Jamaica Essays (956 words) - Island Countries, British West Indies

Jamaica Close your eyes and picture a beautiful sunset meeting far away on the shimmering clear blue water in front of you. You feel a cool breeze and a hot sun against your skin and the feeling of the warm sand beneath your feet. You walk forward and feel the refreshing water wet your legs and you are tickled as a school of tropical fish passes you by. You spot the palm trees and wild plants off the shore. Are you in an unreal paradise? Yes I have. It is Jamaica. Geographical Location Jamaica is blessed with superb geographical location and resources that makes it a great vacation spot. It is an island country south of Cuba and north of South America. So you must fly or sail there. Its short distance from the United States makes it a short distance from here and that is great for fliers. It is probably a four -hour flight. Jamaica is only about 17 degrees above the equator so it is very warm all year round. (Grab your sunglasses and tanning oil!) Land and Resources Everyone sees the commercials for the white-sanded beaches and the clear blue water but Jamaica's terrain is mountainous except for those several tracts of lowlands that you see on TV. In fact Blue Mountain's, that is the highest mountain in Jamaica, is 7402 ft. There are many smaller mountains with many traverse spurs that extend west to the extremity of the island making a gigantic plateau. So if you plan on going to Jamaica you had better think of bringing your hiking boots. Lead and Salt deposits can be found on the island and rich soils can be found on the coastal plains. The island is also equipped with excellent natural harbors, including those at Kingston, Saint Ann's Bay, Montego Bay, and Port Maria. There is no volcanic activity in Jamaica but it is subject to severe earthquakes. Plants and Animals Jamaica is filled with luxurious and diverse vegetation. More than 200 species have been identified. The indigenous tree include such as the cedar, mahogany, rosewood, ebony, coconut palm, and pimento. Introduced varieties such as the mango, breadfruit, banana, and plantain also flourish the island. Jamaican animal life generally includes highly diverse bird life. This group includes Parrots, hummingbirds, cuckoos, and green todies. No large four-legged animals or venomous reptiles exist there. Culture Jamaica is not only blessed with great plenty of natural wonders but it's people and their culture are probably it's greatest resource, and that is what draws the people to the island. Jamaica's great dependency on Great Britain form the past 300 years shows in the language they speak and in their customs, which are combined with African influences. Bob Marley, Jimmy Cliff, made Reggae, a distinctively syncopated style of Jamaican music popular in the 20th century. It was a great influence on rock in the middle of the 80's, especially in Britain. Government The Jamaica constitution, promulgated in 1962, established a parliamentary system of government patterned after that of Great Britain. The Prime Minister is the head of the government. The British monarch is the head of the state and is represented by a governor general, who is appointed on the advice of the Prime Minister. There is an Executive branch, a Legislative branch, and a Judiciary branch. Their government is quite like ours. The Prime Minister has a lot of power, kind of like our president. Jamaica has two political parties. The People's National Party (PNP) is one. It is socialist in orientation. The other is the Jamaica Labour Group (JLP) which supports free enterprise in a mixed economy. A minor party is the Jamaica American Party, which favors U.S. statehood for Jamaica. Language and Religion In Jamaica, the principle language spoken by the people is English. It is spoken with a local dialect that includes African, Spanish, and French elements. Christianity is the main religion practiced in Jamaica. Other religious groups are Baptists, Anglicans, Seventh-day Adventists, Pentecostalists, and Roman Catholic. In addition several Jewish, Muslim, and Hindu communities exist. A number of popular groups, such as Pocomania and Rastafarianism, are significant and famous in the Jamaican religious life. History Members of the Arawak tribe were the aboriginal inhabitants of the island. They named it Xaymaca. Christopher Columbus sighted the island during his second voyage, and Xaymaca became a Spanish Colony in 1509. The Arawak quickly died out due to disease and harsh treatment. African slaves were imported to overcome the resultant labor shortage. An English naval force under Sir William Penn captured Jamaica

Category Management Essays

Category Management Essays Category Management Paper Category Management Paper Working Paper: Category Management (CM) in Indian Marketing Context M Scalem† , Divyanshu† Ã¢â‚¬   † Management Information Systems [MIS] Department, Indian Institute of Management-Calcutta (IIMC), Joka, Diamond Harbour Road, Kolkata, West Bengal State, India 700104. Email: [emailprotected] ac. in † Ã¢â‚¬   Consultant, i2 technologies India Pvt Ltd, Andheri (East), Mumbai, State of Maharashtra, India 400 096 Email: [emailprotected] com Abstract Category management has been a potent tool for transformation of retail industry worldwide, especially the US. The USP of Category management is in the fact that instead of the emphasis on brands within a single category of products thereby enhancing competition within a category, it takes a holistic view of the category and attempts to maximize profits for the whole category. By doing so, it professes to optimize profits of the individual brands within the category also. In India, the modern retail industry is in a nascent stage but with a huge potential and a rapid growth projected in near future. There is much scope for venturing into category management, given its proven applicability in the West and its feasibility in transforming Indian retail industry. This paper proposes a strategic framework for implementation of Category Management in India as also the guidelines for doing the same. Keywords Category, Category Management, Indian Retail Industry, Category Captain, Retailer-Supplier Relationship, Retailer-Consumer Relationship. 1. INTRODUCTION Category Management can be defined as a retailer-supplier process of managing categories (distinct manageable group of products) as Strategic Business Units (SBUs), producing enhanced results by focusing on delivering consumer value. Category management was developed as a strategy for retailers to successfully compete in each retail category for the shopper’s loyalty and money. Traditionally, retailers used to assign buyers to purchase brands of specific manufacturers instead of making all purchases within a particular product category. Category Management approach, on the other hand, has put orward a new method of doing business for the retail industry. It recognizes the interrelatedness of products in the category and focuses on improving performance of whole product category rather than the performance of individual brands. The traditional brand–oriented buyers are replaced with category managers who are responsible for integrating procurement, pricing and merchandis ing of all brands in a category and jointly developing and implementing category based plans with manufacturers to enhance the outcome of both parties (Pellet, 1994; Progressive Grocer, 1995 a and b; Supermarket news, 1997). A category is defined as a distinct manageable group of products that consumers perceive to be related and/or substitutable in meeting a consumer need (FMI, 1995) and the Category management insists that retailer’s categories, rather than the manufacturer’s brands, become the focus of management resources. The operating assumption of category management implies that performance in a category at the retail level will result in improvements in the suppliers’ performance whose brands are sold through the category. The category management theory posits that retailers can maximize their sales in the category through an optimal mix of brands, SKUs, and pricing that is determined from the consumer’s perspective and is based on historical sales data (Gruen, 1998). Once the retailer’s sales in maximized in the category, the equilibrium established within the category would be the best-case scenario for each individual brand. 2. CATEGORY MANAGEMENT vs. BRAND MANAGEMENT The approach discussed above runs counter to the manufacturer’s brand management paradigm that views positive result mainly when the brand managers’ SKUs gain shares in the category. Brand management approach postulates that brands require a dedicated advocate to maximize their market potential. It encourages a type of â€Å"Darwinian† environment in which the strongest brands survive. In case a brand is weakening in the market, the brand management principle says it is better to have a sister brand take its position rather than some other brand in the same category. As opposed to the holistic approach of category management, brand management encourages intensification of competition within a category. Competing brands within a category actually give rise to a lot of cannibalization problems where a lot of resources are wasted on countering each other’s competitive moves. This problem would get more severe when consumer loyalties are diminishing and hence this is both a challenge as well as a business problem. 