough examination conducted through a number of theories and lenses will be commented upon.
Employees, to say the least, are one of the most valued resources within organizations of any respect. Therefore, in today’s world, equitable organization’s want their employees to profess a great measure of satisfaction with regards to the payments and rewards they receive from those whom they which they are employed under. Consistent salaries and wages, additional financial benefits, acknowledgement from the employers etc. are the major expectations an employee generally envisages from an organization. The absence of any of these facilities may cause employees to be dissatisfied with their jobs. Employees desire the jobs which they have to be interesting, enjoyable and provide them with passion for what they do. Personally, perceiving their work as something that adds value to the overall progress of their company/ organisation is also a vital contributor adding in employee work performance. In his book, Drive: The Surprising Truth About What Motivates Us, Daniel Pink goes further and explains that motivation goes deeper than what we see. People often have an appetite for more than just external rewards(extrinsic motivation) instead, they seek to feel a sense of “autonomy, mastery and purpose”(intrinsic motivation) Pink (2015). These three components will be further explained throughout the report and will moderately highlight how intrinsic motivation could have a more positive impact on the workplace.
Aims and Objectives
- The purpose of this study is to assess the effectiveness of Pay and reward strategies at Amazon Fulfilment.
- Effectiveness of Work Environment in motivating employees at Amazon Fulfilment
- Effectiveness of balance of intrinsic and extrinsic motivators with staff at Amazon Fulfilment
- The extent to which Total Reward could be improved at Amazon Fulfilment.
In 1990, Pardee, R. L published a paper in which they sustained that job satisfaction, motivation, and reward systems are included in one area of organisational theory. The author further claims that motivation is “the strongest influence on this area because it overlaps into both of the other components.” Korzynki (2019) confirmed that both the intrinsic motivators and extrinsic motivators are important for organisations to allow them to certify employee motivation. Intrinsic motivation is defined as “the desire to perform an activity for its own sake, to experience the pleasure and satisfaction inherent in the activity”, whereas extrinsic motivation, on the other hand, is often seen as “the desire to perform an activity with the intention of attaining positive consequences such as an incentive, or to avoid negative consequences such as a punishment” (Kuvaas & Buch, 2017).
According to Pink (2015), historically speaking, the basic premise about human behaviour was ‘simple’ and ‘true’. People’s instinct was supposedly only to ‘get by’ and survivor which ultimately directed most of their activities i.e., the basic needs being the main driver of people's behaviour (Pink, 2011). Yet, Taylor (2017) contends that determining what people are motivated by is almost impossible, and in all actuality, what people are motivated by can only be hypothesized. The only reasonable assumption would be that money was the key motivator for early generations due to their circumstances (e.g., lack of benefits, different culture). In the past, speculation arose that financial support and pay raises would be a good way to motivate people. However, the notion of motivation has shifted since the transition from an earlier generation to modern society. Furthermore, Pink emphasizes the idea that the convenience factor of motivation is outdated in organisational environments of today. He believed that extrinsic forms of motivation do not meet the objectives of the organization appertaining to the areas of creativity and innovation, and instead could invoke harm. As a solution, Pink suggests that organizations should switch from extrinsic to intrinsic forms of motivation that include three basic characteristics: autonomy, mastery, and purpose. These elements have been elucidated upon, respectively, autonomy- the desire to direct our own lives; mastery– the urge to make progress and get better at something that matters, and lastly, purpose- the yearning to do what we do in the service of something larger than ourselves (Pink, 2015).
Herzberg’s hygiene factors and Maslow’s hierarchy of needs are two classical theories that attempt to explain motivation in the workplace, and simultaneously deal with factors that cause either job satisfaction dissatisfaction (Pardee, 1990). In 1959, Frederick Herzberg developed his well-known Two-Factor Theory. Based on comments from 200 engineers and accountants in the United States about their sentiments about their working environments, Herzberg developed two sets of elements in determining employees' working attitudes and level of performance, named Motivation & Hygiene Factors (Yusoff, Kian, and Idris, 2013). Motivational factors are intrinsic factors add to areas such as employee job happiness, whereas hygiene factors are extrinsic factors that prevent employee discontentment. Herzberg further elaborated that having a complete supply of hygiene factors does not guarantee employee work containment.
