Organization choosen Baiduri
Baiduri Background
1.Introduction
1.1Report aim
The aims of the research were as follows:
•To critically evaluate an organization reward strategy and how its linked to managing individual and organizational performance.
•Describe the resistance that will be face if changes are implemented and suggest methods to overcome the resistance.
1.2Background of the organization
Baiduri Bank is one of Brunei largest Local bank. It started its operations in 1994. The bank shareholder includes Baiduri Holding, Royal Brunei Airlines, Royal Brunei Technical service and BNP Paribas. The Baiduri Bank Group consists of Baiduri Bank and Baiduri Finance. It is one of the largest Providers of Financial Products and services in Brunei Darussalam. The core business of the bank are services such as Institution or corporation, retail banking, Consumer financing and wealth management.
Baiduri Bank is first bank in Brunei to offer a wide choice of payment card such as American Express, Visa, Master Card and Union Pay. This is to meet customer need in different segment. The Baiduri Bank Group network consist of 12 bank branches, a finance arm of 2 branches and 28 ATM machine to ensure consumer can access to their service easily. The Bank also provides an internet banking service to provide consumer an extra convenience to meet their need such as making payment online. For the past few year the bank has won a lot of awards due to its services such as ‘Best Banking Group For Brunei’ in Brunei from 2009 to 2011 and ‘Company of the. decade 2001-2010’.
In the 2011 the total asset of the bank is measure to be BND 3.5 billion ranking it on the top place in the Brunei Banking Groups.

4.5 Reward

This is amongst the most used HRD methods used by an organization in order to motivate their employees to perform. By implementing a reward system employee will be more encouraged to improve themselves and are more willing to attend training since they know will improve productivity they will have recognition, receive additional benefit and will be well rewarded. The reward system is divided into two types.Intrinsic will be focusing toward satisfaction from the job such as new working environment, better position and in-service study which is fully funded by the organization. For extrinsic the reward will be based on monetary such as receiving bonus if target reaches this normally happen in a bank, Increase in salary, holidays and commission. There are higher chances of success if the employee wants to enhance their ability voluntary, this is where the reward system play a major role.
Component of reward stategY
Critical elements/variables to be considered before developing a reward strategy * Understanding the organization, its position in its life cycle, strategy, critical success factors and culture. * Understanding the workforce and its demographics. * Knowing the perceptions and values of stakeholders relative to remuneration. * Understanding the market in which you compete for skills, the areas of shortage and demand for scarce talent. * Understanding the environment in which the company operates.
Although rewards must be broadly aligned with the vision and strategic direction of the company, the realities of the situation as mentioned above, must be taken into account to ensure corporate strategy is successful transformed into a viable operational plan. Most strategies fail through poor implementation.
An effective reward strategy, balances strategic and operational goals, ensuring short term actions don’t negate long term opportunities and that the organization can attract, retain and motivate the quality of people it needs – people with the necessary skills, experience (and/or potential to develop these skills) to achieve it’s goals.
Components of a reward strategy include:
Paying for Performance
A remuneration strategy should ensure significant differentiation in reward between top performing employees and others, and a remuneration mix that is customized in a way that recognizes the preferences of different employee groups. The defensibility of pay is always enhanced within the company and without, when linked to performance and as such should be integral in any reward policy. Rewards perceived as an entitlement regardless of performance are neither cost effective nor motivational. Differentials in pay levels, increments and incentives favouring the good performers will drive positive behaviour.
Guaranteed pay
Guaranteed pay should be driven by market competitiveness (scarcity), internal equity, and individual performance. Whereas for example, competent performance could be linked to median rates, upper quartile guaranteed package rates should be reserved for outstanding performers rather than those with long service. To retain their position as outstanding performers, achievements should exceed the norms on a sustained basis with enhanced standards each year, rather than an historical once off achievement. The achievement bar for outstanding performance should be set high.
Market competitiveness represents rates relative to the economic community your organization may draw people from, or lose them to.
Short term incentives
Variable pay is an essential component of any reward strategy. Not only are they a mechanism for recognising work well done, they can ensure highly competitive earnings relative to the market. Whereas fixed pay levels inflate payroll and cannot easily be reduced, variable pay is more flexible and can be aligned to possible fluctuating individual and company performance and budgetary constraints.
The combination of reasonably competitive guaranteed pay, (as opposed to highly competitive), and an aggressive incentive scheme will motivate good performers and ensure optimum payroll spend.
Long term incentives
Executives and management should have a balance between short and long term reward as they need to focus on both operational and strategic issues. To emphasize the value placed on long term rewards as evidenced by market practice, a recent analysis by LMO found that CEO’s of major organizations were allocated shares, in good years, up to 15 times the value of their guaranteed annual pay. (The overall norm over 3 years was closer to 6x guaranteed pay). This does not take the appreciation of share values into account at time of vesting, otherwise these multiples would be appreciably greater.
The alignment of management’s and the company’s medium to long term interests remains the underlying value proposition for long term incentives. There has however been some fall-off in the practice of offering of share options due to tax and cash flow implications arising from new legislation. This has given rise to other options such as endowment policies, phantom shares, banked bonuses etc.
Performance Management
Reward linked to performance remains an effective and defensible strategy, an important consideration with the spotlight on executive pay and good governance. In this respect a key success factor is to create a performance – focused culture and a defensible credible performance measurement process. The challenge is to develop an environment where people know and understand the purpose and value of their work. Yet in many instances companies pay lip service to the concept and formal performance management programmes are not always a success: “Performance management is one of the tools for creating a more efficient and profitable business that has often historically been viewed as ineffective, highly political, and a time-consuming chore”. Yet there is not a single company that would not welcome a system that can deliver: * Clearly articulated goals so employees and managers understand expectations. * Valid information on just how well they are doing. * Fair and equitable reward linked to performance. * Tactful and just-in-time feedback on areas in need of improvement. * Identification of opportunities for personal development.
To be effective the management of performance needs to be a formalized process with performance measures updated at least annually, formal reviews held regularly and development plans agreed and monitored. This requires senior management’s commitment and active participation.
Personal Development
Performance management system
A key reward broader than remuneration, is the extent to which employees can grow in the job – the extent to which their skills are enhanced in order to qualify for greater job challenges. Practice has shown that personal development, work challenge and opportunities for career progression are all motivators that play a major role in the attraction and retention of staff.

