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Introduction Applied Performance Practices Business Essay

Paper Type: Free Essay Subject: Business
Wordcount: 3889 words Published: 1st Jan 2015

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Financial Rewards is the most fundamental applied performance practice in organizational settings. Pay has multiple meanings, such as symbol of success, reinforcer and motivator, reflection of performance, reduce anxiety and so on. The meaning of money also varied.

There are four types of rewards in the workplace:

Membership and Seniority Based Rewards

-Represent the largest part of most pay checks and fixed wages, seniority increases.

Job Status-Based Rewards

-Include job evaluation and status perks.

Competency-Based Rewards

-Pay increases with competencies acquired and demonstrated.

Performance-Based Rewards

-An overview of some of the most popular individual, team, and organizational performance based rewards.

Besides that, company will have their own way to increase the job effectiveness and improving the company performances. Below are the type of way:

Job Design- The process of assigning tasks to a job, including the interdependency of those tasks with other jobs.

Job Specialization – The result of division of labor in which work is subdivided into separate jobs assigned to different people.

Job Rotation- The practice of moving employees from one job to another.

Background of the Coca-Cola Company

Soft drinks are getting popular nowadays. There are so many soft drinks company around the world. One of the most popular beverage company is Coca-Cola Company. The Coca-Cola Company, produces a variety of soft drinks and consumer products. Coca-Cola was founded in May 1886 by Dr. John S. Pemberton in Atlanta, Georgia, a pharmacist. There was a time when Pemberton actually trying to concoct a headache remedy, but once he mixed his special syrup with carbonated water, a brand new taste drink is created. He let some of his customers tasted the result, and they praised for the awesomeness of the drink. He realized that he has successfully created something new and it is the popular soda fountain beverage.

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The name of Coca-Cola was coined by his bookkeeper, Frank Robinson. Later on, a businessman, Asa Griggs Candler has purchased it and introduced it as a “carbonated soft drink” in the market. Then Coca-Cola dominated the market of carbonated soft drinks throughout the 20 century. Coca-Cola has also became one of the global market leaders in the beverage industry. The branch of Coca-Cola has spread all over the world, such as North America, Eurasia, Africa, Europe, Latin America, and Pacific.

There are approximate more than 500 non-alcoholic beverage brands owned or licensed by the Coca-Cola company, mainly sparkling beverages but also a variety of still beverages, such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. Being the world’s largest beverage distribution system, there are more than 200 consumers enjoy their beverages at a rate of more than 1.8 billion servings a day. Coca-Cola also rank among the world’s top 10 private employees with more than 700,000 system employees. The Company competes with PepsiCo, Inc., Nestle, Dr Pepper Snapple Group, Inc., Groupe Danone, Kraft Foods Inc. and Unilever.

Mission & Vision

There are many challenges faced by the company. Competitors are making brand new strategies to defeat the company. Therefore, the company need to clear and understand the direction of the business in the market and predict the future. Their vision for next ten years is about to create a long term destination program for their business which will also provide them a “Roadmap” for winning from their bottling competitors.


“Our Roadmap starts with our mission, which is enduring. It declares our purpose as a company and serves as the standard against which we weigh our actions and decisions.

To refresh the world…

To inspire moments of optimism and happiness…

To create value and make a difference.”


“Our vision serves as the framework for our Roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable, quality growth.

People: Be a great place to work where people are inspired to be the best they can be.

Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people’s desires and needs.

Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value.

Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities.

Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities.

Productivity: Be a highly effective, lean and fast-moving organization.”

Content Part

Theory and Concept

Coca-Cola Company relies on prudent systems, offers employee jobs with high motivation potential, expects staff to manage themselves, and delegates power to branches, resulting in high levels of employee empowerment and performance.

The most common elements of reward using by Coca-Cola Company are based on long term incentives reward, annual incentives reward and base salary reward. All the rewards given to the employees based on membership and seniority -based rewards, competency-based rewards and Job status based-rewards.

