HR50567NI Leading, Managing and Developing People

Submission of Summative Assessment

Assessment Detail
Module Code and Title HR5067NI - Leading, Managing and
Developing People

Course Title BA (Hons) Business Administration

Level 5
Cohort Spring 2023
Credit Semester Long
Component Comp 002
Weight 50%
Assessment Title Individual Written Coursework
(2000Words)
Module Lecturer Mrs. Sajeena Dwa

Submission Detail:

Student’s Name/s University ID

Anish Bhandari 22015997

Date of Submission 8th May 2023

Words Count 2255

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Acknowledgement

"I, Anish, the writer of this assessment would like to express my sincere gratitude to my
module leader Mrs. Sajeena Dwa for her valuable time, advice, and assistance
throughout this coursework. I am also deeply grateful to London Metropolitan University.
and Informatics College Pokhara for providing me with this incredible opportunity

Thank you!! Anish Bhandari , Second Year BBA 2nd May 2023" .

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Table of Contents

Abstract ............................................................................................................................. 1

Question1. ......................................................................................................................... 1

Question 2. ........................................................................................................................ 4

Question 3. ........................................................................................................................ 6

Question 4. ........................................................................................................................ 8

Self- Reflection................................................................................................................ 10

Bibliography .................................................................................................................... 11

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Abstract

This case study aimed to investigate Gravity Payments' decision to raise the minimum
pay to $70,000 and the effects it had on retaining and motivating its workforce. Analysis
based on HRM/HRD and leadership theories as well as Heller's framework for future
managers.

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Question1.

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

Introduction:

The minimum wage for all employees of Gravity Payments, a private provider of financial
services and credit card processing, has increased to $70,000. Dan Price, the CEO, made
this choice, and stakeholders and workers had differing opinions about it. This case study
examines Dan Price, the CEO of Gravity Payments, decision to increase the minimum
wage for all employees to $70,000 and its effects on worker engagement, motivation, and
wellbeing. Dan Price's leadership style is evaluated using Heller's framework for future
managers. Although not all employees and stakeholders were pleased with the wage
raise announcement, it had good effects nonetheless, such as raising employee
enthusiasm and commitment and enhancing their well-being. (Heller, 2014)

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Critical analysis

Heller's framework of future manager identifies four key attributes that successful
managers should possess, which are, (Heller, 2014) be a great people manager, be data-
driven and analytical ,be a strategic thinker and be a compelling communicator

Based on the case study, Dan Price, the CEO of Gravity Payments, possesses these
attributes in the following ways:

1. People manager: Dan Price increased the minimum pay to $70,000 as a way of
expressing his care for his workers' welfare. He developed a clear compensation
policy and made sure that all workers received equitable pay. By doing this, he
fostered an office environment that valued justice and equity. (Heller, 2014)

2. Data-driven and analytical: Dan Price decided to raise the minimum wage after
examining several economic studies and information on worker satisfaction and
output. In order to make it possible, he made changes to the company's cost structure
after analyzing the financial impact of the salary increase on the company's
profitability. (Davenport, 2012)

3. Strategic thinker: Dan Price understood that raising the minimum wage would be
advantageous for both workers and the business as a whole. He anticipated that by
fostering a favorable work atmosphere, employee loyalty and productivity would rise,
resulting in more profitability and growth. (Rumelt, 2011)

4. Compelling communicator: Dan Price was able to effectively communicate the

rationale behind the wage increase to employees, stakeholders, and the media,
despite the controversy surrounding the decision. He was also able to rally support
from his employees and the public through his communication skills.

