Introduction
Because it offers travelers from all over the world housing, food, and recreational opportunities, the hospitality industry is essential to global trade. In dozens of nations, the InterContinental Hotel Group (IHG) owns and operates a distinguished network of hotels and resorts (Banyeva et al., 2023, p. 74). IHG is renowned for its commitment to providing top-notch service and producing exceptional guest experiences. IHG’s extensive network of recognized hotel brands includes InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, Holiday Inn, and many others. IHG can accommodate the needs of business travelers, vacationers, and conference planners because of its substantial presence in so many different countries. Thanks to its dedication to sustainable business practices, innovation, and the total satisfaction of its consumers, the company is an industry pioneer. Due to the diversity of the regions and cultures represented, IHG’s worldwide workforce poses unique management challenges. The administration of IHG’s human resources depends on developing a framework for pay and benefits that is competitive. More than just paying employees fairly, a well-crafted benefits and compensation package motivates people to fully support the goals of the business (Pasumarti, Kumar, and Singh, 2022, p. 61). This framework will provide a comprehensive pay and benefits scheme created particularly for the firm, taking into account the distinctive elements of the hotel industry and IHG’s global presence. This approach’s goals are to maximise employee engagement and retention and better connect individual performance with company goals.
Performance and reward management framework
Explicit Goals for Performance
Establish measurable objectives and benchmarks for each position. These targets should be SMART (specific, measurable, attainable, relevant, and timely). Spread the word to your staff so that everyone is on the same page and knows what is expected of them.
Performance Measurement and Assessment
Set up a reliable system for monitoring performance using qualitative and quantitative indicators. It may be done via objective metrics connected to key performance indicators (KPIs) specific to each position and frequent reviews, self-evaluations, and peer feedback. Balancing outcome-based performance and performance based on demonstrated behaviours and abilities is essential.
Instruction and Critique of Performance
Encourage regular check-ins and mentoring sessions. Give workers consistent feedback on their performance, highlighting their achievements and suggesting ways they might grow (Yusoff et al., 2020, p. 668). Managers and supervisors should be encouraged to undertake growth-promoting interactions with them. Make sure the comments are helpful, timely, and full of specifics.
Enhancing Skills and Performance
Provide personnel with training and development programs designed to improve their specific areas of weakness. Workshops, seminars, online courses, mentorship, coaching, and even job rotations are all examples of what might be covered by such programs. Development programs should be coordinated with individual and organisational requirements.
Rewards and Recognition
Create a thorough rewards and recognition program to recognise and promote good performance and achieving set goals. Think about offering a combination of monetary and non-monetary incentives, such as bonuses based on performance, pay raises based on merit, promotions, employee of the month/year awards, certificates of success, public acknowledgement, and even extra time off. Make sure that pay is equitable, easy to understand, and based on quantifiable performance.
Career Progression and Opportunities
Give employees a detailed outline of the steps they may take to enhance their careers with the company. Provide staff with chances to lead initiatives, advance in their current roles, or seek out new ones. Help workers choose what they want out of their careers and then give them a hand in getting there.
Continuous Evaluation and Improvement
Regularly assess how well the system is working for managing performance and compensation. Collect input from staff, superiors, and other interested parties to identify problem areas. Assess how the framework influences employee satisfaction, productivity, and the business’s overall health. Changes in the business environment and user input should drive ongoing adjustments to the framework.
Communication and Transparency
Maintain open lines of communication on the organisation’s strategy for measuring and rewarding success. Share with your staff how the framework will help them achieve their goals and the steps they will take to get there. Update them on their efforts and the outcomes regularly. Facilitate frank discussion, and answer any questions or concerns people may have about the framework.
Purpose of the Reward System
Boosting Productivity
A reward system’s main objective is to inspire workers to give their all in pursuing personal and collective purposes. Employees are motivated to go above and beyond in their work and contribute to the success of the company when they are rewarded for their efforts.
Attracting and Retaining Talent
Attracting and retaining top personnel in the hotel sector requires a well-thought-out compensation scheme. IHG can set itself apart as an employer of choice by providing competitive pay and other enticing benefits to recruit and retain talented individuals who can contribute to the company’s development and reputation.
