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Legal and General plc, one of Britain's large insurance companies is taking practical steps to devise and implement a Business Strategy for change in its largest sector - Life and Pensions.

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Introduction

1.0 INTRODUCTION Legal and General plc, one of Britain's large insurance companies is taking practical steps to devise and implement a Business Strategy for change in its largest sector - Life and Pensions. Their "Vision for the Future" is to change the way people work. They have adopted a framework of change that strips middle management; and results in a shorter chain of command which should ensure future success by increasing the competitiveness of its products reducing administration costs, and improving customer service. "What will this change mean to Legal and General plc?" The managers' perspective on change is results oriented; the employees consider how the change will impact on them personally. If the change is not managed properly, these different values and driving forces clash resulting in unfortunate outcomes for the business. Legal and General plc adopted a Human Resource (HR) Strategy framework of teams. Teams depend on the culture of the company in which they exist, how people act and interact. If a company's culture is supportive and trusting then there is a good chance that teams will be successful. To ensure teams develop in a healthy environment, a favourable reward strategy needs to be implemented. Reward strategy is defined as 'the intentions of the organisation on the reward policies, processes and practices required ensuring that it has the skilled, ...read more.

Middle

See Table 1 Non- Financial Motivation Legal and General plc Achievement Achievement motivation can be increased through processes and systems such as job design, performance management, and skills-based and competence-based pay schemes. Recognition Financial and non-financial rewards operate mutually to reinforce this form of reward. Recognition is provided by positive and immediate feedback Responsibility Levels of responsibility vary because of a corporation's empowerment and cultural differences. Influence The size of organisation helps, but internal politics can overshadow employee's influence. Personal Growth Important as long as individuals stay and grow. This may be difficult due to change. Broadbanding often leads to a decrease in the aggregate number of workers and/or higher productivity, due to the versatility of the worker. It is essential that the union negotiate to ensure that workers are appropriately compensated for their skills. At Legal and General plc pay is based on local and not national market rates. Care has to be taken that in some countries, employees will not be severely underpaid, due to the currency exchange rates. This may cause some amount of displeasure. Staff will be assessed for their bonus based on individual targets set at their yearly performance appraisal. This can be deemed highly unfavourable because it may be difficult to assess individual performance on a yearly basis when employees are working in teams. ...read more.

Conclusion

The extent of the company's resources and how much it is prepared to invest in its people needs be considered in terms of both tangible and intangible rewards. This implies two key points. First, that reward expectations of individuals now go beyond the tangibles of pure cash and benefits. Secondly, if an organisation is not prepared to consider the intangibles, it must face the potential consequences - in terms of absenteeism, demotivation with its negative effects on performance and effort, staff turmoil and retention difficulties. To improve this situation, some organisations use 360-degree appraisal to modify the appraisal system, but since the basic problem of appraisal is people, such modification cannot solve the problem thoroughly. 6.0 CONCLUSION: Rethinking compensation or a desire to develop, mobilise and reward people more effectively, leads to varied outcomes. The key internal outcomes are: * Aligning individual performance with corporate objectives * Retaining key people * Recognition by employees that rewards are fair * Higher levels of motivation and morale * Attracting high calibre recruits * Differentiating between high, average and low performers. These findings set the case for strategic compensation - appropriately interpreted, designed and delivered which usually results in business and organisational benefits. A well-structured reward strategy aligned to business goals; tailored to the needs of those employees most likely to influence the business; can have a significant impact on business performance. ...read more.

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