Critically assess the reward practices used within ABC MSC and suggest how the differences in practice between local staff

Critically assess the reward practices used within ABC MSC and suggest how the differences in practice between local staff

Critically assess the reward practices used within ABC MSC and suggest how the differences in practice between local staff and expatriates might be addressed taking cultural considerations into practice







Employee motivation is one of the techniques that ABC MSC ought to employ to ensure optimal productivity. Although there are diverse techniques that could be used to motivate employees, the efficacy and applicability of the technique depends on the organization and the industry in which it operates. No matter what type of technique that ABC MSC chooses to adopt, based on the observations of Johansson, 1997, the technique must be one that incorporates components that affect the social component of the employees. This means that for the technique to succeed, it must affect their communication, sense of belonging to a team and relationship cutting across all the levels of staff. Based on the analysis of ABC MSC, employee rewards is not at the core of the organization. As at the present, the local staff and compensation services do not include medical benefits to cover close family members (Foong & Richardson, 2008). In addition, the absence of training department in the corporate division to offer more training for managers so that they might uplift their managerial techniques is not in place currently (Foong & Richardson, 2008).

Reward practices used

Motivation is the activation of goal-oriented behaviour. It is usually used as a tool to getting results. According to Koch 2001, a delicate balance of communication, incentives and structures are necessary in motivating others. ABS MSC uses both intrinsic and extrinsic motivation methods. Intrinsic motivation is described as the motivation that is driven by an interest in the task itself. This form of motivation exists within the individual and does not rely on external pressure. On the other hand, according to Alon 2004, extrinsic motivation originates from outside the individual. An example of extrinsic motivation is rewards like grades and money or coercion and punishment. Koch 2001 described motivation as being entrenched in the essential need to reduce physical pain and increase pleasure. In addition, specific needs such as eating and resting may be included as the foundation of motivation. In most cases, motivation is confused with concepts such as preference or optimism.

Direct rewards

For instance, between 2000 and 2005, the transport allowances were increased from RM200 to RM220. Human beings’ behaviours are influenced by their wants and desires are among the motivation methods employed by ABS MSC. The needs are numerous and as such they are arranged in order of importance starting from the basic to the complex. Tylecote 2004 says, one cannot advance to the next level of needs before the lower level is minimally fulfilled. In the case study, ABS MSC has moved from the basic needs like salary to secondary ones like car parking allowances. Although ABC MSC does not offer direct monetary awards, for example higher wages or salaries, the strategy employed to retain the existing employees is spread on areas like transport allowances, cell phone, car parking allowances among other. This has been as a retention strategy.

Fair treatments

According to Davis et al (1992) people are more likely to be motivated when they feel fairly treated as in ABS MSC. Moreover, when one feel unfairly treated they may become de-motivated. ABS MSC’s motivation declines because of the sense of inequality that has been going on. This sense of fairness depends on the comparison the employees make between their rewards with the ratio received by others considered to be in the same working conditions. ABS MSC recognizes or appreciates the facts that variable factors do affect individual’s assessment and perception of their association with work their work. Although at times the management ignores the requirements of the employees. The working environment has been favourable and this has been acting as a motivation factor for the employees.

Good Management

ABS MSC has four strong management practices that act as a motivation. The lifetime employment, seniority-based earnings, promotion systems, ABS MSC welfare services and enterprise unionism are the core strengths of ABS MSC. People are motivated by things that they desire, that they know how to get and that they believe they have the ability to achieve. Individuals have the tendency to select the behavioural option with the greatest motivation forces. The motivation force for an action is a function of three perceptions namely expectancy, valance and instrumentality. Johansson 1997 simplifies the terms as, the expectancy that one’s behaviour will lead to the desired performance, the value that an individual places on the rewards, and the belief that one will receive a greater reward if they meet the performance expectations. Since the motivation force is the product of three perceptions, a zero value of any perception will result into a zero for the whole equation. In the case given, ABS MSC has the expectancy that customer satisfaction ratings will go up (Koch, 2001).

