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T205B Systems Thinking Theory And Practice

tag 0 Download 13 Pages / 3,235 Words tag 21-07-2021


At RBS almost every role can be described in terms of specific job targets. This method of performance management allows managers to measure each individual's performance in a specific way and reward them accordingly. RBS employees will agree job objectives and targets with their line manager at the beginning of the year. Their performance is then measured and reported on during the year. At the end of the year they will have a performance review. Payments for results are an effective motivator for high performance.

Some jobs are paid according to the achievement of targeted results. This means that a bonus is paid if the employee achieves agreed targets for the job. For example, a corporate banker has responsibility for gaining a certain number of new business customers each year. If the target is achieved or exceeded she/he will get a bonus payment. Particularly challenging or difficult to achieve targets are known as 'stretch targets' and the reward for achieving these will be greater.

Frederick W. Taylor (1911) was the creator of 'scientific management'. He felt that every job was measurable and each element of a job could be timed. All managers had to do was pay for every item the workers produced and they would work harder to get more money. This led to a long established pay scheme called the 'piece rate', where workers received a fixed amount for every unit of output. Schemes like this are usually associated with manufacturing industries and are not appropriate for a complex service-led organisation like RBS.

Another theorist, Frederick Herzberg (1959), carried out a large-scale survey into motivation in American industry. The results of his survey led him to develop a 'two-factor' theory of motivation. Firstly, he established that if an employee's basic needs (such as a suitable working environment and a basic rate of pay) were not met, then this creates a source of dissatisfaction. Herzberg termed these 'hygiene factors'. On the other hand, the presence of less tangible factors, such as the provision of challenging work and recognition for doing well, can create or increase work motivation. Herzberg termed these 'motivators'.

RBS has put in place several of Herzberg's 'motivators':

  • employees get recognition for good work
  • they have a collective sense of achievement when the whole business does well
  • they gain extra responsibility and advancement through regular performance reviews
  • when RBS people do well in their work, the company rewards them.
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