3. INFLUENCE OF ENHANCED RETAILER POWER ON CATEGORY MANAGEMENT The greatest factor that holds category management as the paramount strategic policy of future and keeps it somewhat favorably compared to brand management is the increasing power and sophistication of the retailer. Whereas traditional retailers may have relied on the manufacturer for information and expertise, contemporary retailers are often in a position to dictate marketing policy to the manufacturer. This change has created a two–pronged effect (Zenor, 1994): a) The retailer has started taking many decisions regarding pricing, advertising, merchandising, promotion etc. traditionally associated with the brand manager. b) The strength of the retailer increases the importance of the sales force for presenting a united effort across the firm’s product line. Both these effects have led to the transfer of power away from the brand–management group and coupled with this is the rising interest of retailers in category management. In the recent past, studies have shown the increasing interest of retail chain operators into category management. In a report (Progressive Grocer, 1996), 83 % of retailers viewed category management as the most important issue facing them. In another study (Chain drug review, 1997), Category Management initiatives were shown to be the most important reason behind retailers improving their technology systems. Such trends seem to continue; with its implications on the way principles of category management are getting shaped. 4. THE STRATEGIC FRAMEWORK FOR CATEGORY MANAGEMENT A very popular report (Category Management Subcommittee et al. , 1995) presented the process of applying category management principles to practice. This report essentially contains the how-to of Category management and lays out eight critical steps that are necessary for a proper implementation of CM by a retailer. We present this framework here to facilitate the understanding of the strategic structure and process surrounding CM to evaluate the outcomes of its implementation effectively. Step 1: Category definition This step determines the products that constitute a category, sub-category and major segmentation. At this step, the retailer assigns products to the various categories based on factors such as consumer usage and packaging. The category definition should include all products that are either highly substitutable or closely replaced. So, there may be a category of soaps with a sub-category of toilet soaps; or there may be a separate category for toilet soaps altogether. Similarly, there may be a category for soft drinks and a separate one for soft drinks in cans, or the second one may be a sub–category. Step 2: Category role This step assigns the category role based on a cross-category analysis that considers the consumer, distributor, supplier, and marketplace. Designing a category role gives the retailer a perspective to allocate resources among various categories. Traditionally, four category roles have been identified and are as follows: a) Destination Categories: These are the ones in which the retailer positions itself as the store of choice to the consumers by offering better value. b) Routine Categories: These are those that the consumer purchases as matter of routine. Toothpastes, soaps etc. form part of this group. Figure 1: The Category Management Strategic process c) Convenience Categories: These are the categories that the consumer finds convenient to pick up at a neighborhood retailer rather than go to a distant retailer offering better value. Stationery products, and certain commodity items form part of this group d) Seasonal/Occasional Categories: These are purchased infrequently or seasonally. Seasonal fruits and similar food items are part of these groups. Some of the seasonal categories may become part of the destination category group in that season for the retailer. Step 3: Category Assessment This step involves gathering and analyzing historical data and relevant information and then developing insights for managing the category. At this stage, a detailed assessment of the sales, profit and return on assets opportunities is done on the basis of an analysis of categories’ components including elements such as sub–categories, brands and SKUs. Step 4: Category Scorecard This step involves establishment of performance measures to evaluate program execution. At this stage, baselines and targets are established. The category role matrix is used here along with other parameters such as GMROI (Gross Margin Return on Investment), return on inventory goals, service levels and so forth. Step 5: Category strategies This step involves the development of marketing strategies for the category. Category marketing strategies can be classified into demand-chain and supply-chain categories. The strategies regarding cash generation, traffic building, profit, transaction, image, and excitement creation come under the demand-chain strategies. The strategies regarding merchandising flow and transaction costs come under the supply chain strategies. Step 6: Category tactics This step involves the determination of optimal category pricing, promotion, assortment, and shelf management that are necessary to achieve the agreed-on-role, scorecard, and strategies. Literature (Category Management Report, 1995) proposes that pricing policies should be applied to the current prices to develop price changes and set overall price changes for the category. Promotional prices should be applied in the development of a promotional plan that includes frequency of promotions and recommended price points. Step 7: Category Plan Implementation This is the stage where the action happens by virtue of implementation. The implementation plan includes what specific tasks need to be done, when each task should be completed, and who is to accomplish each task. The implementation of the category plan is perhaps the most vital linkage in the entire chain. Step 8: Category review This step involves the regular management of the intended results of the overall plan. Reviews should be scheduled at established intervals and listed in the implementation plan. Choice and implementation of category strategies is one of the keys of category management process. Retailers practice category management with several ends in mind, but increasing profitability, increasing revenue and optimizing item mix are some of the most important strategies (AC Nielsen, 1998). With such a strategic framework, the performance of category management is dependent on the strategic and operational efficiencies of the implementation procedure. A lot of factors decide the performance of a particular category functioning under the purview of category management. 5. STRATEGIC MODEL FOR PERFORMANCE OF CATEGORY MANAGEMENT As has been discussed above, a lot of inputs have to be factored into, while devising a model that guides the performance of the category management procedure. Essentially, the performance depends upon the three basic groups involved in category management and the kind of relationships that. These three groups are: a) Consumers, b) Retailers, and c) Suppliers. Category management is provided its operational form at the retail outlet level. Thus the retail outlet, and by consequence, the retailer becomes the central figure in category management strategy formulation and implementation. The consumer is obviously the key to all decision-making and the suppliers form the third part in the sense that they have to perform most of the category management tasks. The two relationships that are keys to category management performance are: (i) Supplier – Retailer Relationship (ii) Retailer Consumer Relationship We propose a model to illustrate the overall interaction of these entities and the effect of the interrelationships as shown graphically in the adjoining figure. We present the performance model of the supplier and retailer relationship to formulate the category management strategies and their implementation. This implementation is mostly reflected at the retail outlet, which is the point of sale as well as the point where consumer choices are manifested. At the retail outlet, the consumer – retailer relationship comes into the picture and the consumer is offered enhanced value through category management. We also propose a model to illustrate the entities and effects of Retailer-Consumer relationship which leads to consumer satisfaction. Consumer satisfaction, if achieved, props up category growth to fulfill the final objective 5. 