Eco-Insulate UK is a medium sized private sector organisation that manufactures eco-friendly thermal insulation in the UK

5HR03 Reward for Performance and Contribution

5HR03 Reward for performance and contribution

Learner Assessment Brief

Assessment ID / CIPD_5HR03_24_01

Level 5 Associate Diploma in

People Management

This unit focuses on how internal and external business factors influence reward strategies and policies, the financial drivers of the organisation and the impact of reward costs and rewarding performances.

CIPD’s insight

Strategic reward and total reward (February 2024)

`Strategic reward` takes a long-term approach to how an organisation’s reward policies and practices balance and support the needs of both the organisation and its employees. The concept of `total reward` covers the tangible and intangible aspects of work that people value and may form part of a reward strategy.

https://www.cipd.co.uk/knowledge/strategy/reward/strategic-total-factsheet

Performance management

Performance management is about creating a culture which encourages the continuous

improvement of individuals` skills, behaviours and contributions to the organisation. It’s a key part of the relationship between staff and managers. Views on how it should be carried out to the benefit of employees and the business have changed in recent years. Here you’ll find resources on managing performance, appraisal and reviews, feedback and using competency frameworks.

https://www.cipd.co.uk/knowledge/fundamentals/people/performance

Making reward more accessible and performance management fairer (January 2022)

Making reward more accessible and performance management fairer

How can technology be used to allow better access to pay and a fairer assessment of employee performance and potential?

https://www.cipd.co.uk/knowledge/work/technology/digital-transformation-insights/reward- performance-management

Please note that the purpose of this insight is to link you to CIPD’s research and evidence within the subject area, so that you can engage with the latest thinking. It is not provided to replace the study required as part of the learning or as formative assessment material.

Scenario

Eco-Insulate UK is a medium sized private sector organisation that manufactures eco-friendly thermal insulation in the UK. The Managing Director (MD), who started the company in the mid- 1970s has set up a meeting with you to discuss concerns regarding increased turnover of skilled and non-skilled employees.

During the meeting you are made aware that there is no incentive scheme in operation and there is an expected level of performance broadly related to the notion of measured day work. Standard times exist and are maintained by the Finance and Administration Department.

Most employees receive 28 days paid holidays per year. All employees are included in the non- contributory pension scheme however, it’s generally known that special schemes operate for senior staff only.

The MD is aware that the overall culture and performance of the company is quite negative and that it’s time to look at offering forms of reward incentives, benefits and recognition to stimulate positive change.

In your capacity as a reward specialist practitioner, he asks you to put together a report for the senior management team that will give them knowledge and understanding of the principles and components of reward and pay, including how these might influence organisational, psychological and cultural factors. In addition, he would also like them to gain an understanding of job evaluation and market rates.

Report

To complete the report, you should include written responses to each of the 10 points below, making appropriate use of academic literature, legislation, surveys, data intelligence, research and good practical examples to substantiate your response and illustrate key points. Please ensure that you use reputable sources as indicated on the unit reading list and that all cited sources are correctly acknowledged and presented in full in a bibliography at the end of your report.

With reference to the above scenario:

1) Explain the principles of reward and its importance to organisational culture and performance management. (AC 1.1)

2) Assess the contribution of extrinsic and intrinsic rewards to improving employee contribution and sustained organisational performance. (AC 1.2)

3) Explain the differences between types of grade and pay structures. (AC 2.1)

4) Explain how contingent rewards can impact individual, team and organisational performance. (AC 2.2)

5) Explain the merits of different types of benefits offered by organisations. (AC 2.3)

6) Explain the merits of different types of recognition schemes offered by organisations. (AC 2.4)

7) Assess the business context of the reward environment. (AC 3.1)

8) Evaluate the most appropriate ways in which benchmarking data can be gathered and measured to develop insight. (AC 3.2)

9) Explain approaches to job evaluation. (AC 3.3)

10) Explain the legislative requirements that impact reward practice. (AC 3.4)

Assessment Criteria Evidence Checklist

You may find the following checklist helpful to make sure that you have included the required evidence to meet the task. This is not a mandatory requirement as long as it is clear in your submission where the assessment criteria have been met.

Task 1 – Report Section One Assessment criteria		Evidenced Y/N	Evidence reference
1.1	Explain the principles of reward and its importance to organisational culture and performance management.
1.2	Assess the contribution of extrinsic and intrinsic rewards to improving employee contribution and sustained organisational performance.
2.1	Explain differences between types of grade and pay structures.
2.2	Explain how contingent rewards can impact individual, team and organisational performance.
2.3	Explain the merits of different types of benefits offered by organisations.
2.4	Explain the merits of different types of recognition schemes offered by organisations.
3.1	Assess the business context of the reward environment.
3.2	Evaluate the most appropriate ways in which benchmarking data can be gathered and measured to develop insight.
3.3	Explain approaches to job evaluation.
3.4	Explain the legislative requirements that impact reward practice

Assessment Criteria marking descriptors.