Rewarding Good Performance and Contributions
Monetary incentives are a visible sign of appreciation for workers’ efforts and results. IHG can foster an atmosphere where workers feel appreciated, inspired, and involved by recognising and rewarding outstanding performance.
Enhancing Morale and Productivity
An all-encompassing rewards program helps boost morale and productivity in the workplace. Employees are more invested in their work, happy in their positions, and loyal to their employers when they believe their efforts are appreciated and rewarded.
Aligning Individual and Organisational Objectives
The incentive structure must encourage actions that contribute to IHG’s long-term goals. IHG can motivate its workforce toward achieving its vision, purpose, and long-term success by connecting compensation with key performance metrics and corporate objectives.
Motivating Employees Rewards are a powerful tool for fostering a culture of success in any firm. By offering incentives for cooperation, customer-centric service, innovation, and sustainability, IHG can help ensure its employees’ actions are consistent with its values.
Boosting Professional and Personal Growth
A well-designed incentive program may help individuals advance in their roles at IHG. Employees may be incentivised to put time and effort into their careers by being given a chance to grow within the company, learn new skills, and take on more responsibility.
Framework: Ethical and legal framework of Rewards in people management
Establishing an ethical and legal framework is of utmost importance when devising a pay and reward system for a multinational organisation operating in the hospitality industry, such as InterContinental Hotel Group (IHG). The framework guarantees that the remunerations extended to the staff are equitable, lucid, and adhere to the relevant statutes and norms. Furthermore, it fosters a culture of integrity, equality, and ethical conduct within the entity. IHG can establish an atmosphere that encourages loyalty, boosts productivity, and adds to the company’s success by instituting a solid compensation and incentive system. In addition, such a system would help IHG keep pace with the rapidly developing hotel business, where fierce competition and client expectations are constantly shifting.
The development of an ethical and legal framework for rewards in people management requires careful consideration of several key elements:
Compliance with Laws and Regulations
Compensation and benefits must comply with all applicable laws governing employment, such as minimum wage, overtime compensation, and discrimination. It is essential to perform frequent evaluations and updates to comply with the ever-evolving legal requirements in the countries where IHG operates.
Equal Pay and Non-Discrimination
Equal compensation for equal labour should be encouraged in the system regardless of a person’s gender, race, age, religion, or any other legally protected feature. Compensation decisions should only be made based on performance on the job and merit.
Transparency and Communication
All workers should be aware of the incentive system and its specifics, such as the metrics used to measure performance, the methods used to assess that performance, and the requirements for receiving various prizes. This openness promotes honesty and fairness among employees.
Performance-Based Rewards
Pay should be based on how well a person or group performs. Objective criteria and performance indicators that align with IHG’s long-term objectives should form the basis of a performance review procedure. Goals for performance should push workers to their limits yet be within reach.
Objective Evaluation
A fair and consistent method must be used to assess performance and decide on compensation. Techniques like annual reviews, yearly objectives, and constant feedback help keep everyone on the same page.
Recognition and Appreciation
In addition to monetary compensation, IHG should also implement non-monetary recognition programs to recognise and appreciate the efforts of its employees. Awards for employee of the month/year, public acknowledgement, and training and development opportunities fall under this category.
Ethical Incentives and Bonuses
Financial rewards and other incentives should encourage desirable conduct and deter those that might damage the company’s brand or breach ethical norms. Employees should be incentivised to uphold IHG’s ethical standards and code of conduct via this approach.
Regular Review and Evaluation
IHG’s values and business goals must align with the ethical and legal framework for incentives. Thus, this framework should be reviewed and evaluated regularly.
Choices and Proposed
Salary and Wage Scale
The core of the incentive program is a competitive base salary. It has to reflect the duties of the position, current market rates, and the level of expertise of the individual being compensated.
Performance-Based Bonuses
Bonuses for exceptional performance might be based on personal, group, or company achievement. Bonuses reward workers for going above and beyond the call of duty. They may be provided on a yearly, quarterly, or project basis.