The Two-Factor Theory bears resemblance to Maslow's Hierarchy of Needs but provides additional factors in the process of assessing how employees are motivated at work. This idea asserted that addressing individuals' lower-level demands (extrinsic or hygiene elements) would not inspire them to put in the effort but would only keep them from being unsatisfied. However, in order to motivate employees, the higher-level needs (intrinsic or motivational elements) must be met. As an implication, the result attained by organizations that adopt this approach is that simply addressing workers' extrinsic or hygienic criteria’s will merely keep them from becoming actively dissatisfied--but will not drive them to invest extra effort towards achieving higher performance and accomplishments. Organizations should focus on providing more intrinsic, motivating instigations for their staff (Yusoff, Kian, and Idris, 2013).
According to Long and For (2015), the work environment is one of the most crucial factors determining employee interest. The author emphasises the fact that the environment in which the employees are working in should be safe, comfortable, and based on the needs and wants of the employees. For example, the productivity of an employee in a safe working environment is superior in efficacity to employees who feel threatened at the time of working. Manolopoulos (2017) ratified that there is a direct relationship between the type of work environment in which an employee is working in and the level of employee motivation. Both studies have failed to focus on the negative impact of being unable to ensure a convenient work environment. In these studies, both authors focused on analysing the reasons for which the comfort of the workplace should be ensured. Mitigation of this limitation of the literature is a primary objective of this study.
When it comes to pay and reward, the term 'compensation' is frequently used in place of 'pay' or 'remuneration.' As reported by Armstrong (2002), the only problem with ‘pay’ is that it suggests employee compensation is solely about making up for the unpleasant reality that individuals have to work for a living. Although this principle is true in many circumstances, it creates an unsuitable foundation for a pay philosophy that--can and should adopt the stance that people ought to be valued according to their contribution and competence-- not just compensated because they have to come to work (Armstrong, 2002). Thus, the way in which employees are rewarded will impact not only their presuppositions and convictions about work, but also their career progression- is work purely for earning a living or does it extend beyond that purpose?
There are ways using which the effectiveness of the rewarding process can be improved. Campos-Garcia and Zuniga-Vicente (2019) endorsed that types of rewards received should be established based on the needs of the individual employees. Such a strategy would aid business owners exceptionally in their pursuit of surety in creating passion-filled, enthusiastic, and happy employees. Another scheme which could be utilised to the advantage of both the employee and employer would be endeavouring to match rewards with the expectations of employees. This would allow for both happy and productive employees, which would ultimately result in pleased employers. Also, undertaking the task of developing a success criteria grands opportunity to achieve previously stated and sought-after goals. Putting smart processes, programs, and procedures in place (which are available by the description of the heads of employment systems) would strengthen business relationships (and businesses themselves) via reaffirming the importance of employee motivation.
From the literature review analysis, it can be seen there are gaps in previously conducted. Those gaps are related to analysing the impact of being unable to ensure an effective work environment and, the types of rewards which would suit a business best. The objective of the following research is to reinstate the value of neglected areas within this subject and that of other potentially useful propositions.
According to Greener (2008) there are two ways in which research can be conducted: the first method is described as the positivism approach, and the second one is called the interpretivism approach. Greener (2008) associates a positivist approach with the natural science research involving empirical testing i.e., emphasising the idea of experimenting and testing hypotheses to prove or disprove them (deductive), and then generating new theories by combining facts to form ‘laws’ or principles (inductive). By contrast, the interpretivist approach stands for the validity of subjective thoughts and concepts. As opposed to positivism, this approach attempts to perceive the world through the eyes of the people being studied, allowing for multiple perspectives of reality, rather than ‘one reality’. However, because researchers are human, the results of the research are not immune to fallibility or bias (Greener, 2008). Thus, since we cannot eliminate all prejudice, we must be transparent about perspectives that may colour our study, so that readers understand that we are not in pursuit of truth, but rather, an interpretation of reality in a certain context.
Considering what has been discussed, the following study has adopted an interpretivist philosophy firstly because of time and resource limitations; and secondly, the research aims to present a strong case of particularisation within the context of organisational efficiency. Nonetheless, there are a few shortcomings of this approach, mostly related to its subjective nature and vulnerability to human error. (Pham, 2018). Contrastingly, the primary research could have been more effective because it is focused on the sampling and accuracy of the data. The latter form of research would not be as detailed, nor could it prove precision.
