(Solution) 5HR03 Question 1. AC 1.1: Explain the principles of reward and its importance to organisational culture and performance management at Mercy Frontier

Solution

Transparency

Transparency – employees will be able to see how reward decisions are made, what evidence is available, and how service and job performance or job value influences reward. Clear rules diminish the chance of suspicion and allow challenge prior to embedding of inconsistency. The literature on organisational justice indicates that clearly stated procedures influence trust and acceptance (Colquitt et al., 2013), so it is imperative that Mercy Frontier make the following decision transparent in the 35 countries in which they operate.

Fairness

What is fair is to receive the same standard as other jobs similar in nature and execution – and the same standard applies to everyone involved – and to receive genuine differences objectively judged. Employees evaluate products overall, as well as the way they achieved products, which affects commitment and cooperation (Colquitt and Zipay, 2015).

Importance to organisational culture

Reward is a reflection of the measure of value the charity possesses. Sometimes, humanitarian service, teamwork, responsible stewardship, and challenging field assignments are non-negotiables and can be acknowledged with more than just a certificate of good attendance. “Reward strategy should be linked to financial and non-financial provision in line with organisation’s purpose (CIPD, 2024)” and via this lay Mercy the reinforcement of social justice and responsibility but not a culture of commercialism. Having fairness and a consistent message between what is said and what is given in reward practice increases trust and credibility by employees.

Importance to performance management

Reward also has real-world implications and can inspire staff to contribute towards meaningful outcomes. On one hand,

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