Performance management systems are closed-loop systems that drive consistent, highly-effective, high-quality outcomes through a human resources effort that feeds and drives a predictable stream of operational, strategic, persistent, financial success stories and tactical.

Performance management is a continuous process of identifying, measuring and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization. Continuous process is ongoing performance management. It involves a never ending process of setting goals and objectives, observing performance, and giving and receiving ongoing coaching and feedback. Alignment with strategic goals is performance management requires that manager ensure the employees activities and outputs are congruent with the organization’s goals and, consequently, help the organization gain a competitive advantage. Performance management therefore creates a direct link between employee performance and organizational goals and makes the employees’ contribution in the organization explicit.

Note that many organizations have what is labeled a “performance management” system. However, we must distinguish between performance management and performance appraisal. A system that involves employee evaluations once a year without an ongoing effort to provide feedback and coaching so that performance can be improved is not a true performance management system. Instead, this is only a performance appraisal system. Performance appraisal is the systematic description of an employee strengths and weaknesses. Thus, performance appraisal is an important component of performance management, but it is just a part of a bigger whole because performance management is much more than just performance measurement.

Performance management systems that do not make explicit the employee contribution to the organizational goals are not true performance management systems. Making an explicit link between an employee performance objectives and the organizational goals also serves the purpose of establishing a shared understanding about what is to be achieved and how it is to be achieved.
There are many advantages associated with the implementation of a performance management system. A performance management system can make the important contributions such as motivation to perform increased, managers gain insight about subordinates, self-insight and development are enhanced, administrative actions are more fair and appropriate, organizational goals are made clear, employee become more competent and there is better and more timely differentiation between good and poor performers.

Poorly designed and implemented performance management systems can have disastrous consequences for all involved. For example, employees may quit, those who stay may be less motivated, and relationships between supervisor and subordinates can suffer irreparable damage.

6.1Reward and Benefit

DST should offer their employee different reward and benefit accordingly to their Position and rank in the organization. This will greatly improve and motivate the employee to perform better and have an impact on the company productivity.

6.1.1 Allowance

DST Group should implement a new approach to lighten the burden of its employee by providing allowance. These allowances can have special purpose such as transportation allowance for its employee who are living quite far in their workplace.Other allowance that they can provide are like housing allowance and holiday allowance.

6.1.2 Special rates and Price for Staff

DST Group has various products and service. They should provide special rates and price for their current employee in order to show their appreciation to their employee. By doing so, it not only increase the number of users of their product and service but also indirectly motivates them to work harder for the company and intensified their efforts for long-term commitment.