As previously mentioned, according to Greener (2008), a deductive approach starts with a theory/ perceived idea, which then gradually develops hypotheses based on theories related to the question, whereas, on the other hand, an inductive perspective seeks to draw out the theory from the research, i.e., starts by looking at the research. Therefore, an inductive approach was used and established to be the most appropriate method because of research philosophy (interpretivism); as it is based on existing theory (Panneerselvam, 2014). The theories which will be followed have been analysed in the literature review. Moreover, it can add profitable knowledge and information to base the study on. However, the only problem is that the researcher had a limited chance to focus on further developing new knowledge.
The case study strategy has been followed by the researcher to conduct this task. This is the strategy that was most helpful for the researcher to focus on Amazon Fulfilment only (Mustafa, 2010). The reliability and validity of research outcomes have been increased because of this. All the data which the researcher collected was based on Amazon Fulfilment.
Data collection and analysis:
Only secondary data has been used for conducting this study. The collection of these types of data is an effective way to compile statistics in this short time period (Kumar, 2012). The sources from which secondary data for this project was collected includes the website representing Amazon, annual reports, logistic reports and published journals on this topic. Qualitative data was collected because of the nature of the study. The topic which has been selected can be analysed, and the aim and objectives of this task will be achieved by utilising qualitative data. Thematic analysis has been used to make sure that the data which was collected has been previously analysed.
The researcher did not face many problems regarding ethics because of his use of secondary data in conducting the study. The collected data was from publicly available sources, thus, factors like permission, confidentiality etc. are not valid. The issue of data manipulation may be raised (Dhingra and Dhingra, 2012). The researcher ensures that the collected data will not be manipulated.
This chapter has highlighted the methods used in conducting the study, as well as the importance of ensuring the process is valid and fair. The interpretivist course was adopted to interpret the data. Nonetheless, neither the positivist nor the interpretivist is the better method, yet as formerly stated, due to limitations, the second approach is most suitable at this point in time. Thus, after analysing a wide range of academic literature, the research has concluded that the impact of pay and reward systems in any organisation has a direct impact on employees on all levels (career development, employee wellbeing and performance etc.), as well as on the organisation as a whole (employer branding, culture, business profits etc.)
Research Timeline (Gantt Chart)
- Qualitative Data Analysis
Effectiveness of Work Environment in motivating employees at Amazon Fulfilment
“Amazon is no exception to the rule when it comes to the challenge of motivating staff. There are several driving aspects used by Amazon to promote staff morale” (Amazon.com, Inc, 2022). Being a part of Amazon Fulfilment Program is an exciting experience, particularly if people have a strong work ethic and like being recognised for their exceptional abilities. “Those that do well are given more responsibility and a chance to invest in stocks as a reward”. All of the company's efforts are directed on improving the customer's overall satisfaction. Many variables contribute to employee motivation at Amazon, including the atmosphere, possibilities for growth, advancement in one's position in one's career, and financial compensation. Motivating staff at Amazon relies heavily on financial incentives which uses Total Reward Systems (Amazon.com, Inc, 2022). Once an employee has earned it, it does not have much weight as an incentive, and Amazon was aware of this. While workers may be motivated by other factors, the "hope for money" is a major driving force. “Every employee has a giant carrot in front of them, and as they approach closer, it continues growing bigger. When an employee can see their future earnings today, they become more motivated. Employees are energised by the prospect of a brighter future. In addition to financial incentives, Amazon provides its workers with a stimulating work environment, training, and advancement chances”. (Amazon.com, Inc, 2022)
Effectiveness of balance of intrinsic and extrinsic motivators with staff at Amazon Fulfilment
When it comes to employee motivation, the Amazon Fulfilment programme stresses the importance of a money-driven culture. It encourages workers to work hard and strive for the future. Some of the ways Amazon encourages its workers include learning opportunities, professional progression chances, and a nice work atmosphere. These aspects are specific features of intrinsic motivational elements used by Amazon to motivate its employees (Georgescu, 2022). As for extrinsic motivation in Amazon Fulfilment Program at Amazon, the aspects of External benefits inspire employees to labour in order to get compensation from their company. Pay raises, additional perks, bonuses, and other forms of financial compensation are all examples of physical incentives.
