Submission of Summative Assessment

Assessment Details

HR5067NI Leading Managing and

Module Code and Title
Developing People

Course Title BA (Hons) Business Administration

Level Level 05

Cohort Spring 2023

Credit Semester-long

Component # Comp 001

Weight 50%

Assessment Title Individual Written Coursework (2000 words)

Module Lecturer Ms Sajina Karki

Submission Details

Student’s Name/s University ID

Yeswi Chhetri 21049438

Date of submission (DD-MM-YYYY) 05-13-2023

Word count # 2152

Table of Contents
Question number 1 .......................................................................................................... 3

Question number 2 .......................................................................................................... 5

Question number 3 .......................................................................................................... 7

Question number 4 .......................................................................................................... 9

Learning Reflection ....................................................................................................... 11

References .................................................................................................................... 13
Question number 1

Using Heller’s framework of future manager, identify the features that Dan Price
possess.

Business excellence, according to Robert Heller in his book "In Search of European
Excellence: The 10 Key Strategies of Europe's Top Companies," is determined by ten
criteria: (transforming enterprise culture, initiating radical changes, dividing the company
for success, leveraging new leadership methods, staying ahead of the competition,
pursuing continuous improvement, motivating employees, fostering work teams, and
achieving Total Quality Management) (Robert Heller, 1997).

Applying Heller's framework to Gravity Payments CEO Dan Price reveals several notable
characteristics, as evidenced by his decision to raise the minimum wage for all
employees.

Leadership Development:

Dan Price demonstrated strong leadership skills by making courageous decisions that
had both positive and negative consequences. He accepted responsibility for his decision
and faced the consequences (Oh, 2016). Dan Price represents Transformational
Leadership by inspiring and motivating others to achieve extraordinary results. His
decision to raise the minimum wage to $70,000 demonstrates his courage and
accountability. He addressed income inequality and became a media hero, showcasing
his vision for positive change (Rolfe, 2011).

Drive for radical change:

The CEO’s decision to increase the minimum salary represents a radical change in the
company’s compensation structure. He took the issue of income inequality into his own
hands and implemented a significant change within his company (Oh, 2016). This
demonstrates his willingness to challenge traditional norms and implement innovative
approaches to benefit the employees. This is consistent with the Organisational Change
Theory, which emphasizes the importance of organisations adapting to external
pressures and embracing innovative strategies (Carnall, 2008). The CEO's action shows
a proactive approach to addressing income inequality and creating a more equitable
workplace.

Reshape culture:

Dan Price reshaped the company’s culture within Gravity Payments by addressing
income inequality and promoting fairness (Oh, 2016). According to equity theory
developed by J. Stacy Adams and Elliot Jacques, people strive for fairness and equity in
their social interactions. Employees are motivated to maintain a balance between their
inputs (such as effort, skills, and contributions) and the outcomes (such as rewards,
recognition, and benefits) they receive in comparison to others, according to the theory
(Morrison Coulthard, 2004). Dan Price aimed to create a more equitable work
environment by raising the minimum wage and reducing income inequality. Employees
who previously earned lower wages would feel a greater sense of fairness and value in
their compensation, which could lead to increased motivation and job satisfaction.

Managing motivators:

Price's decision to raise wages was motivated by a desire to address income inequality
and create a more equitable workplace. However, it had unintended consequences, with
some employees feeling unworthy of the sudden rise and feeling under pressure as a
result (Oh, 2016) (Bryant and Wong, 2017). This decision by Dan Price and the
unintended consequences experienced by some employees can be related to the theory
of motivation in terms of extrinsic motivation which refers to doing something because of
external rewards or consequences or punishment (Locke and Schattke, 2019).

Using Heller's framework, we can identify Dan Price of Gravity Payments' characteristics
as a future manager. These include strong leadership, a drive for radical change, culture
reshaping, motivator management, and ensuring a competitive edge by addressing
income inequality and promoting workplace equity.
Question number 2

What was the purpose of the big announcement and analyse if this announcement is
able to improve employee’s motivation and commitment?

Gravity Payments' big announcement was to raise the minimum salary for all employees
to $70,000. The purpose of this announcement was to address the issue of income
inequality and to portray the CEO, Dan Price, as a hero and the "world's nicest boss" (Oh,
2016).

To the mixed reactions to the decision to raise the minimum wage, it is important for an
HR Manager at Gravity Payments to address the company's challenges and retain
efficient employees. When analyzing whether this announcement will improve employee
motivation and commitment, it can be stated that the impact will vary depending on the
employee.