1 SUPPLIER – RETAILER RELATIONSHIP Even though category management is primarily a retail strategy, the influence of manufacturers and suppliers cannot be negated. It is the manufacturers who have developed the expertise required to determine the efficient assortment, pricing, promotions, and placement of the various brands and sizes of each SKU for the category. Such expertise, coupled with proprietary consumer data, and syndicated market data, enables the manufacturers to pitch their ability to play the role of Category Captain. The concept of Category captain, extensively employed in US, is to implement category management. The Category Captain is a supplier who forms a strategic alliance with the retailer to enable the retailer to develop consumer insights, satisfy consumers and improve performance and profit across the entire category. He is, most often, also the leading manufacturer in the category and the essential task for him is to provide solutions to the retailer that is optimal for the whole category and not only for his own brands and SKUs. Once the retailer identifies the category captain, the retailer provides its proprietary sales information at the store level for the entire category. The category captain then develops the category plan and the strategies for the whole category, including the SKUs of its own, the store brand, as well as competitor brands. Such a plan might actually result in de-listing of many SKUs including some of the captain itself. In such a scenario, the relationship between the retailer and the category captain assumes much significance. The model presented here (Gruen et al. , 20000) illustrates the effects of components of such relationship on performance of the category. Effect of Supplier–Retailer relationship on category performance Where Pi are the postulates: P1: Greater brand management / sales conflict leads to greater supplier opportunism P2: Greater the pre – planning agreement, lesser is supplier opportunism P3: Greater the pre – planning agreement, greater is the plan objectivity P4: Greater the pre – planning agreement, greater is the retailer system trust P5: Greater the pre planning agreement, greater is its implementation P6: Greater the opportunism, lesser the category plan objectivity P7: Greater the objectivity, greater is system trust P8: Greater the system trust, greater is plan implementation P9: Greater the plan implementation, greater is the category performance P10: Greater the objectivity, greater the category performance The above model has a host of processes that comprise of the supplier–retailer category implementation model. Combined with the processes are the postulates that signify the inter-linkages between the processes. We hereby present a brief description of the processes and the postulates. The processes can be categorized in three segments: a) Drivers of category performance ) Antecedents of category performance c) Relationship parameters a) Drivers of category performance These are the factors that aid in enhancement of category performance, if properly implemented. (i) Objective category planning: The chief strength of category management is its reliance on data. The plan then must fully consider the available data and syndicated market area data. A category plan is considered objectiv e when it fairly considers the store and market –level data so that the interest of the consumer is fully accounted for. The incentive to maintain a minimum objectivity of category plans is that by using actual sales data and by incorporating knowledge of the consumer’s needs and wants, the plan should deliver the assortment, placement, and pricing of the SKUs in a manner that enhances the performance of the category. (ii) Category plan implementation: Implementation refers to the actual carrying out of the category plans on the retailers’ shelves. As a mediator between plan objectivity and category performance, the role of implementation is critical. b) Antecedents of category performance i) Brand management / Sales conflict: This is determined by the extent to which the firm’s brand managers place pressure on their own firm’s sales function during the category planning process to favor their firm’s brands. Such a conflict finds its genesis in the essential policy differences between brand management principles and category management principles. (ii) Opportunism: It is the degree to which the supplier firm places its interests above the joint interests above the joint interests of the relationship with the retailer. It also connotes the category captain taking undue competitive advantage of its position in the category. The tendency towards opportunism is best described by the Agency theory. c) Relationship parameters (i) Retailer’s â€Å"System Trust†: This can be defined as the willingness of the retailer to rely on the category captain’s policies. Such trust is essential to category plan implementation and lack of such trust retards category performance. (ii) Supplier / Retailer preplanning agreement: This process involves establishing common objectives, agreeing on the approach, and gaining buy-in from all parties involved in the category management process. (iii) Supplier / CBD team resource commitment: This is the final key factor. It can be considered to be the input of resources and personnel by the partners into the category management partnership. Thus we have seen how supplier – retailer relationship affects category performance. Now we proceed to explore the other relationship in category management, which is between retailer and consumer. 5. 2 RETAILER–CONSUMER RELATIONSHIP We hereby propose a model to signify the aspects of this relationship. Consumer satisfaction has been assigned the utmost importance as the determinant of category performance. We have divided the model into two basic segments, viz. Strategies for enhancing consumer satisfaction and Benefits of consumer satisfaction. While the former deals with the strategies that the retailer should adopt to generate enhanced consumer satisfaction, the latter deals with the impact of enhanced consumer satisfaction on retailer’s macro objectives. I. Strategies for enhancing consumer satisfaction The above model takes into account two broad strategies for enhancing consumer satisfaction. These are: a) Product centric strategies: The product centric strategies at the retailer level include the strategies regarding availability of an optimal product range. The two postulates proposed here are: (i) Product mix: An optimal product mix comprising of a broad product range, optimal price range and innovative and new products enhances consumer satisfaction (ii) Supplier management: An optimal assortment of suppliers in various categories, coupled with proper inventory management policies followed by retailer/supplier enhances consumer satisfaction b) Consumer centric strategies: The consumer centric strategies are those that are devised to positively affect consumer preferences for a particular category. The two postulates proposed in this category are: (i) POS management: The point of sale is the key to the process of consumer choice. We postulate that an effective POS management, comprising of creation of brand awareness at POS, Planogram management, merchandising, and POS promotion enhances consumer satisfaction by offering him more choices. (ii) Services offered: The effectiveness of services offered, including after sales services, trade promotional programs, and relationship marketing enhances consumer satisfaction. II. Benefits of consumer satisfaction Consumer satisfaction has been postulated as the key determinant of category performance. The two key areas that are affected positively by consumer satisfaction are presented by way of our hypotheses as: a) Category growth: We postulate that greater the magnitude of consumer satisfaction with a category, greater is the category growth. Greater category growth has a direct bearing on enhanced profits of the supplier. Hence consumer satisfaction leads to enhance supplier benefits. b) Enhanced retailer assets: We postulate that enhanced consumer satisfaction causes greater purchases from the retailer outlet and hence offers competitive advantage to the retailer. This leads to enhanced retailer assets. Thus enhanced consumer satisfaction leads to greater benefits for the retailer. We iterate that although the importance of retailer consumer relationship has been tried to be mapped in the model we have provided here, the hypotheses need to be validated through market research and consumer patterns. 6. CATEGORY MANAGEMENT SCENARIO IN USA Category management as a concept has been endorsed and applied in the US in a major way. In a recent industry study (Cannondale Associates) where the current practices in category management were assessed by over 250 retailers and manufacturers, including Wal-Mart, Winn-Dixie, Publix, Kelloggs, Kraft Foods, Quaker Oats and Tropicana, it was found that the findings could be grouped as per the lines of the following: â€Å"†¦To survive in todays consolidating environment, retailers and manufacturers need to improve their collaboration with trading partners using the newest technologies, be alert to evolving views of private label and trade promotion efficiencies, and incorporate frequent shopper data analyses. According to the study, both retailers and manufacturers attributed double-digit sales growth to category management. Efficient Assortment ranked as the category management skills component of most concern to those surveyed, while Category Definition/Role, Category Strategy, Shelf Management and Pricing ranked high as well. One of the major reasons for evolution of the whole concept of category management in US is the evolution of strong retailing industry and strengthening of the power the retail chains have over manufacturers. The retail chains have grown to become huge business enterprises in themselves. Thus there has been a shift away from the brand management concept of the manufacturers.