The majority of new hires in the Amazon Fulfilment programme are compensated with a basic salary plus RSUs. Restrictive stock units (RSUs) are granted on a 5-15–20–20–20–20 ratio. 10% after the first year, 15% after the second year, and 20% after that, with an additional 10% every six months. Finally, after four years, the remaining 20% will be vested. This is a change from the typical 25–25–25–25–25 method used by most corporations, in which 25 percent is paid out after each of the first four years (Wu, 2019). “New joiners at Amazon additionally earn joining bonus paid over first two years that is about similar to the amount of RSUs they get in 3rd and 4th years. Employees get additional RSUs each year from the third year forward, which vest two years later. Amazon employees are paid a basic salary of around $160,000 per year, with the balance of their compensation coming through RSUs” (Georgescu, 2022).
The extent to which Total Reward could be improved at Amazon Fulfilment
Incentives may be tough for managers to utilise to inspire their personnel. That does not seem right to me. Using industry-leading cloud contact centre software, Amazon managers can quickly become masters in raising staff enthusiasm. Participating all employees (or representatives from various levels) in the incentives process, thus, promotes dialogue between workers and management. In addition, it will guarantee that the incentive system is supported by both workers and management (Akbar and Kaveti, 2022). As a result, it is vital to include workers in the design of the incentive programme to ensure that they appreciate the benefits and believe they are worth their time and effort. Amazon should place a high value on employee input and compensate employees in line with that value. An employee's motivation to work hard is boosted if respective managers believe the reward is worth it.
In order for employees to put up the effort required to receive the benefits; they need to believe they can achieve them. The managers need to be very careful to check in on a regular basis with workers to see whether they still believe in the potential benefits. Providing workers with a dashboard where they can see their performance in real time would help them to correctly analyse their own performance and set reasonable expectations for compensation (Oleg and Girault, 2018). Employees who believe the incentive system is fair will be more motivated to work hard for it. Rewards should be given out in a predictable manner, in accordance with established guidelines. Favouritism or cutting shortcuts will have a negative influence on staff productivity.
Thus, through an extensive analysis of the findings generated it can be conceptualised that at Amazon Fulfilment, emphasis is made extensively made onto monetary driven culture, through extensive rewards and incentives the company encourages its staffs to perform better. Nevertheless, learning opportunities, professional advancement, and a pleasant work environment are all part of what Amazon strives to provide for its employees (Amazon.com, Inc, 2022). Amazon employs a variety of intrinsic and extrinsic motivating variables to encourage its staff, including these attributes. In the Amazon Fulfilment Program at Amazon, workers are motivated to work hard in order to get remuneration from their employer (Georgescu, 2022). Physical incentives include pay hikes, bonuses, benefits, and other types of financial remuneration.
Hence, it is possible that the organization's Total Reward system could need some serious ramifications to drive workers to put in the effort necessary to earn the advantages; they must think they can accomplish them. It is critical for managers to keep an eye on their employees to determine whether they still believe in the long-term advantages of the programme (Akbar and Kaveti, 2022). Making real-time feedback available to employees would allow them to better assess their own performance and establish realistic remuneration goals. People will put in more effort if they feel the incentive structure is balanced. It is important that rewards be paid out in a predictable way, following defined rules. A negative impact on employee productivity might be caused by favouritism or cutting corners.