Achievable goals

A goal is the aim of an action, for instance, to achieve a specific standard of proficiency. Moreover, a goal is key tool in getting one motivated. The best goal setting method is called S.M.A.R.T, which assumes that a goal should be specific, Measurable, Attainable, Relevant and time bound (Tylecote, 2004). During the appraisal interview, ABS MSC employees are motivated to work because of the goals, the company sets. ABS MSC wants to increase customer satisfaction in the coming year and understands that this can only be achieved by satisfying the different needs of the numerous stakeholders in the projects. This has been another motivating factor in ABS MSC.

From the discussion above it is clear that employee motivation is driven by numerous desires, needs like money, security and individual satisfaction. In addition, there is the personal internal drive to do a certain task or take part in an organizational change. Employees need to be motivated towards achieving the organizational goals. Various models like the one discussed above, have tried to explain how employees are motivated. However, mere pay rise initiatives seem to be insufficient in improving the company’s performance. Using the intrinsic motivation concept may lead to organizational goals being attained (Tylecote, 2004). The intrinsic motivation challenges the concept that people often do something for external rewards.

Looking at the program used by ABC MSC, the effectiveness of the program can be evaluated on a scorecard based on the above points. First, the program recognizes the importance of going beyond pay-check. The program is likely to succeed given its recognition of various aspects that relate to group dynamics. By incorporating the go-cart racing, the ABC MSC employees are placed in a better position to appreciate the spirit of teamwork and give them the sense of belonging. It also has an impact on the employees’ sense of belonging and brings to them the spirit of communicating at various levels of staff. It can further be observed that the program stands high chances of success because it fosters a spirit of mutual assistance (Foong & Richardson, 2008). This is very important as the employees get a chance to be served by their supervisors and higher-level management and suggest how the differences in practice between local staff and expatriates might be addressed taking cultural considerations into practice.

The differences in practice between local staff and expatriates might be addressed

The performance of workers or employees of ABC MSC is as critical to its success as is the planning and execution of its strategies, objectives, vision and mission. In order to understand and bring about the synchronization between the ways the members of ABC MSC function in accordance to its objectives is by understanding not only how their performances are analysed and managed but practice between local staff and expatriates as well. An attempt has been made to understand the concept of team performance, performance management and their significance in the success of ABC MSC and its vision, mission and objectives. The process of managing the organizational diversity will also help in enhancing organizational flexibility. The changes to organizational culture and management systems needed for managing diversity will impact other areas of the Management (Tylecote, 2004).

In the past, various organizational psychologists plus other researchers have given more recognition to the effects of race and cultural difference in an organization. Given that in most cases, the social cultures are embedded in the organizations and people do bring their cultures to the workplace, the organization performance and communications tend to change as new employees are slotted in.

Changing people and their cultures

All successful changes entail changing people and their cultures. Change in people and their cultures entail changing the people’s mind-set and the way they behave subject to given condition or in referring or working with other employees. People change concern just a few workers, such as sending a handful of middle managers to a training course to enhance their leadership skills. Cultural change pertains to the organization as a whole (Lee, 2002).

Training and development

Training can be one of the best approaches for changing people’s mind-sets. ABS MSC might decide to offer training programs to large blocks of employees on subjects such as teamwork, diversity, emotional intelligence, quality circles, communication skills, or participative managements. For instance, successful organizations have provided training and development opportunities for all the workers, particularly giving emphasis to the training and development of managers with the idea that they might or will change their behaviours or attitudes towards one another (Kumar et al. 1994). The behaviour and attitudes of few mangers have ended up influencing the whole organization therefore leading to the change in the whole organization or the companies, which have employed the strategy.

Organization development

The organizational development is a planned systematic process of change that uses behavioural science knowledge and techniques to improve an organization’s health and effectiveness through its ability to adapt to the environment, improve internal relationships, and increase leaning and problem-solving capabilities (Erramilli, 2000). It focuses on the human and social aspects of the organization and works to change attitudes and relationships among the workers and managers and therefore assisting them to strengthen the company’s capacity for adapting and renewal.

