In an organization, the most important people are the employees. This is because employees run the organizations single handedly with their different skills. Without them, there will be no organization. For this reason, managers must try to find ways to motivate their employees in working harder and effectively. One strategy employed by the management is the reward strategy. In this case, those employees who have proven to apply exceptional skills often get rewards. Managers use developments as part of their reward to motivate the employees improve quality in an organization and at the same time improving employee personal skills. Therefore, the model of total reward in relation to the bank crisis of 2008 and the implications are discussed.


Discussion Question One

The total reward model can be described as every investment used by the management to improve any member of the organization. This means that total reward does not only include all tangible rewards like salary increment or bonuses, it also include intangible rewards like career growth, skills development and many others. In the past, total reward strategy only included the tangible rewards. In this case, employees were only given gifts and other monetary goods to motivate them (Brown 2001). However, companies have recently learned that rewarding employees with monetary gifts is not improving quality of work done by employees and personal lives of the employees. For this reason, they have realized that improving employees own personal goals can lead to greater success than giving monetary gifts (Katz & Welbourne 2002). Therefore, the use learning and development to reward employees is greatly improving employee motivation and quality of work performed.

The model of total reward strategy may seem simple but it is a little bit complex. The managers know that traditional models of monetary values still accounts but they are not enough. Managers often evaluate goals of the company for purposes of knowing what they need to do in improving their employee personal goals as they improve company goals. In many organizations, quality improvement is the main goal to increase their customer base. Secondly, they improve employee motivation for purposes of increase total revenues in the company as they reduce costs. Finally, managers always want to retain the best employees in the organization. This is because they improve quality and increase efficiency in the company (Moorhead & Griffin 2004). In most cases, retention of high skilled employees reduces company costs increasing total revenues of the company.

Two things have been attributed to the use of risk bonus culture. They include:

  • Fear comes first. The bankers risked selling securities out off fear yet they new securities were not stable enough to sustain the economy. Secondly, they knew that securities could not sell much as compared to when they are stable. In this case, fear made them sell the securities thinking they would make losses (Parker, Bindl & Strauss 2010).
  • Greed comes second. The bankers saw this as an investment opportunity to earn extra money for their pockets using the risk bonus culture at the expense of the stockholders. In the process, banks suffered a massive loss to the risk bonus culture succumbing to global financial crisis.

Discussion Question Two

In 2008, a financial crisis hit the banks all over American and Europe. In this case, bankers felt that they were not being paid enough money as compared to the job performance (Krugman, 2009). For this reason, they gave themselves bonuses to motivate them and take high-end risks. If this model is to work, the bank will be greatly benefit but if it was to fail as it did in 2008, the bankers will greatly benefit as the bank institution hurt terribly (Woodill 2010). Therefore, in 2008, bankers were the great beneficiary since they continued to receive their benefits but the banks were experiencing losses (Krugman, 2009). On the other hand, the country was being hit by a financial crisis. This led the government using taxpayers’ money to save banks.

Additionally, bankers have been quoted saying that the risk bonus taking culture cannot be taken away from the banks due to its immense spread across the banking sector. The bankers cannot be motivated by anything else apart from risk bonus taking culture. Therefore, it is extremely difficult for banks to employ the new modern reward motivating culture of learning and development. This is because the risk bonuses culture seems to be taking away bank benefits for their own benefits. On the other hand, if they employ the learning and development culture, they will improve quality of work performed in the bank and at the same time, they improve personal goals of bankers (Perez, Montes & Vazquez 2005). For this reason, banks should try to employ the learning and development culture and stop using the risk bonus culture.

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However, if they used reward model of learning and development, banks could not have succumbed to the global financial crisis. This is where employees will have to go for educational programs to help them increase quality of their skills. In this case, employees will grow personally since they have more skills. Secondly, mangers will improve careers of their employees since they have attained more skills. In the end, employees will be highly motivated and they will tend to work more efficiently and remain in the bank. On the side of the bank institution, efficiency of work performance will immensely increase. This is because the employees have gained extra skills they did not posses after attending the educational programs (Lewis 2012). Finally, the overall revenues of the bank will increase instead of decreasing.

The analysis above shows that banks need to change their motivational models to the modern motivational models. For instance, it can be noticed that application of poor skills of corporate governance and banking skills are leading to losses rather than profits. This shows that they need to develop and advance their skills. For this reason, banks need to employ reward model of learning and development. The mangers and directors of the banks need to research and find the most appropriate educational programs required for improvement of skills. In this case, they should select employees to attend educational programs (Tomlinson 2009). The employees selected should learn the skills and come back apply them as they teach the other employees the new skills. This way, high quality corporate governance will be made leading to high revenues rather than losses.

Finally, to eradicate risk bonus culture, managers need to think of long-term bank goals rather than short-term goals. Risk bonus culture is meant to achieve short-term goals. In this case, risk bonus culture spends a lot of money as compared to the benefits accrued. In the end, risk bonus culture is more expensive as compared to learning and development model. Therefore, managers need to make learning and development as part of their strategy (Gilley & Gilley 2000). This is where they will aim at improving career and personal goals of individual employees for purposes of improving the banks overall performance. At the end of rewarding employees, the bank will be performing efficiently and effectively as opposed to taking the risk bonus culture.

Discussion Question Three

A five years evaluation of the application of learning and development reward model in the banking sector, certain implications will be observed. These implications are:

  • The first implication is quality. Quality of work done in the bank will definitely increase. Learning and development entails improvement of employee skills and sharpening skills that are a bit rusty. In this case, quality of employees will increase significantly leading to an immense increase in overall quality of the banks. This means that quality observed in the banks currently will be different and better in the next five years. For this reason, the first implication will be the increase of quality in work performance.
  • Secondly, increase in revenues is the other implication. When quality of work done increases it will result to a significant increase in revenues. This is because customers will be attracted with high quality work.
  • Thirdly, an increase in employee motivation will be immensely observed. When a person notices that he or she is personally benefiting from a strategy, he or she will be greatly motivated to follow the strategy (Mackay 2007). As a result, he or she will make the strategy work effectively. Therefore, in the banking situation, employees do not have an opportunity to advance their career due to the increase in work. In this case, they will grab this opportunity and try to take advantage to upgrade to the next level of their career. This proves that they are highly motivated to make sure everything works effectively for their benefit (Allen & Kusy 2011). What they do not know is that the bank is also achieving benefits from the employee aggressive motivation to work. It can be noted that in the next five years the culture of employees will be highly motivational.

The diagram above shows the implications that will be attributed after the application of learning and development as a reward strategy to the employees in the banking institutions.


The traditional methods of rewarding employees are not enough to motivate the current wave of employees. The employees do not only need tangible benefits so that they can be motivated, they need a company that will improve their personal goals. These intangible goals touch the inner part of the employees. In this case, banking institutions will learn a lot from this model especially after the 2008 risk bonus crisis. For this reason, they will immensely benefit if an evaluation of banks was to be done after five years. Therefore, learning and development model is a perfect strategy to improve quality performance in the work.

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