All middle and senior management, excluding our executive team, participate in the CocaCola Hellenic Long- Term Incentive Plan. Starting from the 2011-2013 Long-Term Incentive Plan, they operate under a new format aimed at linking employee performance to short- and long-business priorities and rewarding employees accordingly. Incentive payouts are based on business performance against three-year objectives which are set on an annual basis. Exceptional business performance may result in awards in excess of individual target payouts. The performance of the plan will be measured against selected KPI performance over a three-year period; that KPI s includes volume market share, net sales revenue per unit case and Group ROIC. The target payout for the plan is determined for each individual based on their performance, potential and level of responsibility and the plan payout takes places at the third anniversary of the plan. Coca-Cola Company awards the employees by using performance-based rewards. The employees will receive their reward based on their performance.

Besides, Coca-Cola Company also using types of reward like annual incentive reward. The reward will be given to the employees based on the Job-status-based reward. While their goal is long-term sustainable growth, the Compensation Committee chooses annual incentives to pay to reward Named Executive Officers for individual performance and operational results for an operating group and/or overall Company performance on an annual basis. The annual objectives are carefully chosen to ensure integration and alignment with our overall long-term objectives. At the start of the incentive period, Compensation Committee designs the target amount, based on a percentage of base salary.

Total benefits package is highly regarded and is designed to meet employees’ basic and life-changing benefits needs. As market dynamics evolve, the Company regularly assesses our benefits programs to ensure employees receive those benefits they value and are provided with diverse options that address the issues of individuals and families and promote healthy lifestyles.

As to fetch information on the part of employees’ problems, Cola-Cola Company makes close collaborative or communication system with them to satisfy them all to increases their efficiency and effectiveness. Because need and wants of employees are changing day by day to satisfy meaningful needs and wants are very important in the behalf of organization so as to use best potential of both physical and mental competencies is very important. That’s why defining criteria of rewarding them have a significant importance for the mutual benefits of both employees and organization. Rewards have greater importance and effectiveness in Pakistani cultures, because people have more demand of them.

What do you think is the most important emerging issue in the design of work?

Diversity and limitlessness are the factors that stand out in the case study about the Coca-Cola Company.   With Coca-Cola being a worldwide company that offers such an array of products, they must hire flexible and diverse employees to support the needs of the still-growing company.   The employees’ reviews reaffirmed that by hiring a diverse group of employees and task them with different challenges in different countries; their choice to staff the company in this way has been successful.   By working with other unique individuals, they are enlightened by new methods of thinking and working. 

The work specialization of Coca-Cola Company is high, as each Manager is made responsible for only a particular function, which is his expertise. There is no boredom or monotony as each salesman is meeting the different sort of person and the work is challenging and promotions are based on performance there is no monotony and boredom.

Real Life Example

The Coca-Cola Company rewards programs are regularly benchmarked against a select peer group of the major competitors and key players in the local market. The rewards management teams are based on the rewards programs that set by the company to give rewards. There are many ways to rewards the employees and one of the rewards ways that the company rewards the employees is based on the performance-based rewards. First the Coca Cola’s management team prefers grade for defining pay. Before there prepare the performance reward level there will do the research by conducting survey for the top five companies. There will conduct minimum three year rewards ranges of those top five companies and take average of them. Then there will decide their performance rewards system according to their management grades. The each year inflation rate has to be included no matter the employee’s individual performance increase or not. The Coca Cola human resource management also looking forward to performance ratings has mentioned. It will help the team to define a system in an organization systematic from to remove biases and ambiguity.

Besides that the examples of the company use the competency-based rewards. The Coca Cola Company is a beverage industry which is focus more on the product with high quality, sell more and also get more customer satisfaction. So the management team creates more opportunities for the sales people to sell more and get more. By generating high work performance and make more profits, the company are able to utilize full potential of sales people. Because of that rewards system, the sales people have more opportunities to get rewards of both intrinsic and extrinsic ones. The table below is the example of the competency based rewards.