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Use of relevant academic theories and examples

Dan Price's leadership style and actions align with several HRM/HRD and leadership
theories, including:

i) Equity theory: Dan Price decided to raise the minimum wage because he wanted
to improve workplace justice and fairness. This is consistent with the equity
hypothesis, which contends that people are driven by the need for justice and
equality. (Yukl, 1999)

ii) Transformational leadership theory: Dan Price's actions demonstrate

transformational leadership, which involves inspiring and motivating employees to
achieve greater levels of performance and success. By increasing the minimum
wage and creating a positive work environment, he demonstrated a commitment
to employee well-being and motivated employees to be more productive and
engaged. (Northouse, 2018)

iii) Servant leadership theory: Dan Price's choice to raise the minimum wage is also
consistent with the ideals of servant leadership, which emphasize on the needs of
employees and giving them the tools, they need to thrive. He showed a dedication
to meeting the requirements of his employees and fostering their success by
boosting the minimum pay and encouraging a healthy work environment.

Conclusion
Dan Price's actions demonstrate a commitment to several HRM/HRD and leadership
theories, all of which are focused on creating a positive work environment that promotes
employee well-being, engagement, and productivity.
To conclude, Dan Price's leadership style and actions align well with Heller's framework
of future manager, demonstrating his ability to manage people, use data and analysis to
make decisions, think strategically, and communicate effectively.

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Question 2.
What was the purpose of the big announcement, and analyze if this announcement is
able to improve employee’s motivation and commitment?

Introduction
The purpose of the big announcement by Gravity Payments to raise the minimum salary
of all employees to $70,000 was to reduce income inequality and improve the financial
well-being of employees. By implementing this policy, the company aimed to create a
more equitable workplace and increase employee motivation and commitment.

Critical analysis
From a motivational perspective, this policy is based on the idea that paying employees
more money can improve their job satisfaction and motivation, as it addresses their basic
needs for financial security and stability. Furthermore, the policy is likely to increase
employees' perceptions of fairness and equity within the organization, which can improve
their commitment and loyalty to the company.
However, the announcement was not welcomed by all employees and stakeholders.
Some employees felt that it was unfair that their salaries would be equalized with those
of their less experienced colleagues. Some stakeholders were concerned about the
potential negative impact of this policy on the company's financial stability and
competitiveness.

Real-life examples related to the scenario

Gravity Payments: The decision by Gravity Payments to raise the minimum salary of all
employees to $70,000 is a real-life example of an organization implementing a policy to
address income inequality and improve employee well-being. This decision was driven
by the CEO, Dan Price, who believed in creating a more equitable workplace.
(Steinberg, 2017)

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Relevant academic theories

Maslow's hierarchy of needs theory proposes that individuals have a hierarchy of needs
that they seek to fulfill. This hierarchy includes physiological needs (such as basic salary),
safety needs, social needs, esteem needs, and self-actualization needs. By raising the
minimum salary to $70,000, Gravity Payments aimed to address the basic physiological
needs of its employees, providing them with a sense of financial security and stability.
(Maslow’s Hierarchy of Needs, May 10, 2023) (Maslow, 1970)

Conclusion
In conclusion, while the big announcement had the potential to improve employee
motivation and commitment, its effectiveness was influenced by employees' perceptions
of fairness and equity, as well as the concerns of stakeholders. Therefore, it is important
for HR managers to consider the potential outcomes and reactions of such policies and
to communicate them effectively to all stakeholders in order to ensure their success.

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Question 3.
Do you agree that bigger paychecks have led to fiercely loyal employees? How do you
evaluate the impact a $70K minimum had on the overall well-being of the employees?

Introduction
Larger salaries do not guarantee that workers will be fervently devoted. While fair pay is
crucial, other elements like job satisfaction, work-life balance, and chances for
professional advancement also affect an employee's loyalty. (Chamberlain, 2017). A
$70K minimum has a good effect on employees' general well-being since it eases
financial stress and gives them a sense of stability. However, one should also take into
account the company's long-term financial effects as well as any prospective productivity
losses.

Critical analysis and Examples

Research (Locke, 1990) has shown that pay is an important factor in employee motivation
and job satisfaction. When employees are paid fairly and equitably, they are more likely
to be motivated and committed to their jobs. In the case of Gravity Payments, the decision
to raise the minimum salary to $70,000 was likely seen by many employees as a sign that
the company valued and appreciated their work, which could have improved their
motivation and commitment.
Additionally, higher pay can have a positive impact on employees' financial well-being,
which can in turn lead to improved mental health and overall well-being. Financial stress
is a significant source of stress for many employees, and that financial worries can have
a negative impact on employee health and well-being.
However, it is also important to note that other factors, such as job security, work-life
balance, and opportunities for growth and development, can also play a significant role in
employee motivation and commitment. Therefore, it is important for HR managers to take
a holistic approach to employee well-being and consider a range of factors when
developing strategies to improve employee motivation and commitment.