Incentive Programs
Incentives may be tailored to recognise and reward workers for accomplishing various objectives. IHG, for instance, may provide monetary bonuses to employees who meet or exceed sales quotas, get high marks from guests in surveys, and find creative ways to save costs without sacrificing guest happiness.
Recognition and Appreciation
Positive workplace cultures are primarily the result of recognition programs. Recognition programs at IHG may take several forms, including monthly “Employee of the Month” or “Team Appreciation” awards, a public acknowledgement in newsletters or company-wide announcements, and accomplishment certificates.
Non-Monetary Rewards
Employees may be motivated and engaged just as much by non-monetary benefits. Flexible schedules, vacation days, training courses, mentorship programs, and promotions are just some of the perks that IHG can provide.
Employee Benefits
Competitive compensation and generous benefits packages are essential in today’s labour market. Healthcare coverage, retirement savings plans, paid time off, hotel discounts for workers and their families, and wellness programs are just some of the perks that IHG can provide.
Performance Development and Training
IHG may help its staff members grow professionally through performance development and training initiatives. Workshops, seminars, online learning platforms, and certifications are all examples of initiatives that may help workers advance in their careers.
Permanent Rewards
Employees’ interests may be aligned with IHG’s long-term performance via long-term incentives, including stock options, profit-sharing schemes, and employee share ownership initiatives. Motivating workers helps them see themselves as significant contributors to the company’s success.
Critical Analysis
The reward system selected by InterContinental Hotel Group (IHG) is designed to cater to both national and international requirements. It comprises diverse reward categories and addresses crucial aspects such as talent motivation, attraction and retention, alignment with organisational goals, and employee contentment.
The theoretical frameworks informing reward & performance management
Expectancy Theory
According to expectancy theory, people put in effort when they have reason to believe that doing so will pay off somehow. According to this notion, there has to be a direct connection between effort and compensation (Barba-Sánchez and Atienza-Sahuquillo, 2017). The theory offers a helpful foundation for understanding motivation. Still, it may oversimplify the complexity of human behaviour by ignoring the effect of elements like job satisfaction and intrinsic motivation on productivity and inspiration.
Equity Theory
According to the equity hypothesis, an individual’s perception of fairness in the workplace is informed by comparing their input (effort, talents) and output (rewards) ratios to those of others. It posits that workers are driven by a sense of justice and work harder when they believe their pay is competitive (Bowen, 2018). Although equity theory sheds light on the significance of fairness and perceived fairness in compensation systems, it may not account for contextual elements that impact workers’ views of fairness or reflect individual variances in how employees perceive fairness.
Goal-Setting Theory
According to the goal-setting principle, doing so may boost motivation and performance. According to this idea, having realistic and demanding objectives may help keep you on track and motivated, while receiving regular feedback on your routine can help you get even better results (Locke and Latham, 2019). There is a lot of evidence to support the idea of goal-setting, which is also commonly employed in practice. However, without the proper means of achieving them, too ambitious targets may cause stress and unethical conduct.
Social exchange theory
According to the social exchange idea, workers provide their efforts in return for compensation and employer perks. According to this notion, commitment and motivation are enhanced when there is an equitable and mutually beneficial exchange connection between employers and workers (Cropanzano et al., 2017, 9. 488). However, other variables such as corporate culture or job design may impact motivation in the workplace, and social exchange theory may only partially capture this complexity.
Reinforcement theory
The effects of reinforcements and punishments on behaviour are the primary focus of reinforcement theory. It implies that rewarded actions are more likely to be repeated, whilst penalised ones are less likely to be repeated. According to reinforcement theorists, rewarding good behaviour is crucial in maintaining it (Susanto et al., 2021, p. 8). However, it may fail to account for the possible detrimental consequences of extrinsic incentives on the intrinsic drive.
How will it meet the organisation’s national and multinational needs?
