The previous chapter examined the range of reward plans associated with the recognition and reward of individual behaviour and/or results. This chapter focuses on plans where reward outcomes are contingent on measures of collective results; that is, on collective incentive plans. Because such plans are generally geared to measures of group results over a relatively brief time frame – typically monthly, quarterly or annually – they are also known as collective or group short-term incentive plans, or ‘STIs’.

We begin our exploration of collective STIs by outlining the general rationale for such plans and by overviewing the four main plan types: profit-sharing, gainsharing, goal-sharing and team incentives. Subsequent sections explore each of these four plan types in more detail, noting the advantages and disadvantages of each. Consistent with the approach taken in earlier chapters, a final section considers the strategic priorities to which each plan type would be most and least appropriate.

Identifies the emergence, growth, development and failure of the supplier sector in Australia, including much of it being taken over by the global giants of the sector. Responsible, as elsewhere, for 80 per cent of the content and value of the complete car, it was never able to achieve enough local scale and was perpetually threatened by competition from imports.

Chapter 1 introduced the basic ‘tools’ of performance and reward management, including key aspects of purpose and practice. In this chapter we introduce two overarching concepts of alignment that recur throughout this book: ‘strategic alignment’ and ‘psychological engagement’. The design, implementation and maintenance of effective performance and reward management systems requires simultaneous, systematic and constant attention to both of these dimensions of alignment.

‘Strategic alignment’ refers to the plans, processes and actions involved in establishing and maintaining an alignment between an organisation’s overarching purpose or intent and how it manages employee performance and reward, as well as all other aspects of people management.

In chapter 2, we focused on managing for results, especially through measuring performance outputs. In this chapter, we examine the assessment processes and techniques associated with the management of work behaviour and related outcomes. As a consequence, we will highlight the strengths, weaknesses and criticisms of these assessment methods. Subsequently, we also examine the situations in which each may be the most and least appropriate. In assessing the management of work behaviours, we consider sources of performance appraisal information, methods and some common flaws. Examined in a systems perspective, we discuss both a behaviour (i.e. process) and competency (i.e. input) approach to the appraisal of individual performance as they relate to desired work behaviour and results. While measuring individual performance 95is often considered a traditional and well understood human resource management practice, an important consideration to keep in mind throughout this chapter is: exactly how do measuring work behaviours and individual competencies shape subsequent behaviour?

In this chapter, we examine employee share ownership (ESO) as an example of a collective long-term incentive. An employee share plan is any type of plan that allows some or all employees to acquire shares in the organisation that employs them (Klein 1987). We begin with an overview of the nature and extent of employee share ownership in Western countries. We investigate the theoretical rationale for employee share ownership before examining the empirical research on impact of share plans on organisational performance and employee attitudes and behaviours. Finally, we consider the relationship between employee share ownership and other HR practices, with a particular focus on other forms of performance-related pay.

Discusses the influence of national governments and their long-standing role in regulating the industry, the conflicts that have arisen around safety and environmental protection. Also addresses the role of the industry in national economies, how governments have encouraged the development of national automotive sectors, the means they used to do so and the consequences for the industry. Describes the roles that different countries have been able to play within this global industry.

Tells the development of the vehicle manufacturers in Australia, focusing on their critical relationships with their parent groups. It describes the role each of the ultimate four survivors was allowed to play within these groups, and the consequences for their attempts to build volume and scale through exports.

Building an entire industry more or less from scratch, creating products that were popular and loved for a long time, and keeping all of this going for seventy years was quite an achievement. But, like everything else, it followed a life cycle: was born, matured, aged, declined and finally died. Three score years and ten sounds in a way normal. Could it have gone on longer, perhaps as long as the wider automotive industry itself? In Chapter 7, we concluded that the alternative tracks proposed towards or after the end were dead ends. But there might have been better alternatives, had they been pursued earlier.

Describes the critical and growing role of the supplier sector, its own march to globalization and interrelated sets of global oligarchies, the closed nature of the supply chains, and their highly disciplined functioning, under the leadership and tight control of the vehicle manufacturers.

The story of the Australian light vehicle industry from the very first developments before World War I, through the era of importing vehicles, the imposition of import controls, the decision to create a fully fledged automotive industry, its growth, decline and end, as it lost control of its domestic market and never achieved sufficient export volumes in compensation. The principal reason for its demise is identified as lack of sufficient scale, compared to the global giants, rather than external factors such as labour costs. The impact of its going on the balance of trade and employment is identified as relatively modest. Some unrealistic proposals for reviving it are dismissed.

A remuneration system typically comprises three main elements: base pay, benefits and performance-related pay. In designing any remuneration system careful attention should be paid to three key considerations: first, the relative role that each of these three components will play in total remuneration; second, the practices that will be drawn on to configure each component; and third, the target level of total remuneration for each position. Any discussion of remuneration practice must consider what, for most employees, is the primary component of their total remuneration, namely base pay.

This is a book about two of the core activities integral in the field of human resource management: managing employee performance and managing how employees are rewarded. As we shall see throughout the book, there is a close and complex inter-dependence between these two activities; so much so that it makes little sense to consider them in isolation from each other. Equally, while the book’s central concerns are with performance and reward practices and processes, attention is also paid throughout to recognising and analysing the interconnectedness of these and other aspects of human resource management. Performance management systems provide inputs into other HR functions such as training and employee development, as well as evaluating HR decisions such as recruitment and selection.

The concept of ‘total reward management’, which was canvassed in chapter 1, acknowledges the growing importance of benefit plans in strategic reward practice, particularly in attracting and retaining high capability employees with specific demographic characteristics, such as women professionals, experienced older workers of both sexes, and younger workers, such as ‘Millennials’ (born between 1985 and 2000) and ‘Generation Z’ (those born since 2000).

Whereas benefits were once the least glamorous of all aspects of reward management – and were literally referred to as ‘fringe’ reward practices – many organisations now consider them to be an important means of gaining a competitive advantage in labour markets where key ‘talent’ is in short supply. As the workforce becomes more diverse and as the level of employee education and reward expectation rises, financial and non-financial benefits are assuming an increasingly critical role in the reward management system’s ability to attract, retain and motivate high-potential and high-performing employees.

Describes the development of the automobile as a product, from the first simple horseless carriages to today’s highly sophisticated vehicles with a large dose of electronic controls – and how, in its present form, it is threatened by environmental pressures and the development of new technologies. We present the spectacular growth of demand, the saturation of developed country markets, the emergence of China, and the persistence of regional particularities.