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Relevant academic theories

The decision to raise the minimum salary of all employees to $70,000 in Gravity Payments
can be seen as a practical application of the equity theory in HRM (Hassall, 2017). The
equity theory suggests that employees compare their inputs (efforts, skills, experience,
etc.) and outputs (pay, benefits, recognition, etc.) to those of others in similar roles and
positions to determine if they are being treated fairly. By raising the minimum salary of all
employees, the company is aiming to create a sense of fairness and equity in the
workplace, which can lead to increased motivation and commitment from employees.

Additionally, a number of leadership theories may be used to examine Dan Price's

leadership style as the CEO of Gravity Payments.His choice to increase the minimum
wage for all employees is an example of transformational leadership (Bass, 1998) in
action, which entails inspiring and encouraging followers to reach their maximum potential
and advance the organizational goals.

Conclusion
In conclusion, Gravity Payments' plan to increase the minimum wage for all employees
to $70,000 offers both advantages for employee welfare and possible drawbacks for the
business. While increased pay may increase motivation and commitment, it is also
important to take other aspects into account, like job satisfaction, work-life balance, and
possibilities for professional advancement.

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Question 4.
The benevolent move didn’t please some employees and stakeholders. As a HR
Manager, how would you retain the efficient employees and address the challenges faced
by the company?

Introduction and Critical Analysis

As a HR Manager, (How To Become an HR Manager (Duties, Salary and Skills), 27

January 2023) there are several steps I would take to retain efficient employees and
address the challenges faced by the company:

1. Conduct a survey: I would conduct a survey to understand why some employees are
not happy with the wage increase. It will help me identify the reasons for their
dissatisfaction and address their concerns
2. Address concerns: In consideration of the survey's findings, I would address workers'
worries. For example, if some workers believe that they are not being paid properly in
comparison to others, I would explain the justification for the pay raise and the
payment structure
3. Provide training and development opportunities: I would provide workers the chance
to grow professionally and learn new skills by giving them training and development
opportunities. Their job happiness would rise as a result, and the business would gain
from an increase in worker effectiveness and production.
4. Foster a positive work culture: I would promote a positive work culture that values
employee feedback, recognition, and collaboration. This would create a sense of
belonging among employees, improve employee engagement, and ultimately lead to
greater employee retention.

By implementing these steps, I would aim to address the concerns of dissatisfied

employees, retain efficient employees, and improve the overall well-being of employees
in the company.

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Examples
Some real-life examples of companies and leaders who have applied similar HRM/HRD
theories or leadership styles to those demonstrated by Dan Price:
Netflix: The dominant streaming company is renowned for its creative HR practices,
including its unlimited vacation policy and lax dress code. The CEO of Netflix, Reed
Hastings, and other top executives place a high value on fostering an environment where
people are free to make decisions and take chances. This strategy prioritizes mutual
respect, teamwork, and personal freedom. (How Netflix Reinvented HR, Jan,2014)

Relevant academic theories

Training and development: The point I mentioned above ( providing employees training
and development ) is in line with the theory of human resource development (HRD). HRD
emphasizes the importance of continuous learning and skill development to enhance
employee performance and career growth.

Conclusion
The decision to raise the minimum salary to $70,000 had both positive and negative
consequences for Gravity Payments. While it improved the overall well-being of the
employees, it also created resentment among some employees and stakeholders and
potentially decreased productivity. As a HR Manager, it is important to address these
challenges by gathering feedback, offering opportunities for growth and development,
implementing performance-based incentives, and reviewing the company’s financial
situation. By doing so, the HR Manager can retain efficient employees and ensure the
long-term success of the company.

