Essay: Management of Performance and Reward in Telstra

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¶ … management of performance and reward in Telstra

Background of the organization

Organizational goals & strategy

The social psychologist view

Economic theorist view

Analysis of issues or themes:

Link between reward and performance

Link between organizational strategy and the management of reward & performance

In this paper, we critically analyze the management of performance and reward in the Australian company 'Telstra' within a broad spectrum of issues. We analyze whether the management of performance and reward is strategic or how it is linked to the organizational strategy/goals. We also look what the performance management in the organization looks like. A discussion of how the organization rewards its employees is also performed. An analysis of the extent to which employee performance linked to reward is also evaluated. A recommendation for the necessary improvements for the various parts of the organization that perform well is also included on the basis of a well supported argument.

Introduction

The concept of workforce performance, reward and motivation has played a pivotal role in the success of various organizations. It is therefore important to ensure that the workforce of every organization is properly managed so as to avoid the bad effects associated with lack of reward or skewed rewards schemes that only rewards some employees while ignoring a large part of the workforce. The best strategy is therefore necessary to ensure that each and every employee is appropriately motivated so as to realize their full potential for the benefit of the organization. In this paper we analyze the Telstra case.

Background

Background of the organization

Telstra is an Australian telecommunications and media service company valued at about 25 billion. It has been ranked the 11th largest telecommunication company globally. It provides various services such as fixed line, broadband internet and mobile services. It also provides cable TV, Yellow Pages and online directory services.

The company is the leading telecommunications and information services company in Australia. It offers a broad spectrum of services in the Australian telecommunication sector.It provides over 8.6 million Australian fixed telephone lines and another 10.5 million services dedicated to the mobile phone services. This includes about 8.2 million services dedicated to the 3G technology. The company's strength in the provision of integrated telecommunications services is based on its vast geographical coverage using both fixed as well as mobile technology infrastructure. It provides both domestic and international telecommunication services (Testra, 2010).

The company was originally owned by the Australian government but then later got privatized in a series of stages beginning in the late 1990s.The company is the largest provider of local as well as long distance telephone services, dialup, wireless, mobile services, cable and DSL internet connectivity across Australia .Its headquarters are located at Telstra Corporate Centre, Melbourne-Australia. The former name of the company was Telecom Australia but it got renamed in 1993 to Telstra. The privatization took place between 1997 and 2006.

Organizational goals & strategy

The Telstra organizational goals and strategy are focused towards customer satisfaction while delivering services at unparalleled quality. Over the years, the company has taken chances in transforming its organizational culture so as to meet the demands of its clients. One of the strategies employed by Telstra is diversification. The company did this through a consideration of India as the major country in terms of its international growth. Through this venture of providing telecommunication technology services in the Indian market as well as planning to engage in extensive international growth is one of the strategies employed by the company. As a result of their diversification move from India, the company recruited several employees who are multilingual and then proceeded to set up various multilingual centers for the purpose of customer service as indicated in the India Telecom Series (p.112).It is therefore integral to point out that the business or rather the corporate strategy of the company is the people (employees) as well as their power to do whatever is necessary to satisfy the customers. This is done through a philosophy that places the customer to be first and the fact that each and every job affects the customer to large extent. Therefore the company undertakes all efforts to ensure that everything is done so that all the customers are satisfied and also to ensure that the company is way ahead of all its competitors. The other competitive strategy that the company employs is restructuring. This is performed in order to flatten the organization so as to respond to the needs of the customers in an improved system that is both effective and efficient.

Literature review

Extant literature has been dedicated to the concept of employee performance reward. These literatures are derived from a variety of field but all are dedicated to the concept of performance, reward and motivation.

The social psychologist view

The social psychologists used a series of experimental methods in to explain the concept of performance reward. Their analysis portrayed or rather let them to discover that performance-based pay does serve to enhance both the effort as well as improve the quality of the workforce as postulated by Landau and Leventhal (1976).

Economic theorist view

The economic theorist postulated that the performance contingent-based rewards have an effect of motivating the effort of the workforce attract their talent. These effects are however not observable as outlined by Holmstrom (1979) and Levinthal (1988).

Various organizational scholars have also cited that there are benefits associated with rewarding good performance in organizations.This view is shared amongst various scholars as indicated by the works of performance Lawier (1981) as well as Milkovich and Wigdor (1991).These findings have been shown to have a high level of consistency with the testimony fro0m a large number of organizations that claim make use of various forms of performance-based remuneration especially for employees who are exempt as outlined by Peck (1984) and Milkovich & Wigdor (1991).It is worth noting that pay-for-performance schemes are never like the simple incentive-based contracts or the piece rates that are assumed as well as examined by the agency and expectancy theorists (Zenger,2008).

Analysis of issues or themes:

The Telstra case of performance and rewards cleanly shows that there is some level of disparity that exists between the top management and the general workforce. This form of disparity has been shown to cause some form of organizational friction which must be appropriately. The main issue or rather theme that comes out of this situation is the fact that there is a disparity in the level of motivation and reward given for various forms of rewards.

The second issue and theme that comes out of the Telstra is high level of negligence towards the welfare of the workers. This is because the workers are subjected to a terrible performance gauging and disciplinary action checking system referred to as Performance Improvement and Conduct Management (PICM) which has been criticized heavily various authorities such as Australian Industrial Relations Commission and workers (Nedham, 2009).

Performance management

Telstra utilizes a 'performance improvement process' referred to as PICM -Performance Improvement and Conduct Management. The staff management system has been noted to be a cause of fear and agony amongst its workers. The cases of suicide that have been reported and linked to the system make it very unfortunate to implement and rely on such a system in gauging the performance of the employees. The performance management system at Telstra is very controversial as indicated by its criticism by the Australian Industrial Relations Commission (Nedham,2009).This is because it has been linked to suicide, intimidation and bullying of the workforce. The performance at Telstra is gauged by the level of customer satisfaction as well as a thorough review of certain cultural behaviors. This is a true indication that the company has focused a lot of attention towards the improvement of its customer experience. The measuring of both customer satisfaction level and the cultural behaviors that enhances organizational performance are carried out via a benchmarked group of targets that must be improved appropriately via the laid down corporate mechanisms and organizational culture (Marketculture,2010)

Link between reward and performance

In order to fully comprehend the correlation that exists between reward and performance, it is important to succinctly define the appropriate terms involved. The work of McCormick and Tifflin (1979) defines rewards as being intrinsic or extrinsic. The intrinsic rewards are derived from the rewards which are inherent in the job being performed. This is evident by the level of satisfaction that the individual performing the task at hand derives as a result of completing the task successfully to attain the goals defined earlier on. Extrinsic rewards on the other hand are those rewards that are external to the job being performed. They include details such as remuneration, work condition, security, condition of work and the environment. The Telstra situation of reward can be termed as just beneficial to the top management but unfriendly to the normal workforce. This is shown by the way they lack necessary components of job satisfaction such as job security as a result of the PICM… [END OF PREVIEW]

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