The pay increase for around 30 employees, along with raises for 70 others, would likely
boost motivation and dedication, as they would perceive it as recognition for their hard
work, resulting in higher job satisfaction and engagement. However, the remaining 50
employees earning above $70,000 may feel undervalued and less motivated, considering
the raise unfair (Oh, 2016). This could lead to resentment and reduced commitment
among them. This aligns with Adam’s equity theory (1963 and 1965) as the employees
compare their own salary increase to others and evaluate the fairness of distribution.
Ensuring perceived fairness in the raise allocation can enhance motivation and
commitment (Al-Zawahreh and Al-Madi, 2012).

Furthermore, some employees who received raises expressed concerns and pressure as
a result of their higher pay. They were unsure whether they deserved the raise and were
concerned about meeting higher expectations. This could add to their stress and
negatively impact their motivation and commitment. This relates to expectancy theory
developed by Victor Vroom (1964) where he explains that employee’s motivation is
influenced by their perception of the link between their effort, performance and rewards
(Lee, 2007). According to Expectancy Theory, three key factors influence motivation:
expectancy, instrumentality, and valence. Employee expectancy in this scenario refers to
their belief that their increased efforts and performance will result in meeting the higher
expectations and justifying their raise. If they lack confidence in their abilities or believe
that expectations are too high, their motivation may suffer (Lawler and Suttle, 1973).

The decision to raise salaries had a significant impact on the company's profitability. This
relates to reinforcement theory. The consequences of behavior, according to the
reinforcement theory, influence it (Adams, 2000). In this case, raising salaries can be
viewed as positive reinforcement for employees. However, the financial consequences
for the company's profitability may have unintended consequences for employee
motivation and commitment. If the company runs into financial difficulties or is unable to
sustain salary increases over time, it may result in negative reinforcement and potentially
demotivate employees.

To summarize, while raising the minimum wage had the potential to increase motivation
and commitment among some employees, it also created challenges and dissatisfaction
for others. Employee reactions to the announcement could be influenced by factors such
as current salaries, perceived fairness, and the financial impact on the company.
Question number 3

Do you agree that bigger paychecks have led to fiercely loyal employees? How do you
evaluate the impact a $70K minimum had on the overall well-being of the employees?

Dan Price, the CEO of Gravity Payments, made headlines in 2015 when he announced
that all of his employees would be paid a minimum of $70,000 per year. This decision
was made to improve his employees' overall well-being. While it received both positive
and negative feedback, it sparked debate about the impact of higher wages on employee
loyalty and well-being (Oh, 2016).

According to equity theory, individuals should compare their inputs (effort, contribution)
and outcomes (rewards, benefits) with those of others to see if they are being treated
fairly (Al-Zawahreh and Al-Madi, 2012). Employees who were previously earning less
may perceive Dan Price's decision to raise the minimum wage as a fair adjustment and
experience increased job satisfaction and well-being. Employees who were already
earning higher salaries, on the other hand, may perceive the change as unfair and react
negatively, potentially leading to a decrease in loyalty or even leaving the company.

While some employees at Gravity Payments may have felt more loyal to the company as
a result of the salary increase, it is clear that not all employees felt the same way. The
departure of the company's best employees suggests that the decision had a negative
impact on at least some people (Oh, 2016). Furthermore, a lawsuit filed by an employee
who expressed concerns about the company's long-term viability indicates that the
decision was not universally accepted (Bryant and Wong, 2017).

It is important to conduct surveys or interviews to gather employee feedback when

evaluating the impact of the minimum wage increase. This is consistent with Ulrich's
description of HR professionals as employee champions who advocate for employees'
rights and interests (Armstrong, 2007). Organisations that consider performance
management principles can provide direction, freedom, encouragement, and growth
opportunities to improve overall well-being and loyalty (Ulrich et al., 2012) .
Furthermore, the best practice theory HRM emphasizes the importance of various
components in improving employee attitudes and behaviors, such as training,
involvement, and work-life balance (Gould-Williams and Mohamed, 2010). The $70,000
minimum wage is part of a larger HRM strategy aimed at improving organisational
performance through increased employee satisfaction and retention.

In conclusion, while higher pay can improve employee well-being and potentially foster
loyalty, it is not a guarantee. Employee perceptions and responses to salary changes are
influenced by a variety of factors, including individual perspectives and circumstances.
To accurately assess the impact, a comprehensive assessment of multiple factors is
required, including employee feedback and key performance indicators.
Question number 4

The benevolent move didn’t please some employees and stakeholders. As an HR

Manager, how would you retain the efficient employees and address the challenges
faced by the company?

As an HR Manager faced with the challenge of retaining efficient employees and

addressing the company's challenges in the aftermath of the Gravity Payments salary
increase, it is critical to consider conflict handling and communication theories.