Business Essay Example | Topics and Well Written Essays - 500 words - 5

Business - Essay Example (Keegan & Moriarty, 1998) 3. GROWTH STAGE: It is a stage of Product Development in which the product starts selling and profits are higher as compared to the initial stage. Sales starts climbing quickly and the expenses are lower because the product has been catered in the minds of the target audience and everyone is familiar with the product. It is stage where company doesn’t do any type of marketing and promotion expenses and tries to cover all the expenses that has been done in the Introduction stage. (Kotler & Armstrong, 2001) 4. MATURITY STAGE: It is a PLC stage where the product sales slows and eventually becomes zero. It is a stage where the product is matured and the consumers want some new product to be catered to them. Companies apply certain strategies to their product to cater the changing needs of consumers and try to save their product from going in the decline stage. There are three strategies that managers apply in maturity stage: (Keegan & Moriarty, 1998) i. Modifying The Market: It is a strategy in which company tries to modify its target Market by catering to different types of consumers according to their needs. The company can also reposition their product to appeal to different segments of the market. (Keegan & Moriarty, 1998) ii. Modifying The Product: It is a strategy in which the company tries to modify its product by changing their characteristics such as features, quality, packaging or changing the style of a product. By doing this can attract consumers as they will see a different picture of that product. It can also improve product performance as well as reliability. (Keegan & Moriarty, 1998) iii. Modifying The Marketing Mix: It is a strategy in which company changes one or more elements of Marketing Mix such as price, the product packaging, the place of product and etc. It can also do new marketing techniques to appeal their target

Final report Essay Example | Topics and Well Written Essays - 1750 words

Final report - Essay Example Flinn Park has all the four categories of ecological goods and services as shown in the table below Being just thirty-six meters from the sea, Flinn Park has plenty of water. The water at Flinn Park has many uses. During the dry season, the Flinn Park caretakers use water to irrigate the park and keep it. The water at Flinn Park provides visitors with an excellent opportunity to swim in nature. I argue that it is more adventurous to swim in a park than in a confined swimming pool. In addition, both the locals and visitors at Flinn Park enjoy the beauty of the large water landmass of the sea nearby the park. Locals and visitors also enjoy drinking the natural water that is free from chemical contamination at the park. The nearby large water mass of the sea provides a cool breeze during the day. The breeze from the sea is warm at night, and it reduces the effects of the warm temperatures at night. Therefore, Flinn Park is a safe destination for tourists. Tourism boosts the local economy. Local industries around Flinn Park also use the water for industrial production. The large water mass of the sea close to Flinn Park creates a microclimate around the park. Because of the local climate created by the sea, local people at Flinn Park experience frequent showers that keep the vegetation at Flinn Park green throughout the year. Visitors also enjoy sporting events like boat riding with the water at Flinn Park. The water also provides the best sceneries for photo taking. Given the fact that Flinn Park is just thirty-six meters from the sea, it is not surprising that both locals and visitors enjoy the delicacy of seafood. Seafood has plenty of proteins, minerals, and vitamins. In addition, seafood has very low quantities of sodium and cholesterol. Seafood also boasts of low calories and an addition to many meals. Many experts in postnatal care recommend seafood as a

Contemporary Art Form Essay Example | Topics and Well Written Essays - 750 words

Contemporary Art Form - Essay Example The essay "Contemporary Art Form" discovers the form of contemporary art. Our society today affects each one of us in different ways, while we can’t tackle all the problems our worlds face head on; we may use our art to defuse one problem at a time in our own introspective personal way. Used as a solution, contemporary art gives an issue the identity of the artist. On a personal level I have always had an aversion to any form of racism. With education and the spread of knowledge many great minds once thought discriminatory behavior could be diminished to a small quantity, if not ceased completely. However, this was not the case, as even in the age of information our societies continue to evolve into new avenues for hate and prejudice, and this trend will seemingly continue. What I’ve realized over the course of time studying different people is that the underlying reason for such attitudes is people’s inability to listen to another and accept differences. People seem to have this innate need to fit their lives into a neat little box where everything is categorically arranged, and when they come across people who do have ideas different than their own, their box is disturbed and ergo begins a process of problems. For any artist who has chosen to make contemporary art his own, his work will always exist on a plane of freedom which conforms to nothing but his own perception of the world at large. It’s a simple thing to tell people to open their minds and open their hearts; this piece of advice is not practical.

