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Implications Of Reward Management
Implications Of Reward Management
Advantages and disadvantages of reward management
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Effective Reward Systems in the Workplace
Reward systems in the work place are not a new idea in the workplace, but they are the key to having happy employees and happy employees mean better output. Reward systems are systems used by companies where employees who achieve particular results are paid more or get other advantages. Some employers offer pay as incentives, while others offer benefits, some use a combination of both types. Employees within a company want recognition for the time and effort that they have put into a task required of their job. The use of reward systems not only enhances the company but it gives the employee a feeling of personal connection and investment into the company. Building a reward system can be a great asset to the company, by allowing the employees to feel that they are a part of the company. Reward systems are an important tool and key concept to managing an organization effectively.
Reward systems have been evolving and growing throughout the years, but there are many types that have always been there. Base pay is the most common, which is an employee’s base wages and salary that they are paid on hourly, weekly, monthly, or annually (Luthans, 2011, p.94). Merit based pay is another type of incentive, which rewards and motivates an individual to perform their jobs to the standards of their employers. According to the text Organizational Behaviors, by Fred Luthans, there are three other options for paying an employee for their performance: individual incentives pay plans, using of bonuses, and the use of stock options. Individual based pay plans are based on the employees output and/or quality. Some organizations use bonuses as incentives to their employees. These are offered sometimes as op...
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Compensation is made of a base salary (paid by the hour, work or the year; excluding overtime or bonuses), variable pay (bonuses, profit sharing/stock options which work hand and hand with the performance of the company), and benefits (to include health insurance/savings plans – 401(k), or tuition reimbursement). The traditional way of determining base pay for jobs was to compare jobs in the same industry. Now industry and market, no long work by themselves, the current thinking is more person-based that considers knowledge, skills, and competencies of the work. This, however, is best suited for high-performing environments that remain flexible in their deployment of human capital.
In a business or a workplace, it is essential for the organization, which consists of the employers, the managers, and their employees, to work towards reward programs within the human resources in order to create a healthy and cordial work environment and most importantly, to efficiently achieve business’ goals. In Carol Patton’s (2013) article, Rewarding Best Behaviors, she explains the importance of several companies that are beginning to recognize their employees, not just for the end-results, but for reflecting good behaviors towards the business’ values, such as demonstrating creativity on certain projects, problem solving towards certain issues, and also collaborating with fellow co-workers. Patton stresses that these reward programs could help suffice the overall being of a company as long as the rewarded behaviors correlate with the corporate strategy. Patton expresses that some things human resources must comprehend include “how its company creates success, what drives its business strategy and what behaviors are needed from employees to achieve that success” (Patton, 2013 para. 15). Moreover, the employee would be reflected as a role model for others and perhaps influence them to demonstrate comparable behaviors.
Organizations face massive challenges in attracting and retaining a high-quality and productive workforce. Companies are continually looking for new ways to keep their employees satisfied at all levels in order to harness greater productivity and ideas from people while keeping them motivated and happy. One real challenge examined earlier is the need to transform General Motors to be a much more productive and fully utilized organization by examining the hourly workforce. This is a great change from the traditional "us versus them" mentality of the past between management and the union.
Reward and recognition has to be promoted for small and large achievements. An effective reward’s program keeps employees engaged, dedicated, and committed to the organization.
The sales company will then use the reward system to get the salesmen to sell the most cars, and the person that sells the highest number will be rewarded with an incentive, recognition, or a prize. Using rewards will encourage employees to try to sell as many cars so that they can be rewarded. Now if you apply this method in healthcare, employees will focus in promoting patient safety and everyone will stay focused in their job and do everything that is under their ability to improve patient safety. So, with the reward system, healthcare employees will focus more on reducing medical errors, providing good quality service, and making sure that potential threats to patients are eliminated (King,
Reward systems are used in classroom around the world to help encourage students to reach their highest potential. Rewards are enforcers of behavior and come in many shapes, sizes, and some are not even visible at all. Teachers use these as incentives to engage their students and help control student behavior. However, one form of reward may not work for every student nor are they guaranteed to work all the time. This is why it is important to know the strengths and weaknesses of the different reward systems so that teachers can adequately utilize them in their classes.
The link between employee motivation and the rewards they receive from their employers are vital to maintaining a loyal, reliable and steady workforce. The two categories of rewards, also referred to as motivators, are intrinsic and extrinsic. “The primary difference between the two types of motivators are extrinsic factors arise from outside the body of the employee, where as intrinsic elements arise from within the employee.” (Cherry, About.com) Extrinsic motivators for example would consist of working to earn money, job security, and rewards like extra time off, earned vacation days, a pay raise etc. Intrinsic motivators involve the personal motivating factors within an employee that keep them satisfied while
...r investigate what sort of rewards or fringes would their employee’s desire compared to the old method of monetary incentives for the beneficial for the company”.
The foundation for effective job performance and compensation system can be traced to effective job analysis process. Fundamentally, a job analysis should consist of a thorough examination of the job 's duties and knowledge, skills, abilities, and qualities that are required in order to be successful in a specific position, upon which appropriate rewards or compensation can be determined. For many perspectives, jobs are usually made up of requirements and rewards, where rewards may be regarded as a major recruitment strategy for motivating potential employees in order to influence them to stay the organization for a longer period as well as enhance their performance. The most common or basic form of rewards which attracts employees is extrinsic
Incentive reward engagement offers a win-win situation for the employees and the company. Kelleher believes that incentive is a form of recognition and builds engagement through company’s and employee’s obligations towards a common goal (2014). The company has a “Growth Incentive Scheme” for the production workers. Special monetary incentives are provided should the workers achieve the monthly output target. Through the rewards, employees feel motivated towards their work and thus, contribute towards the company’s
Merit pay is a term used to describe the compensation of a person base on its merit. It rewards people based on their high achievements not just base on there job description. Susan Heathfield (2016) describes Merit pay as additional pay for those with higher performance. Heathfield also stated that she believes that it sends a powerful message and encourages other to increase their effort. Many have argued regarding the incorporation of merit pay in the education system, whether it is encouraging or f it is discouraging to those who do not receive the special pay increase.
Johnson, Sam T. "Plan your organization’s reward strategy through pay for performance dynamics: Compensation & Benefits Review 30, Number 3: (May/June 1998): 67-72
Person focused pay programs are not for all organizations or all positions. But this program is great when one is looking to improve the culture of an organization, to encourage growth within the organization, and it aids in the process of motivating employees on an individual bases. This program model suggest that employees need to shift the mindset away from seeing pay as a privilege. Person focused pay programs acts as a reimbursement and as a reward for obtaining and executing pertinent skills and knowledge. This pay program can have advantages and disadvantages but if one is looking to reward an employee on an individual bases this is the program that one should use so that one can retain and entice current or future employees.
In the business industry organizations are looking for the system that is effective and cost-efficient. “Equity-based reward is a non-cash payment that represents ownership in the firm.” This type of rewarding is including options, restricted stock, and performance shares.” Equity compensations allow employees of the
Management spends a huge amount of time to design incentive systems and schemes to motivate their workers and to ensure they work in their best possible manner. Motivating workers by giving them decent pay helps in winning employees heart to make the work done efficiently, significantly and effectively. The most effective way to motivate people to work productively is through individual incentive compensation (Pfeffer, 1998). An attraction of getting more is a powerful incentive to people for high performance. While most people agree that money plays a major role in motivating people, in organizations there is a widespread belief that money may also have some undesirable effects on morale.