Open and Transparent communication:

To ensure effective information flow within the organisation, it is important to use vertical
(top-down and bottom-up) and horizontal communication channels (Forza and Salvador,
2001). Addressing employee concerns and feedback about the salary increase and
holding regular meetings or employee surveys to give employees a forum to express their
ideas and concerns and explaining the rationale for the decision and emphasize the long-
term benefits to the company and its employees. This supports the two-way
communication in which the concept emphasizes the importance of providing
opportunities for employees to provide feedback, share concerns, and participate actively
in decision-making processes (Tourish, 2005) .

Employee Engagement and Recognition:

Implementing employee recognition programs to recognize and appreciate employees'
contributions and accomplishments. This has the potential to improve morale and job
satisfaction. This relates to social exchange theory which emphasize that when
employees contributions and efforts are recognized and rewarded, they develop a sense
of reciprocity and are more likely to be engaged and committed (Mitchell, Cropanzano
and Quisenberry, 2012). Making opportunities for career development and growth
available through training programs, mentorship, or performance-based promotions is
also important according to Maslow’s hierarchy of needs, which includes physiological,
safety, social, esteem, and self-actualization needs. Organisations address employees'
higher-level needs by providing training programs, mentorship, and performance-based
promotions, resulting in increased engagement and satisfaction (Jerome, 2019).
Organisations address employees' higher-level needs by providing training programs,
mentorship, and performance-based promotions, resulting in increased engagement and
satisfaction.

Performance Management and Feedback:

Establishing clear performance metrics and goals for employees that are in line with the
company's goals and conducting regular performance reviews and provide constructive
feedback to employees in order to help them improve and grow in their roles. This aligns
with goal setting theory that emphasizes on the importance of clear targets to enhance
employee performance and motivation (Latham, Borgogni and Petitta, 2008).

Conflict Management:
Encouraging an open dialogue and mediation in order to reach resolutions that are
acceptable to all parties involved. Managers and employees should be trained in conflict
resolution techniques in order to handle conflicts constructively and prevent them from
escalating. By implementing these strategies, a supportive work environment can be
created, employee concerns addressed, and efficient employees retained (Thomas and
Kilmann, 1974). These are consistent with Conflict Management principles and practices,
emphasizing the importance of addressing conflicts proactively, promoting open dialogue,
providing conflict resolution training, and creating a supportive work environment.

In conclusion, HR Managers should prioritize open communication, employee

engagement, performance management, and conflict resolution in order to retain efficient
employees and address post-salary increase challenges, while also creating a supportive
work environment.
Learning Reflection

I gained a thorough understanding of Leading, Managing, and Developing People and

their importance in organizational success from weeks 1 to 11 of the HRM module.

HRM is concerned with workforce management, which includes recruitment, work design,
compensation, training, and retention, with the goal of ensuring that the right people with
the right skills occupy appropriate roles. Human resource development (HRD) focuses on
the development of employees' skills and knowledge through training programs, career
planning, and performance management systems. Furthermore, I investigated three
theories that underpin performance management: goal theory, reinforcement theory, and
social cognitive theory. To improve employee performance, these theories emphasized
the importance of setting clear goals, providing feedback, reinforcing positive behavior,
and creating a supportive work environment.

I studied performance management principles, which emphasized providing employees

with direction, freedom, encouragement, and growth opportunities in order to foster
strategic collaboration. Best practice HRM emphasized the positive impact of specific HR
practices on employee attitudes, productivity, and profitability, such as employment
security, selective hiring, training and development, and work-life balance.

The role of human resource development in organizational performance and customer

service was also investigated. HRD can help by facilitating employee skill development,
talent management, and cultivating a positive organizational culture that is aligned with
strategic goals. Furthermore, through effective training, development, and support, HRD
ensures strategic alignment, continuous improvement, and excellent customer service.

Furthermore, lectures on stress, communication, conflict resolution, personality traits,

motivation, and the psychological contract shed light on critical aspects of organizational
behavior. I learned about the causes and effects of workplace stress, different
communication barriers, behavioral stances, conflict resolution strategies, personality
traits, motivation theories, and the role of the psychological contract in fostering
commitment and engagement.
Overall, this module has allowed me to understand the importance of effective people
management, performance enhancement, and organizational development. I've gained
valuable insights that can be applied to real-world scenarios, and I'm excited to continue
exploring these ideas in my academic and professional endeavors.
References

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Armstrong, M. (2007) A handbook of employee reward management and practice. 2nd

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Bryant, S. and Wong, K. (2017) ‘GRAVITY PAYMENTS: SETTING THE WORLD OR

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