Assessors will mark in line with the following assessment criteria (AC) marking descriptors, and will indicate where the learner sits within the marking band range for each AC.

Assessors must provide a mark from 1 to 4 for each assessment criteria within the unit. Assessors should use the mark descriptor grid as guidance so they can provide comprehensive feedback that is developmental for learners. Please be aware that not all the mark descriptors will be present in every assessment criterion, so assessors must use their discretion in making grading decisions.

The grid below shows the range for each unit assessment result based on total number of marks awarded across all assessment criteria.

To pass the unit assessment learners must achieve a 2 (Low Pass) or above for each of the assessment criteria.

The overall result achieved will dictate the outcome the learner receives for the unit, provided NONE of the assessment criteria have been failed or referred.

Please note that learners will receive a Pass or Fail result from the CIPD at unit level. Referral grades can be used internally by the centre.

Overall mark	Unit result
0 to 19	Fail
20 to 25	Low Pass
26 to 32	Pass
33 to 40	High Pass

Marking Descriptors

Mark	Range	Descriptor
1	Fail	The response DOES NOT demonstrate sufficient knowledge, understanding or skill (as appropriate) to meet the AC. Insufficient examples included where required to support answer. Insufficient or no evidence of the use of wider reading to help inform answer. Presentation or structure of response is not appropriate and does not meet the requirement of the question/assessment brief.
2	Low Pass	The response demonstrates an acceptable level of knowledge, understanding or skill (as appropriate) to meet the AC. Sufficient acceptable examples included where required to support answer. Sufficient evidence of appropriate wider reading to help inform answer. Satisfactory in-text referencing. Answer is acceptable but could be clearer in responding to the question/task and presented in a more coherent way. Required format adopted but some improvement required to the structure and presentation of the response.
3	Pass	The response demonstrates a good level of knowledge, understanding or skill (as appropriate) to meet the AC. Includes confident use of examples, where required to support the answer. Good evidence of appropriate wider reading to help inform answer. A good standard of in-text referencing. Answer responds clearly to the question/task and is well expressed. Presentation and structure of response is appropriate for the question/task.
4	High Pass	The response demonstrates a wide and confident level of knowledge, understanding or skill (as appropriate) to meet the AC. Includes strong examples that illustrate the points being made and support the answer. Considerable evidence of appropriate wider reading to inform answer. An excellent standard of in-text referencing. Answer responds clearly to the question/task and is particularly well expressed or argued. Presentation and structure of response is clear, coherent, and responds directly to the requirements of the question/task.

Sample Answer - Plagiarised

AC1.1 Explain the principles of reward and its importance to organisational culture and performance management

Report on Reward Principles and Their Impact on Organisational Culture and Performance Management

Introduction

This report outlines the principles of reward and their significance to organisational culture and performance management in the context of Eco-Insulate UK. It also addresses the need to integrate job evaluation and market rate considerations to develop a holistic reward strategy that can mitigate staff turnover and foster a positive working environment.

Principles of Reward

Reward encompasses the financial and non-financial benefits provided to employees in exchange for their contribution to the organisation. The principles of reward can be categorised into three main areas:

Equity and Fairness
- Employees expect to be rewarded fairly relative to their effort, skills, and market value. Equity ensures internal fairness (how roles within the organisation are valued) and external competitiveness (alignment with industry standards).
- A lack of equity can erode trust and motivation, contributing to turnover.
Transparency
- Clearly communicating how rewards are determined promotes trust and engagement. Employees are more likely to feel valued when the rationale behind rewards is open and consistent.
- Transparency in Eco-Insulate UK can address employee dissatisfaction with perceived preferential treatment for senior staff.
Alignment with Organisational Objectives
- Rewards should support the organisation’s strategic goals by encouraging behaviours that drive performance. Linking rewards to clear objectives enhances organisational alignment and fosters productivity.
- This principle is vital for Eco-Insulate UK to improve its overall performance culture.

Importance of Reward to Organisational Culture

Organisational culture is shaped by shared values, beliefs, and practices. A well-structured reward system significantly influences culture in the following ways:

Motivating Performance
- Recognising and rewarding employees for achieving specific goals reinforces a performance-driven culture.
- Introducing incentives can energise the workforce and create a more positive environment at Eco-Insulate UK.
Enhancing Retention
- Competitive and equitable rewards contribute to employee loyalty, reducing turnover.
- Addressing the lack of incentives and perceived inequality in benefits at Eco-Insulate UK can help retain skilled workers.
Fostering Inclusion and Engagement
- Inclusive reward practices—such as extending non-contributory pension benefits uniformly—promote a sense of belonging and engagement.