Roles Of Human Resource Management

Roles Of Human Resource Management In the past few years, roles for HR professionals were viewed in terms of transition from operational to strategic; qualitative to quantitative; policing to partnering; short-term to long-term; administrative to consultative; functionally oriented to business oriented; internally focused to externally and customer-focused; reactive to proactive; activity-focused to solutions-focused (Ulrich, 1997). However, these transitions have been seen as too simplistic. In fact, the roles of HR professionals are multiple, not single. In order to create value and deliver results, HR professionals must not only focus on the activities or work of HR but also define the deliverables of the work. Therefore, Ulrich (1997) came out a multiple-role model for human resource management (See Figure 2-1). The two axes represent the HR professionals focus and activities. Focus ranges from long-term/strategic to short-term/operational. HR professionals must learn to be both strategic and operational, focusing on the long term and short term. Activities rang from managing process (HR tools and systems) to managing people. These two axes delineate four principal HR roles which are: (1) Management of strategic human resources; (2) Management of firm infrastructure; (3) Management of the employee contribution; and (4) management of transformation and change (Ulrich 1997). In a short word, the roles of HR professional are strategic partner; administrative expert; employee champion and change agent. Table 2-1 summarizes the deliverables, metaphor and activities the HR professional must perform to fulfill the role. Figure 2-1 HR Roles in Building a Competitive Organization Source: Ulrich, 1997 Table 2-1 Definition of HR roles Role/Cell Deliverable/Outcome Metaphor Activity Management of Strategic Human Resources Executing strategy Strategic Partner Aligning HR and business strategy: Organizational diagnosis Management of Firm Infrastructure Building an efficient infrastructure Administrative Expert Reengineering Organization Processes: Shared service Management of Employee Contribution Increasing employee commitment and capability Employee Champion Listening and responding to Employees: Providing resources to employees Management of Transformation and Change Creating a renewed organization Change Agent Managing transformation and change: Ensuring capacity for change Source: Ulrich, 1997 Management of Strategic Human Resources-Strategic Partner As Ulrich said, HR professionals pay a strategic role when they have the ability to translate business strategy into action (Ulrich, 1997). To achieve this, the HR manager must be able to ask appropriate questions and contribute to business decisions. As a result, the HR manager must develop business acumen, a customer orientation and an awareness of the competition to be able to link business strategy to HR polices and practices. However, research suggests that only a minority of CEOs involve their HR managers in formulating business strategy (Nankervis, 2000 and Johnson, 2000). Evidence indicate that there is growing awareness of the need for HR managers to become actively involved at the strategic level, and increasingly recognize that organizations that have a CEO who recognizes the significance of HRM have a competitive advantage (Fisher and Dowling, 1999; Way, 2000). Management of Firm Infrastructure-Administrative Expert According to Ulrich, to become administrative experts, HR professionals must be able to reengineer HR activities through the use of technology, rethinking and redesigning work processes and the continues improvement of all organizational processes; see HR as creating value; and measure HR results in terms of efficiency (cost) and effectiveness (quality) (Ulrich, 1997; Blackburn and Rosen, 1995). Research also indicates that the competency levels of HR managers in high-performing firms are significantly higher than those of HR managers in low-performing firms (Yeung, 1998) Management of Employee Contribution-Employee Champion Work as employee champion requires that the HR professional must be able to and meet the needs of employees. This can achieve by being the employees voice in management discussions, by being fair and principled, by assuring employees that their concerns are being heard and by helping employees to find new resources so that enable them to successfully perform their jobs (Ulrich, 1997). Failure to be an employee champion will see HRM facing a loss of trust for losing sight of the needs, aspirations and interests of the workforce (Kochan, 2003). Ignoring employee-related outcomes may result in lower jog satisfaction, lower commitment and reduced performance, which in turn, negatively affect organizational performance (Guest, 2002). Management of Transformation and Change-Change Agent Act as change agent can be achieved by learning change in the HR function and by developing problem-solving communication and influence skills. Gloet argues that one way for HRM to reinvent itself is via the development and maintenance of learning environments, where knowledge creation, sharing and dissemination are valued (Gloet, 2003). Ulrich, D. (1997) Human resource Champions: The nest agenda for adding value and delivering results, Harvard Business School Press, USA Nankervis, A. Small packages, HR monthly, November 2000, pp.42-3 Johnson, E.K. (2000), The practice of human resource management in New Zealand: Strategic and best practice?, Asia Pacific Journal of Human Resource, vol.38, no,2, 2000, pp.69-83. Fisher,C. and Dowling, P. (1999), Support for an HR approach in Australia: the perspective of senior HR managers, Asia Pacific Journal of Human Resource, vol.37, no.1,1999,pp.2-19. Way, N. (2000), A new world of people power, Business Review Weekly, 16 June 2000, pp. 62-6. Blackburn and Rosen, Does HRM walk the TQM talk?, HR Magazine, July 1995, pp. 68-72. Yeung, A, Human Resource Competencies in Hong Kong; Research Findings and Applications Guide, HKIHRM/University of Michigan Business School, Hong Kong, 1998, p.4. Ellig, B, HR must balance demands of dual roles, HR News, July, 1996, p.9. Allen, C. and Lovell, K., The effects of high performance work systems on employees in aged care, Labour and Industry, vol.13, no.3, 2003, p.14. Kochan, T., quoted in Trinca, H,HR needs to rebuild trust, Australian Financial Review, 11 November 2003, p. 59. Guesr, D, 2002, op. cit., p.335. Gloet, M, The changing role of the HRM function in the knowledge economy; the links to quality knowledge management, paper presented at the 8th International Conferece on ISO and TQM, Montreal, April 2003, pp. 1-7. 2.2 Human Resource Management overview in China Since the late 1970s, China has been going through a transition. The economic reform in China has led to impressive growth and significant integration into the global economy. These developments have resulted in major changes in the management of industrial enterprises and hold considerable implication for HR practices in the nation with the largest workforce in the world. In China, HR practices have been shaped by a host of ideological, historical, political and economic factors. Under the economic reform programmed, although some market forces have been introduced into the HR system, the influence of the state is still considerable (Nyaw, 1995:193). In 1979, China introduced the open door policy. Since then, economic reforms have brought many changes to the business environment. The end of the iron rice bowl policy has created a new employment market. SOEs have to compete with joint ventures and privately owned enterprises. With reforms in HR practices, managers in SOEs have more a utonomy including the authority to hire and fire. There are significant differences in HR practices between firms of different ownership. MNCs and joint ventures have brought into China not only investment but also management practices. For example, labour contracts have replaced lifetime employment. A