Ares under consideration





Performance to organization goals





Performance of workers A achieve





Performance of workers B achieve




Good Acceptance

Thus, the Coca Cola Company also have use the job status based rewards. There are many country Coca Cola Company is providing such rewards likes Great Britain, Luxembourg, Netherlands and Belgium. Those country’s company are depending on the job and grade the employees could be offered a company car, mobile phone, laptop, private health insurance, financial planning or free internet at home. Besides those countries, Norway and Sweden are offering the company car with free fuel. Furthermore, different job status of employees can choose different type of rewards, perks or benefits.

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Beside the reward, The Coca Cola Company also has a different way of conducting business than most companies. There has used the job design for the work or job management. There start with looking for “secret ingredients” that potential employees may have that will help grow the recipe for success for the individual and the company. At the each level and location, The Coca Cola Company will use the best combination of diverse individuals to fill the different positions in a way that benefits the team at the location. The main objective there focus which is on diversity of their employees as well as their products and markets can continues being successful. By using the diversity, it has great success as one of the main criteria for employee searches. Besides that, there also don’t limit their employee’s position in the company in order to allow them to grow within the organization as well as personally, which allows them to take the job as far as they want it to go. The Coca Cola Company also will think about or consider the idea and suggestions from all level, again can using their diversity to improve the company and also the individual. The mutual respect and appreciation within the workplace nurtures the individuals so that there grow within the company and that in turn reduces turnover, boosted employee morale, productivity, teams work and company loyalty. Lastly, because of that, the Coca Cola Company is still growing more every year.

Disadvantages of Coca-Cola Company rewards system

We all know the concept of ‘nothing is perfect’ and same goes to Coca-Cola Company. It sounds so sweet on what rewards Coca-Cola Company has given to the employees, but there is a lot of weaknesses hidden and left unseen.

First and for most, Coca-Cola Company rewards the employees based on their performance. However, using the performance based reward may only reward those who apparently contributed to company and neglected the others employees that contributed silently. This may pop-up the feeling of jealousy among the employees. The discrimination or dissatisfaction among employees may affects their morale and company’s reputation.

Besides, performance based reward system may bring out the problem that the employees will have focusing on individual rewards and abandoned the teamwork. Competition can be good but if it’s too aggressive it can be detrimental. The employees may lose sight of their customers’ needs and allow service or satisfaction to suffer in lieu of achieving good performance. Unity is strength, there are works that couldn’t be done individually. Therefore, performance based reward should paying attention on team reward but not individual reward.

Due to the reason of human’s judgment might be bias, a system is necessary to evaluate the employees’ job performance. The KPI is one of the system generally used by the company. However, there are some disadvantages when measure the employees’ performance based on KPI. KPI couldn’t measure long term performance of the employees. As if the appraisal is only measure the recent performance, hence it is not conducted fairly. It may cause animosity in the office. In addition, KPI only focus on the outcome and it lose the creativity from the employees. This may discourage employees from experimenting with innovative solutions that might produce a better result. Moreover, the employees’ loyalty couldn’t be measured. Employees’ loyalty represented how much can he scarified for the company which is also a main point to lead company to success.

Aside from that, the annual or monthly incentives given by the company shouldn’t be equal to everyone, because it might demotivated the employees from working hard. They might have a thought that nor matter they did anything right or wrong they will still rewarded the same by the company. Giving different base rewards may motivate the employees from working harder.

Coca-Cola Company rewarding their customers based on monthly too. A company giving rewards too often might leads to huge expectation of employees. The employees may expect to receive same value of rewards in future, then any potential motivation of reward will be lost. The gift will act as a regular compensation but not an additional bonus for motivation. When a bigger pay-out doesn’t happen, employees can become disgruntled, which can hinder work performance or, in a worst-case scenario, leave the company. Therefore, there must be a good balance of incentives for these admin/support staff or else they will not feel appreciated.

Last but not least, Coca-Cola Company should have paying greater reward to those who hardworking and overtime always. Some of the employees are dissatisfied on the pay of overtime since the half hour of working is not counted. It shows that Coca-Cola Company is not treating fair to their employees.