In the end, it can be concluded that Amazon Fulfilment places a heavy focus on monetary incentives, and so pushes its employees to perform at their best via comprehensive prizes and bonuses. Nonetheless, Amazon aims to give its workers with a pleasant working atmosphere, as well as educational and professional development possibilities. In order to keep its employees motivated, Amazon makes use of both internal and external motivators, such as the ones listed above. Workers in Amazon's Fulfilment Program are encouraged to put in long hours since they will be paid for it. Reimbursement in the form of salary raises and other financial incentives are examples of physical incentives. Thus, in order to motivate employees to work hard enough to earn the company's Total Reward system's benefits, the organization's Total Reward system may require some significant ramifications; employee must be encouraged to believe they can accomplish developed goals. Management must monitor its staff to see whether they still believe in the program's long-term benefits. Employees who have access to real-time feedback are better equipped to evaluate their own performance and set reasonable compensation targets. More effort will be put in by those who believe the incentive system is fair. Reward payments must be made in a predictable manner, according to established norms. Favouritism or cutting shortcuts might have a detrimental influence on staff productivity. Thus, within Amazon, workers must be included in the incentive programme design process if the program's advantages are to be fully appreciated and considered worthwhile. As a company, Amazon should place a high value on its workers' contributions and reward them appropriately. Employees are more likely to work hard if their bosses feel the payoff is worth the effort.
The HR6030 Applied HR Project Assessment module has given me extensive insight to how formulate effective research, consideration of key factors while making researches. This particular research has piqued my interest over how Amazon Fulfilment Program aids to the development of employee motivation and how it eventually contributes to better performance. Throughout this research and learnings in the module I was able to familiarise with motivational models and the insight to how the application of rewards and incentives aids to enhancement of productivity among employees. Throughout the conceptualisation of the key learnings in the module I was able to learn about some key behavioural prospects associating with CIPD behaviours which includes ethical behaviours, situational decision making and professional courage and influence. Inferring to these aspects I can imply that some of my own strength and weaknesses lies effective and situational decision making since I am able to make quick decisions regarding my activities, team leading prospects and making voice regarding key activities. This is an essential skill for HR profession which includes outcome driven decisions, principle led activities and effective team player. According to the learnings of the module I was able to learn quite intricate factors regarding human resource management, as per my learnings I can say that Human resources (HR) is concerned with bringing together employers and employees in a way that meets the interests of both parties while also meeting the demands of consumers. As a result, I can suggest that effective human resources management includes processes such as recruiting, selection, training, performance management, and techniques for fostering employee participation in the organization's growth.
Business partner and social justice are two of the responsibilities that HR professionals play. That is why when you look at the CIPD's behaviour, you will notice that it has both a concern for corporate profitability (e.g., more engaged workers) and a social justice role (e.g., ethics and inclusion, engagement, etc.).
During the learnings in the module, I was able to learn about the CIPD Professional Map. For instance, I have understood that the HR profession's core mission is to advocate for better employment and workplaces. As a result, the new Profession map places this responsibility squarely on the shoulders of those involved in the workforce. The professional map emphasises the need of effective HR for both the business and the employee. People nowadays are more concerned with ethics than ever before, therefore HR professionals should adopt behaviours that benefit both the company and its employees. Moreover, the learnings familiarised myself with some key purpose and values of CIPD which includes principle-led values, evidence-based activities and outcome-driven instigations. In their practicality its all about developing good relationship and doing good for both the employees and employers. In terms of research, this includes extensive measure of data collection procedures such as use of qualitative and quantitative data collective procedures to derive integrative and validated data. Moreover, it is not only about the bottom line; it is also about the people involved. It is ethical and based on excellent employer branding to put an emphasis on workers and to assume that they are organically driven to accomplish their jobs well. Nevertheless, did use such techniques in my research which involves extensive collection of secondary data use qualitative data analytical prospects to validate key information associating the research. The module also showed me insights to the aspects of CIPD by means of some potent factsheets, according to those data sources diversity and inclusion also plays critical role in deriving HR professions (CIPD, 2022). In this regard, I have learned that a key component of effective human resources management is treating every employee with respect and respecting their unique contributions. But in order to gain the advantages of a diverse workforce, an inclusive workplace where everyone feels they can contribute and fulfil their potential is essential (CIPD, 2022). A successful inclusion and diversity plan goes beyond legal compliance and aims to provide value to an organisation by enhancing employee well-being and engagement, despite the fact that UK law establishes minimal criteria.
Nevertheless, during the formulation of the research, some key issues I also faced such as disposition of proper information, accumulation of data, data analysis and ethical prospects. Yet, although I did faced some issues on accumulating relevant data for the literature, by the help of extensive coalition, shared working and engagement me and my team diversified and executed our research related works which in turn led to the resolution of the said issues and ultimately helped us formulate a comprehensive research report regarding our subject concerned.
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