Motivation
Bonuses, incentives, and recognition initiatives are all part of the reward system. These features are meant to encourage workers by linking their pay to their output as individuals and as a group. IHG can develop a high-performance culture by motivating workers toward excellence and achieving objectives by linking pay with performance measures and targets.
Competence acquisition and maintenance
The proposed compensation plan provides a competitive base salary in addition to performance-based incentives and other perks. This all-encompassing strategy displays IHG’s dedication to competitive pay, career advancement possibilities, and work-life harmony, all of which are important to attracting and retaining top personnel in the very competitive hospitality sector. Long-term incentives, such as stock options or profit-sharing programs, might also entice professionals who are interested in making a name for themselves and building their financial security.
Consistency with company goals
The goal of the compensation structure is to motivate employees to work toward IHG’s long-term goals. Rewards and incentives based on performance are tied to achieving predetermined goals, such as increasing revenue, boosting customer happiness, or improving operational efficiency. The approach incentivises staff to focus and strive towards IHG’s objectives by rewarding actions that contribute to the company’s performance.
Job contentment and dedication
Employee happiness and commitment may be increased via the provision of perks, non-monetary awards, and recognition programs. Giving thanks and acknowledgement to workers has a good effect on morale and productivity (Ali and Anwar, 2021, p. 27). Employees are more invested and committed to their companies when they get non-monetary benefits like flexible work schedules and opportunity for professional growth.
National and multinational adaptability
The selected incentive structure is versatile and extensible, making it suitable for use on a global scale. The fundamental structure can be kept the same throughout all of IHG’s sites, even if certain details, such as base salary and regulatory compliance, may need to be adjusted to meet local rules. While allowing for particular adaptations to meet cultural variations and local norms, this constancy is helpful in creating a coherent company culture.
Sustainable competitive advantage
IHG can maintain its competitive edge in the hotel business by instituting a robust and efficient rewards program. Better customer service, more satisfied guests, and more efficient operations are all results of a motivated and engaged workforce. Because of this, customers are more likely to remain loyal to IHG over time, which is good for business.
Conclusion
The organizational incentive system design of IHG maximizes staff retention, alignment with business goals, and engagement. Important elements are: Performance Objectives: Establish distinct, measurable objectives for each function that align with company objectives. Establish a reliable approach for tracking performance using qualitative and quantitative indicators, including position-specific KPIs. Performance measurement and assessment. Performance Coaching: Through check-ins and coaching, often provide personnel with performance and growth comments. Training individuals to strengthen their deficiencies and satisfy organizational requirements will increase their skills. Create a comprehensive program of rewards and recognition that includes both monetary and non-monetary incentives to recognize and promote good performance and goal achievement. Give employees a clear path to leadership positions, career growth, and new responsibilities. Continuous Evaluation and Improvement: Track staff satisfaction, productivity, and company health to adjust the incentive program in response to customer input and shifting business needs. Transparency and communication: Explain how the business evaluates and rewards success, provides status updates, and responds to inquiries. The IHG incentive program increases output, draws in and keeps employees, recognizes and rewards outstanding work, improves morale and productivity, and harmonizes personal and business objectives. By connecting compensation to performance metrics and corporate goals, the incentive system motivates employees and fosters accomplishment.
IHG is required to follow all applicable employment laws and regulations, advance equal pay and anti-discrimination, uphold system transparency and communication, base rewards on objective evaluation, offer recognition and appreciation, use ethical incentives and bonuses, and routinely review and assess the framework’s adherence to legal and ethical standards. A competitive pay and wage scale, performance-based bonuses, incentive programs, recognition and appreciation campaigns, non-monetary awards, employee benefits, performance development and training, and long-term performance-based permanent rewards are just a few of the alternatives for the reward system. To satisfy the needs of IHG on a national and international scale, employees need to be motivated, acquire and maintain competence, be consistent with company objectives, be committed to their jobs, and be flexible to work in different places while maintaining a core structure. Reward and performance management are influenced by expectation, equality, goal-setting, social exchange, and reinforcement theories. These theories clarify social dynamics, motivation, justice, goal-setting, and the impacts of rewards and punishments.
Bibliography
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