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The global economic environment

1)The nature of the project.
2)The sources of information you plan to use.
3)The most important concepts and techniques to be applied.
The following conditions must meet in the project:

1)Assess the organisation in terms of its organisational strategy, objectives, mission and values.
2)Analyse the environment in which the organisation operates with regards to industry, business life

cycle, etc.

3)Evaluate the organisation�s current reward and pay strategies on two criteria: for meeting its overall
organisational strategy and for maintaining competitive advantage in the face of new challenges and

changing conditions.


Reward and Pay 2
The global economic environment is increasingly becoming competitive, more turbulent
and full of uncertainties. Most organizations are yet to understand the direct impact that worker
have on an organization’s level of performance, profitability and ability to sustain competition.
To attract and retain well qualified, talented, innovative, committed and motivated employees,
who are key to sustaining an organization’s competitive advantage, appropriate reward and pay
strategy need to be implemented, yet most organizations prefer using the best practise strategy, a
pay and reward strategy used by most organizations, instead of adopting the best-fit approach,
which involves adopting a reward and pay strategy that is relevant to the organization’s existing
circumstances, and aligned to both the human resource and the organization’s strategy. Reward
and pay strategy provide a pathway that links the organization’s and staff’s needs to the
compensation policies within the organization. This research shall investigate the best and most
appropriate reward strategy that the Coca-Cola company may adopt to increase worker’s
motivation and sustain competition, performance, productivity and profitability. To achieve this,
various literature and articles on reward and pay strategies shall be analysed and appropriate one
suitable for Coca-Cola identified. The research shall begin by looking at the Coca-Cola
company, in terms of its mission, objectives, values and visions, analyse the company’s life
cycle, industry and environment, as well as the current reward and pay strategy existing in the
company. Next shall be methodology, the literature review and finally discussion. The proposed
reward and pay strategy shall be presented to the company for consideration.


Reward and Pay 3
A good pay package for employees is no longer a guarantee that a company will attract
and retain skilled, talented and motivated labour, and neither will it guarantee success and
performance if it is not aligned with expected performance and organization’s objectives
(Mujtaba & Shuaib 2010, 112). Research is increasingly showing that a goods basic pay alone is
not enough in raising a company’s performance. Reward and pay strategy refers to the adoption
of a pay and reward policies that are relevant and aligned not only to an organization’s strategy,
but also to the human resource strategy and organization’s objectives. Companies need to
constantly design and develop pay and other reward strategies that are relevant and that match or
fit in their strategy (Yi & Hai2011, 12). Pay and rewarding system that a company adopts can be
either rewarding or devastating to a company, calling for thorough planning when designing
these compensation policies (Mujtaba & Shuaib 2010, 113). Employees are the most important
resources in any company and therefore, all possible ways to keep them motivated need to be
adopted. A motivated employee, whose performance is recognized and appropriately rewarded,
is likely to perform even more and become innovative in his work. Most organizations do not
understand the link between strategic reward system and organizations’ success, yet reward
policies practises by an organization have the potential of making an organization very
successful or succumb to competition. The Human resource department is vital in influencing the
pay and reward strategies that companies adopt. Successful organizations perform periodical
evaluation and upgrading of the company’s performance and compensation strategies. As
organizations strive to succeed, register increased profits, out-perform each other and meet their
objectives, they have to overcome hurdles emanating both from their internal operations such as
reward and pay policies, management or from the external environment such as recession,
taxation policies, cultural values and demographic factors. While there are many factors that
may influence an organization’s performance, employees within an organization play a key role

Reward and Pay 4
in influencing an organization’s performance and achievement of its objective. Pay and reward
strategies tell a lot about a company and it is the most visible and crucial aspect to employees
(Mujtaba & Shuaib 2010, 115). It is against this background that this proposal seeks to make
further research regarding the pay and reward strategies practised in organizations, with special
focus on the Coca-Cola company, and identify the link between strategy adopted and
performance and the best strategy that the company may adopt to increase employees motivation.
Coca-Cola Company is one of the most stable multi-national companies in the world
operating under the manufacturing industry (Geisel 2012, 15)
The company’s mission is to ensure that the world remains refreshed, happy, inspired and
optimistic. It is also keen on creating value and making a difference to its customers ((The Coca-
Cola chronicles, n.d))
Vision and Values
Its values include leadership, accountability, integrity, quality and collaboration, while its
vision is to become a great working place where employees are inspired to produce their best, to
supply to the world high quality beverage that satisfy customer needs, to maximize profits while
at the same time remaining responsible and realize rapid growth and efficiency (The Coca-Cola
chronicles, n.d)

The company’s micro and macro environment

The company operates in a very competitive environment, just like other manufacturing
companies. Both micro and macro environmental factors influence the company’s performance.