performance-based pay system is gradually replacing the seniority pay system. These practices have an important influence on domestic firms in changing their HR practices (Warner, 2001) Benson and Zhu (1999) observed that there were three major models of HRM in Chinese enterprises. The first was a traditional model that existed in large SOEs where there was surplus labour. These SOEs had close ties with the government and contributed to local development. They had traditional HR management systems. The second model was observed in foreign-owned enterprises or newly established domestic private enterprises. They had fewer constraints than SOEs. They realized that their success based either on western or Japanese systems. The third model was observed in firms that were undergoing a transition from the old to the new systems of HR management. They adopted a HR management style with Chinese characteristics. Nyaw, M.K. (1995) Human resource management in the Peoples Republic of China, in Moore, L.F. and Jennings, P.D. (eds), Human Resource Management on the Pacific Rim, Walter de Gruyter, New York, 187-216. Warner, M. (2001), Human resource management in the Peoples Republic of China, in Budhwar, P.S. and Debrah, Y.A. (eds), Human Resource Management in Developing Countries, Routledge, London and New York, 19-33. Benson, J. and Zhu, Y. (1999), Markets, firms and workers: The transformation of human resource management in Chinese state-owned enterprises, Human resource management Journal, Vol.9., No.4, 58-74. 2.3 Human Resource Management Outcomes HRM is concerned with both organizational performance and employee wellbeing which means that any evaluation of HRs contribution must incorporate both organizations and employees perspectives. The contribution of HRM to the organizational performance included aligning HR strategies with organizational strategies, managing the corporate culture to win employee commitment and being efficient in managing HR activities. On the other hand, the contribution to individual wellbeing relate to employee attitudes and behavior. High-performance HRM benefits the organization because the way employees respond to HRM initiatives is linked to their job performance and ultimately to organizational performance (Guest, 2002). Therefore, when evaluate HRM performance, following outcomes should be considered: Adaptability: that means HRM strategies and policies foster organizational and employee flexibility. The whole organization and employee ready for change and accept change. After that, innovation and creativity encouraged, knowledge is recognized as a critical asset and the organization utilize people with different background and value systems. Commitment: this concern with HRM policies enhance employee identification with and attachment to their job and the organization. High level of commitment can result in more loyalty, increase teamwork and reduced labour turnover, along with a greater sense of employee self-worth, dignity, psychological involvement and feeling of being integral to the organization. Competence: Relates to the extent that HRM polices attract, retain, motivate and develop employees with the abilities, skills, knowledge and competencies to achieve the organizations strategic objectives. Congruence: concern with HRM polices generate or sustain congruence between management and employees, different employee groups, the organization and the community, employees and their families, and within the individual. In other words, HRM strategies and policies promote the achievement of employee goals, at the same time, satisfy the organizations strategies business objectives. Lack of congruence can be costly to the organization in terms of time, money and energy, resulting low levels of trust and lack of common purpose and stress or other psychological problems will happen (Beer, Spector, Lawrence, Mills and Walton, 1984) Cost-effectiveness: the HRM strategies and polices can reduce personnel-related costs, help correctly size the organization, eliminate unnecessary work, reduce compensation and benefit costs, reduce labour turnover and absenteeism, improve employee health and safety, improve employee productivity and avoid costs from litigation and negative public relations. Job satisfaction: HRM strategies and polices can produce employees have positive attitudes and feelings about their jobs. Common employee satisfaction components include pay, promotion opportunities, fringe benefits, supervision, colleagues, job conditions, the nature of the work, communication and job security (Spector, 2000). Rose (2002) suggested that employees frustrated and bored with repetitive and standardized work have low commitment. A satisfied employee tends to be absent less often, make positive contributions, stay with the organization and radiate positive feelings towards customers (McShane and Von Glinow, 2000). Justice: HR strategies, polices and practices are powerful communicators regarding managements trustworthiness, fairness and commitment to employees. If management is perceived favourably, employees reciprocate with increased commitment to the organization (Whitener, 2001). Motivation: HRM strategies and policies stimulate employees to achieve a designated goal. Highly motivated employees work hard, come to work early and contribute more to the organizations strategic objectives. Performance: HRM contribute to employee job performance and productivity and the organizations overall profitability, growth and success. Trust: HRM promote trust between employees, management and the organization. Under trust, employees are willing to share information, genuinely cooperate with one another and not take advantage of other. Stone, R (2005) Human Resource Mangement, 5th ed, John Wiley Sons, Australia. Beer, M, Spector, B, Lawrence, P. R, Mills, D.Q, and Walton, R. E, (1984), Managing Human Assets, The Free Press, New York, p.19. Rose, E, The labour process and union commitment within a banking services call center, Journal of Industrial Relations, vol.44, no.1, 2002, p.40. McShane, S. L. and Von Glinow, M. A, (2000), Organization Behavior, McGraw-Hill, Boston. Whitener, E. M., Do high commitment human resource practices affect employee commitment A cross level analysis using hierarchical linear modeling, Journal of Management, vol. 27, no. 5, 2001, p.515. 2.3.1 Employee Job Satisfaction As mention before, one of the outcomes of HRM is job satisfaction. However, what causes employee satisfaction? The researchers Judge and Bono (2001) found that one of the primary causes is the perception of the job itself. And also job itself is the most important situational effect on job satisfaction. Other research also show that of all the major job satisfaction areas, satisfaction with the nature of the work itself which includes job challenge, autonomy, variety and scope are best predicts overall job satisfaction (Fried and Ferris, 1987; Parisi and Weiner, 1999; Weiner, 2000). Some general statements about the facets that seem to contribute the most to feelings of job satisfaction for most North American workers include mentally challenging work, high pay, promotions and friendly or helpful colleagues (Locke, 1976). For more detail, Spector (1997) concluded that the causes of job satisfaction can be classified into two major categories. First, the job environment itself and fac tors associated with the job are important influences on job satisfaction. This includes how people are treated, the nature of job tasks, relations with other people in the workplace, and rewards. Second, there are individual factors that the person brings to the job. This includes both personality and prior experiences. Both categories work together to influence employee job satisfaction. In this study, we mainly focus on the environment antecedents of job satisfaction. Following factors are the environmental causes of job satisfaction: Job Characteristics and Job Characteristics Theory Many studies have advocated job design as a means