You hold the HR directorship of a local company in Durham, which employs 100 workers (all in a managerial position). The company usually offered an incremental pay rise of 3 per cent every year. It also offered some benefits such as health insurance, life insurance, and private pension plan. The cost of living and the high inflation are influencing the organisational revenue. You were asked to rethink the Employee Rewards including the pay rise and the benefit system and to consider withdrawing the private pension plan. Based on that information please answer the following:
1) What external influences do you need to check before responding to the HQ’s demands? Explain what influences you have to consider on the Employee Rewards. (50 per cent)
2) Presuming the changes are implemented what are the potential consequences for the managers? (You can draw from motivational theories to answer the question). (50 per cent)