Reward and Pay 5
Micro environmental factors such as competitors such as Pepsi, suppliers, pressure group and
customer are forces that the company needs to deal with, especially due to the fact that the
company operates in various parts of the world which may present difficult challenges to the
company’s performance. For example, the company has had to deal with pressure groups from
several Muslim countries who at one point boycotted consumption of the company’s products
(‘Coca-Cola freezes expansion at Varanasi due to protests, approval delay 2014, 8-10). Macro
factors such as economic cycles, demographic factors, natural disasters and political factors also
play a role in influencing the company’s performance. The company for example has registered a
decline in profits during the resent global recession and profits from politically unstable
environments have caused the company’s profits to dwindle in the affected regions. Despite
these environmental challenges, the company has managed to maintain a commandeering lead in
the supply of beverages across the globe, with its product and brand gaining worldwide
popularity (Eavis ,2014)
The company’s life cycle
The company has made tremendous gains since its inception or birth to the point of
reaching maturity. The company can be said to have attained the highest point of growth,
maturity, characterised by rapid expansion, and increased departments, large number of
employees and financial resources as well as extensive formalization. Management style can be
categorized as synergist, indicating a sophisticated and efficient management.
The current reward and pay strategies
The company’s pay and reward strategy and policies are intended to help the company
achieve its strategic goals, missions and visions. Its reward system incorporates basic pay or

Reward and Pay 6
salary, compensations, and other benefits such as healthcare policies. Coca-Cola company has
incorporated a number of rewards in order to enhance performance of the employees. An eclectic
approach include compensation that is the usual basic salary and other monetary incentives,
ability to get loans and also incentives like promotions and other career growth opportunities.
The working environment facilitates a good co-existence amongst the employees and also with
those in management. Trainings are organised to facilitate personal growth that will in return
lead to competence and achieving of the set targets. The Human resource is key in maintaining
the staff that is essential to the good performance of the company. The release of performance
results also means extra bonuses and recognition of individual workers’ contribution that is good
for esteem growth and identification with the company. The individual assignments given will
also lead to opportunities to identify the weak personal points and offer training to fill these gaps
and in future lead to better performance both at the individual targets and the company’s targets
(Anfuso 1994, 112)


This research shall be based upon review of various literatures examining of documents
regarding the reward and pay strategies that can motivate employees and enhance their
performance. The main literature reviewed shall be articles, books, business journals and
periodicals, and other relevant human resource related publications related to reward and pay
strategies, so as to find out the best reward and pay strategies that human resource most
recommended by HR experts and practised by most successful and modern organizations.

Literature Review

Reward and Pay 7
For an organization to succeed and maintain a competitive edge over the rest, it has to
effectively reward and motivate its employees. The human resource department has the
responsibility of managing performance of both employees and managers. The reward and pay
policies an organization adopts is responsible for motivating workers, especially when it is
timely, effective and comprehensive (Yi & Hai 2011, 15). Studies show that there is a positive
relationship between an employees pay and reward, to general organization’s performance. If
employees perceive the pay and reward to be fair, they are more likely to be motivated towards
their work (O’Byrne & Gressle 2013,28). Organizations need to reward any improvement in
performance and employees’ quality work because if workers link the reward and pay to their
performance and work, then they are more likely to strive towards producing quality results. To
encourage employees to always be ethical at the work place, then managers may find a need to
reward workers behaviour to motivate such ethical behaviours. The HR department has also the
responsibility of ensuring that the reward systems adopted are in line with the organization’s
values, missions and objectives. The pay and reward systems should also be based on merit and
highly performing employees should receive higher rewards (Zenger 1992, 200). Most HR
specialist recommend adoption and implementation of a total reward strategy. This whole-some
strategy encompasses compensation, which includes basic pay, pay increase, promotions and
merit pay. It also includes benefits such as health care benefits and retirement benefits, as well as
off-time considerations. A comprehensive reward system should also allow for personal growth
through regular training, provide opportunity for career development, and fair performance
management ((Gross & Friedman 2004, 8))


Reward and Pay 8
To further sustain its competitiveness, provide quality product that refresh the world, and
increase employees innovation, a total reward strategy would be the best for the company to
adopt. Various employees are motivated differently, either intrinsically or extrinsically. A total
reward system will address all the different types of worker expectations (Gross & Friedman
2004, 8). This will keep them motivated and productive. The company will also be able to retain
them and make use of their talent.

Reward and Pay 9

List of References

Anfuso, D 1994, ‘HR unites the world of Coca-Cola’, Personnel Journal, 73, 11, p. 112.
‘Coca-Cola freezes expansion at Varanasi due to protests, approval delay’ 2014, FMCG
Snapshot, pp. 8-10.

Eavis, P 2014, ‘Coca-Cola, yielding to criticism, revises its proposal for executive pay’, The New
York Times, 2014, Opposing Viewpoints in Context.

Geisel, J 2012, ‘Coca-Cola designs innovative captive plan’, Business Insurance, 46, 19, p. 15.

Gross, S, & Friedman, H 2004, ‘Creating an Effective Total Reward Strategy: Holistic Approach
Better Supports Business Success’, Benefits Quarterly, 20, 3, pp. 7-12.

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