of enhancing job satisfaction by making jobs more interesting (Herzberg, 1968; Herzberg, Mausner and Snyderman, 1959). The job characteristic theory is that people can be motived by the intrinsic satisfaction they find in doing tasks. When they find their work to be enjoyable and meaningful, people will like their jobs and will be motivated to perform their jobs well (Hackman and Oldhams, 1976). The characteristics model see figure 2-2. Figure 2-2 Hackman and Oldhams (1976) Job Characteristics Model Core Characteristics Critical Outcomes Psychological States Skill Variety Task Identity Task Significance Experienced Meaningfulness Autonomy Experienced Responsibility Feedback Knowledge of Results Work Motivation Job Performance Job Satisfaction Attendance Growth Need Strength Source: Hackman and Oldhams, 1976 Organizational Constrains Conditions of the job environment that interfere with employee job performance are called organizational constraints. The constraints come from many aspects of the job, including other people and the physical work environment. As the study of Peters and OConnor (1980), organizational constraints have been shown to relate to job satisfaction. Significant relations have been found between various measures of constraints and job satisfaction (Jex and Gudanowski, 1992; Keenan and Newton, 1984; OConor et al., 1984; Spector et al., 1988). OConnor, Peters, Rudolf and Pooyan (1982) reported correlations of organizational constraints with five job satisfaction facets which are coworker, pay, promotion, supervision and work itself. Work-Family Conflict Work-family conflict has been found to correlate significant with job satisfaction. Employees who experience high levels of conflict tend to report low levels of job satisfaction (Bedeian, Burke and Moffett, 1988; Holahan and Gilbert, 1979; Lewis and Cooper, 1987; Rice, Frone and McFarlin, 1992). Organizations can adopt policies that either help people cope with or reduce work-family conflict. Thomas and Ganster (1995) studied the impact of organization policies and supervisor behavior on employee experience of work-family conflict and job satisfaction. Their research provides evidence that organizational policies such as child care and flexible work schedules can reduce work-family conflict and enhance job satisfaction. Behavior by supervisors that supports employees with family responsibilities was also found to have positive effects. Pay The correlation between level of pay and job satisfaction tends to be surprisingly small. Spector (1985) found a mean correlation between level of pay and job satisfaction. However, although pay level is not an important issue, pay fairness can be very important. Rice, Phillips and McFarlin (1990) reported a moderately large correlation between pay level and job satisfaction in a sample of mental health professionals who all had the same job. Workload Workload has been found correlated with job dissatisfaction as well as other job strains (Jex and Beehr, 1991). Jamal (1990) found significant negative correlations of workload with job satisfaction, and Karasek, Gardell and Lindell (1987) found that workload was negatively associated with job satisfaction. Control Control has been found to correlate significantly with all three categories of job strains (Jex and Beehr, 1991). Spector (1986) showed the mean correlations across studies of relations between control and job satisfaction. Spector, P.E. (2000) Industrial and Organizational Psychology, 2nd ed, John Wiley Sons, New York, p.19. Poulin, J. E., and Walter, C. A. (1992) Retention Plans and Job Satisfaction of Gerontological Social Workers, Journal of Gerontological Social Work, 19, pp. 99-114. Porter, L. W. (1962), Job attitudes in management: I. Perceived deficiencies in need fulfillment as a function of job level. Journal of Applied Psychology, 46, 375-384. Wolf, M. G. (1970), Need gratification theory: A theoretical reformulation of job satisfaction/dissatisfaction and job motivation. Journal of Applied Psychology, 54, 87-94. 2.3.2 The Consequences of Job Satisfaction and Dissatisfaction There are many positive or negative outcomes that relate to job satisfaction or dissatisfaction. These include not only work variables such as job performance and turnover but also non-work variables such as health and life satisfaction. Job Performance In fact, a large body of research shows that the relationship between satisfaction and performance is positive but usually very low and often inconsistent (Iaffaldano and Muchinsky, 1985). Why is this correlation between job attitudes and job behavior so low? Intuition suggests that we might work harder to pay back the organization for a satisfying job. However, intuition also suggests that we might be so busy enjoying our satisfying job that we have little time to be productive. For example, satisfying coworkers and a pleasant superior might lead us to devote more time to social interactions than to work. These contradictory intuitions provoke suspicion that the satisfaction causes performance might be incorrect. Iaffaldano, M.T. and Muchinsky, P.M. (1985), Jo satisfaction and job performance: A meta-analysis. Psychological Bulletin, 97, 251-273. Organizational Citizenship Behavior Organizational citizenship behavior (OCB) is behavior by an employee intended to help coworkers or the organization that contributes to organizational effectiveness (Organ, 1988; Schnake, 1991). Schnake (1991) hypothesized that OCB is caused by good treatment from the supervisor and by job satisfaction. In fact, job satisfaction and OCB have been found to intercorrelate (Becker and Billings, 1993; Farh, Podsakoff and Organ, 1990) Withdrawal Behavior Many theories hypothesize that people who dislike their jobs will avoid them, either permanently by quitting or temporarily by being absent or coming in late. Absence is a phenomenon that can reduce organizational effectiveness and efficiency by increasing labour costs. On many jobs, floaters or substitutes are required for each absent employee. The employee might continue to get paid, resulting in increased costs to pay substitutes. Where absence rates among employees is high, the costs can be quite high. Not surprisingly, organizations are concerned about absence. Theories of absence hypothesize that job satisfaction plays a critical role in an employees decision to be absent (Steers and Rhodes, 1987). People who dislike their jobs should be expected to avoid coming to work. On the other hand, most theories of turnover view turnover as the result of employee job dissatisfaction (Bluedorn, 1982; Mobley, Griffeth, Hand and Meglino, 1979). People who dislike their jobs will try to fin d alternative employment. Studies have been consistently in showing a correlation between job satisfaction and turnover (Crampton and Wagner, 1994; Hulin, Roznowski and Hachiya, 1985). Furthermore, it seems certain that this correlation is causal job dissatisfaction leads to turnover. Models of turnover place job satisfaction in the center of a complex process that involves factors both inside and outside of the employing organization. Figure 2-2 is a simplified model that shows how this process might work. Characteristics of the individual combine with characteristics of the job environment in determining level of job satisfaction. If the job satisfaction level is sufficiently low, the person will develop a behavioral intention to quit the job. That intention may lead to job search activities, which if successful will lead to turnover. Alternate employment opportunities are important because a person is not likely to quit without another job offer. Figure 2-2 Model of Employee Turnover as a Function of Job Satisfaction and Unemployment Rate Organization Factors Person Factors Job Satisfaction Intent to quit Search Behavior Turnover Availability of Alternatives Source: Spector, 1997 Burnout Burnout is a distressed emotional/psychological state experienced on the job. Where job satisfaction is an attitudinal response, burnout