While talking about job specialization, one of the key disadvantages of specialization is that jobs often become monotonous. Employees do not like to focus on one specific job because it may increase employees’ boredom and they will become tedious, empty and unsatisfying. With specialization, people rarely meet the final product and are merely selling their labor for a price as if it were a commodity. Their job satisfaction decreases and the quality of job performance will fall. At the same time, it may cause unemployment. This happen when there is no similar job offered if you are fired. Also it limit the freedom of the choice of work. Lesser flexibility; in the absence of a worker, it is hard to shift workload to any of the available workers because they do not have variety of skills. Greater chances of workers getting local muscular fatigue because the same muscles are used in doing the task.

As job rotation promote employees to perform different task, if they discover it as a weakness, the task would not be performed well as those is specialize is stronger at it. Another disadvantage is that staff could be rotated away from a task that they enjoy, or perform very well to a high standard which could lead to other staff members not performing the same tasks as well.

Furthermore, a huge amount of money is needed to train the employees, to make sure the employees able to handle the task given through job rotation strategy. When the employees are moving around into multiple positions, you must invest time and money into training the workers in all those positions. Not only cost, but also the time of the managers and others who must train the employees in each area.


For the performance-based reward use by the Coca-Cola company, our team share the same thoughts that performance-based reward does not fully motivate employees to enhance their best performance practices, which doesn’t flexible enough to cover all kind of people’s motivation. Peoples have different values, beliefs or motivation. Some doesn’t seek for monetary rewards only, but they also looking for higher job satisfaction, the relationship with the people together and participation in value creation. Besides that, different cultures can influence the meaning and value of money.

After go through the disadvantages of current reward system, we suggest Coca-Cola to evaluate their own reward system effectiveness rather than giving more reward to ensure performance and rewards can reach the balance level. First of all Coca-Cola company must ensure their rewards given are valued by the employees. Delivered rewards have to drive the specific employee behaviors to achieve business strategies. Every rewards given will be appreciate by employees and push themselves to achieve higher productivity and performance. Make sure the company and staffs alike understand the value of each reward to ensure transparency. Therefore it is better to have combination of reward system to provide the workforce from different races and cultures can gain their values. Secondly, Coca-Cola must ensure rewards are relevant to attract and retain the staff who can contribute well to the company either way in intrinsic rewards or extrinsic rewards. Last but not least, watch out for unintended consequences too. Some employees may take rewards for granted and company have to make confirmation on rewards given must be make good use by them.

For multinational company like Coca-Cola, although they had decentralized the management decision making, job analysis and designing follows the same international structure. Although some deviations may be found on some regions, the company adapts a similar job description and analysis structure. Therefore, Coca-Cola should encourage employees to have self-leadership to perform better in every task. It helps to apply self-motivation and self-direction to accomplish task and cope with company business strategies. The elements of self-leadership included with setting personal direction, construct thoughts pattern, design natural rewards, self-monitoring and self-reinforcement. It trains employee to have higher levels of conscientiousness and extroversion, and positive self-evaluation too. In organizational factor, it turns to more job autonomy, employees tend to have participative leadership and able to build measurement-oriented culture. When employees capable of doing their jobs well, organization will require less man power and save more cost on human resources. Well-trained employees will be more productive when they’re more directly involved in decision making process, rather than closely supervised by many layers of management. Empowerment also recommended in Coca-Cola. Empowerment is based on the idea that giving employees skills, resources, authority, opportunity, motivation, as well holding them responsible and accountable for outcomes of their actions that will contribute to their competence and satisfaction. When employees believe they have the authority to make decision, it can improve task significance and task identity. They feel that they have more freedom and discretion and their action influence the company’s success. They don’t have much excuse to escape from their responsibilities. They know more options, limits, or have experience that helps them make good decisions for the company and the customer.  They have been trained.  That same training can easily be delivered to the frontline employees so they can make better decisions, quickly, and accurately.

In a nut shell, if Cola-cola wants to be more competitive in the market, they need to keep up with the changes in management. They need to concern about the organization directions and business strategies. Employees run the company and Coca-Cola must know how to reward his employees and restructure their organization structure whenever the time has come.


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