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Self- Reflection

Throughout the module , I had the privilege of being guided by Mrs. Sajeena Dwa, who
provided valuable insights into the fields of HRM, HRD, leadership styles, and the role of
effective leadership in organizations. This module has been an enriching experience, and
I would like to take this opportunity to reflect on my learnings and personal growth. I've
had the chance to explore numerous facts of managing and developing people in
businesses through my interaction with the areas of HRM, HRD, leadership theory, and
personality tests.
I have learned about the importance of effective recruitment and selection processes, as
well as the significance of training and development programs in enhancing employee
performance and productivity. Exploring various leadership theories has been
instrumental in expanding my knowledge of effective leadership practices. Moreover, my
engagement with personality tests has been a thought-provoking experience. The group
presentation was a significant learning experience for me. Collaborating with my friends
allowed us to combine our knowledge and perspectives to create a comprehensive and
well-rounded presentation. Through this process, I came to see how crucial good
cooperation, communication, and coordination are to reaching a shared objective. It was
uplifting to see the variety of talents and skills that each group member brought to the
table, which resulted in a vibrant and interesting presentation.

I would like to express to Mrs. Sajeena Dwa as the module leader. My future approach to
managing, leading, and growing people will surely be shaped by the information, insights,
and personal development I have obtained from this experience. I want to use the ideas
and guidelines I gained in this module in my future actions, whether they include
managing others or pursuing further education. With Mrs. Sajeena Dwa's help and the
information and skills I've acquired from this module, I have no doubt that I'll be able to
build a solid foundation for my future career .

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Bibliography

Heller, R., 2014. "The future of management is here: How the field must change". MIT
Sloan Management Review, 55(4), pp. 25-34.

Davenport, T. H. &. P. D. J., 2012. Data scientist: The sexiest job of the 21st century.
Harvard Business Review, 90(10), pp. 70-76.

Rumelt, R. P., 2011. "Good Strategy/Bad Strategy: The Difference and Why It Matters".
US: Crown Business.

Yukl, G., 1999. An evaluative essay on current conceptions of effective leadership.

European Journal of Work and Organizational Psychology, 8(1), pp. 33-48.

Northouse, P. G., 2018. Leadership: Theory and practice (8th ed.). Thousand Oaks,
California: Sage Publications..

Steinberg, A., 2017. Worth It: Your Life, Your Money, Your Terms.. US: North Star Way.

Maslow, A. H. 2. e., 1970. Motivation and Personality. New York: Harper & Row.

Hassall, R. C. a. M. J., 2017. "Equity Theory in Human Resource Management: A

Literature Review and Critique". Human Resource Development Review, 16(2), pp. 207-
230.

Bass, B. M., 1998. "Transformational Leadership: Industrial, Military, and Educational

Impact". New York: Routledge.

Locke, E. A. &. L. G. P., 1990. Theory of Goal Setting & Task Performance. Englewood
Cliffs(New Jersey): Prentice Hall.

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Chamberlain, A. (2017) ‘What Matters More to Your Workforce than Money’, Harvard
Business Review, 17 January. Available at: https://hbr.org/2017/01/what-matters-more-
to-your-workforce-than-money (Accessed: 15 May 2023).

How Netflix Reinvented HR . Available at: https://hbr.org/2014/01/how-netflix-reinvented-

hr (Accessed: 15 May 2023).

How To Become an HR Manager (Duties, Salary and Skills) Indeed Career Guide.
Available at: https://in.indeed.com/career-advice/finding-a-job/how-to-become-an-hr-
manager (Accessed: 15 May 2023).

Li, Y., Li, X. and Liu, Y. (2021) ‘How Does High-Performance Work System Prompt Job
Crafting through Autonomous Motivation: The Moderating Role of Initiative Climate’,
International Journal of Environmental Research and Public Health, 18(2), p. 384. doi:
10.3390/ijerph18020384.

Maslow’s Hierarchy of Needs .

Available at: https://www.simplypsychology.org/maslow.html (Accessed: 15 May 2023).

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