is more of an emotional response to the job. Burnout theory proposes that a person who is in a state of burnout experiences symptoms of emotional exhaustion and low work motivation, not unlike depression. Burnout correlates significantly with job satisfaction in that dissatisfied employees are likely to report high levels of burnout (Bacharach, Bamberger and Conley, 1991; Shirom, 1989). Physical Health and Psychological Well-Being Concerns have been raised that both physical and psychological health might be influenced by job attitudes. Individuals who dislike their jobs could experience adverse health outcomes. These outcomes include both physical symptoms and psychological problems (Spector, 1997). It has also been suggested that job dissatisfaction results in a shortened lifespan (Palmore, 1969). Many studies have been shown a link between health and job satisfaction. For example, researchers have reported significant correlations between job satisfaction and physical or psychosomatic symptoms, such as headache and upset stomach (Begley and Czajka, 1993; Fox, Dwyer and Ganster, 1993; Lee, Ashford and Bobko, 1990; O Driscoll and Beehr, 1994). Job dissatisfaction has also been found to be associated with emotional stated of anxiety (Jex and Gudanowski, 1992; Spector et al., 1988) and depression (Bluen, Barling and Burns, 1990; Schauboeck et al., 1992). Counterproductive Behavior Counterproductive behavior includes aggression against coworkers, aggression against the employer, sabotage and left (Spector, 1997). These behaviors have many causes, but often, they are associated with dissatisfaction and frustration at work. Chen and Spector (1992) found that job satisfaction correlated significantly with employee reports of engaging in aggression against others, hostility toward others, sabotage, and theft at work. Keenan and Newton (1984) found a relation between experiencing feelings of hostility at work and job satisfaction as well. Dissatisfied employees are more likely than their satisfied counterparts to engage in all of these behaviors. Life Satisfaction The research suggests that feelings in one area of life affect feelings in other areas. A person who is satisfied on the job is likely to be satisfied with life in general (Weaver, 1987). Studies consistently find that job satisfaction and life satisfaction are moderately and positively correlated (Judge and Watanabe, 1993; Lance, Lautenschlager, Sloan and Varca, 1989; Schaubroeck et al., 1992; Weaver, 1987). 2.4 Employee Satisfaction and Organizational Performance Organizational performance is a multidimensional concept. As illustrated by the list of thirty criterion measures identified by Cambell (1997). Performance is measured in terms of output (inappropriately referred to as productivity in the table) and outcome, profit, internal process and procedures, organizational structures, employee attitudes, organizational responsiveness to the environment and so on. More recently, one approach to measure organizational performance has become popular. This approach attempts to capture some of the contradictory nature of organizational performance is termed the balanced scorecard (Kaplan and Norton, 1992, 1993, 1996). This aims to measure performance in terms of four sets of indicators, each taking a different perspective (Kaplan and Norton 1996:76): Financial: to succeed financially, how should we appear to our shareholders? Customer: to achieve our vision, how should we appear to our customers? Internal business process: to satisfy our shareholders and customers, what business processes must we excel at? Learning and growth: to achieve our vision, how will we sustain our ability to change and improve? Therefore, about the relationship between employee satisfaction and organizational performance, the service-profit chain concept supported that there are direct relationships between profitability, customer loyalty, and employee satisfaction, loyalty, and productivity (Heskett et al. 1994). Moreover, a study conducted by a national retailer found that a happy employee will stick with the company, give better service to the customer and recommend company products to others (Wall Street Journal July 22, 1998). Other study of the 100 Best Companies to Work For finds that the companies with the most satisfied employees had an above-average annual return to shareholders (Fortune December 1, 1998). A Gallup study finds positive correlation between employee satisfaction and financial performance (Economist August 8, 1998). What is more, there are many studies about different industries also approved that the employee satisfaction correlated with organizational performance. Such as Kaplan an d Norton (1996) has found significant correlation between employee morale and customer satisfaction in an oil company. A survey of hospital employees finds significant correlations between nursing-staff satisfaction scores and patient loyalty (Atkins, Marshall and Javalgi 1996). Another correlational study using data collected for 298 public schools finds support for the link between satisfaction levels of teachers and school performance (Ostroff 1992). Thus, according to the previous literature, employs satisfaction is correlated to customer loyalty, financial performance, which in turn, affects the organizational performance.

Impact of transformational leadership on organizational learning Essay

Organizational Learning (OL) Literature reveals that OL improves the development by introducing new expertise, output or commercialism. Nonaka & Takuchi (1995) argued that learning is vital for product innovation which means that it is not limited to only acquisition and retention of knowledge but it is used to get the required outcomes. Knowledge oriented view of the organizations argue that knowledge and learning capacity influence the organizational performance and also direct the firm to achieve sustainable and continuous competitive advantage (Zhang, 2008). In last thirty years extensive research have been conducted on the OL and it has contributed a lot in the organizational development and change management, but still there is a little agreement on what is meant by the term OL and its nature. (Crossan, Lane & White, R.E, 1999; Huber, 1999 and Kim, 1993). The reason for this problem is that the OL has been studied by many disciplines and perspectives (Lopez, et al, 2006). According to (Argyris, 1995),† Learning occurs whenever errors are detected and corrected or when a match between intentions and consequences is produced for the first time.† (p.20). According to Huber (1991), when knowledge is acquired, information is spread, correctly analyzed, and recalled, organization learning eventually takes place. He further assumed that learning occurs in the organization if any of its unit acquires information useful to the organization. This is also supported by DeNisi & Griffin (2008) that â€Å"OL is the process by which the organization â€Å"learns† from past mistakes and adapts to its environment.† From these definitions, it is concluded that OL is a process whereby organization gets knowledge and removes the problem and adapts ... ...pply knowledge, then OL will be damaged, so organizations should have such compensation systems that motivate the employee to get, share, and apply knowledge in the organization (Wong, 2005). The findings of the study conducted by Dechawatanapaisal (2005) demonstrated that the pay for performance and recognition are the contributing factors in the organizational learning. Especially recognition that is easy to implement and does not require large investment, can increase the employee morale that support their learning. Khandekar & Sharma (2006) pointed out that improved reward system plays an important role in strengthening the learning capabilities of the organization which leads us to propose that the selective compensation and reward system that create a powerful motive for the employees to get, apply and share knowledge has a positive impact on OL.