It is evident that the employees will always communicate how she or he changed as a result of adapting to the company standards and requirements. ABC MSC literature typically aims at general concepts for example models, and issue such as communication, interpersonal, group and leadership skills that enhance managerial competence (Garrett, 2007). Managers, administrators, and organizational employees are required to obtain a range of skills and competencies that will increase organizational effectiveness, performance, and productivity. For the managers and administrators should be able to create supportive and effective communication systems, and enhance job performance through effective motivation. Managers also ought to understand and use power and influence while learning to create processes to improve effective group decision making (Gidengil, 1999). Moreover, they should be able to foster leadership capability while managing conflicts and assigning authority and duties to various people and departments.

As the workplace becomes more diverse, it is important that the aforementioned factors be understood from a wider perspective (cultural). There is a considerable evidenced to assert that people from various cultural groups perceive the world and attribute meaning to events and experience differently. Thus, self-awareness, communication patterns, decision making, support systems and motivation various with people from different cultural backgrounds. In addressing the cultural difference between the employees in ABC MSC, the knowledge of the skills set is essential (Erramilli, 2000). It is thus important to understand individual’s personality and human development processes. Understanding of the bias of people’s attitudes, perception, problem-solving techniques, and behaviours is essential as the employee is the core unit of the organization. Moreover, knowledge of individual processes and functionalities are to be enhanced with the information of interpersonal and group processes, especially because an organization requires work to be done in groups by people who interact with one another (Dow, 2000). It is as a result of group interaction that issues concerning communication and flow of information, such as how group members in the organization and between groups interact and then form attitudes and perceptions.


Language being the most basic and multifaceted issues for the teams or groups in ABC MSC, it should be addressed. In most cases, it is downplayed or overlooked altogether. Team members should possess varying degrees of competency in and comfort levels with the language aggregated by the use of such technologies as telephone and video-conferencing (Wood & Robertson, 2000). As exposure to and interaction among the team members will give these difficulties less significant over time, it is important that team members to ware that initially their accents can cause misunderstandings (Alon, 2004). The managers have a role in ensuring that the ethics and set rules (including the language used) are in place.

It is within the framework of an organization’s culture that the aforementioned driving forces are addressed; that is how and in what ways an organization copes with or responds to the legal, moral and performance issue associated with addressing cultural issues (Chetty & Campbell-Hunt, 2004). The culture of the organization will also determine how and from what perspective it will address cultural issues.

Cultural Assumptions

Regardless of the strategy and techniques used by the manger, it is always important to assume the cultural differences and cultural diversities of the various employees and employ the universal tone. The universal perspective on culture places emphasis on human similarities, whereas group differences are deemphasized. The fundamental assumption of the universal perspectives is that all people are basically human and therefore equal. Therefore, cultural differences are housed in personality and understood only from this vantage point. The universal perspective also closely resembles the colour-blind vision of all people living in harmony wherein closely differences are of little or no relevance (Cavusgil, 2001). Secondly, the ubiquitous approach should also be employed. The approach holds that all differences associated with group membership are salient. All forms of social or group membership are cultural. According to this perspective, differences in cultural groups are acknowledged, but less awareness exists regarding the influences of the dominant culture on the various groups (Ziller & Phibbs, 2003). The organizational culture of ubiquitous organization would be expected to mimic the culture of society and its structure. Thus, separation of people from different cultures and groups would not occur.


The traditional perspective defines culture as a country, which means a common language, values, beliefs, ritual and other aspects. When the organization or ABS MSC for this instance employs the technique, the cultural differences between the various members would be bridged. The assumption of the traditional perspective is that shared language, geography, and customs are the basis of culture. The obstacles to effectiveness arise from conflicts in worldviews and perceptions about what is important in terms of relationships, thought processes, and language. Therefore, leaders need to be cognizant sources of cultural conflict in assumption and values (Czinkota, 2001).

In conclusion, moving companies towards the objective of increased capacity to address and cope with cultural differences is difficult. The mangers therefore have great task in seeing that the cultural differences between the different cultural groups in an organization is bridged as possible.


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