6) Reward Management
Introduction to Reward Management
Armstrong (2007) rewards employees in a reasonable and consistent manner based on their value to the organization to further achieve the organization's strategic goals. According to (Manus et al, 2003), total rewards include all types of rewards-indirect, direct, internal and external. All aspects of rewards, namely basic salary or contingent compensation, employee benefits and non-financial rewards are all linked together. As an Example, AIA pays the 3 month's salary as a bonus. According to Thompson (2002), career opportunities, learning and development, the intrinsic motivation provided by the job itself, and the quality of work life provided by the organization.
The Significance of Total Reward
Rewards can create a work experience that meets the needs of employees, solve a wide range of problems through the formulation of agreements, and solve the changing values of employees in the most effective way, and encourage them to make more efforts (O'Neill, 1998). Pfeffer (1998) pointed out that creating a fun, challenging, and empowering work environment that enables individuals to use their abilities to do meaningful work and appreciate them may be a more positive way to increase motivation and performance, although creating such an environment may be more difficult than simply turning the reward lever, it takes more time.
Benefits Of Reward Management
Greater impact - Rewards and recognition for outstanding work performance can affect employee morale and job satisfaction. According to social communication theory, employees are obliged to respond with a higher degree of participation after receiving rewards and recognition from the organization (Swapna, 2019).
For an example: AIA, working with the best people, employees will work with respected industry leaders and managers, and they will guide and develop employees on a common path to success.
Strengthen the employment relationship: The employment relationship established through a complete reward method will maximize the use of relationship and transaction rewards, so it is more attractive to individuals (Armstrong, 2009). As An example: Google allows employees to set quarterly goals. The goal must be difficult and measurable. These goals set by employees gave rise to Google tools. These include the new search engine and Gmail (as searchable email). Employees put forward some ideas that changed the face of Google (swipeclock.com, 2020).
Flexibility to meet individual needs: As pointed out by (Milkovich et al, 1998), relationship rewards can make individuals stronger in the organization because they can meet those special personal needs. For example: Dell has formally formulated a policy of flexibility to provide support structures for all employees-saving $12 million a year in the process. It is not surprising that Dell, a large computer company, started to build its flexible work culture in 2009 Accept technology wholeheartedly (business. Unicom).
Talent management: The talent life cycle is how most people interact with the organization. Talent management is the management method of the talent life cycle. The level of life cycle management will determine the effectiveness of these talent investments (Schiemann, 2013).
Figure 3 Talent life cycle.
Source: W.A. Schiemann /Journal of World Business (2013)
Rewards system
The main components are financial and non-financial rewards, which combine to form a total reward system. Performance management plays an important role in supporting non-financial rewards and can be used to provide information for performance or payment decisions. All these components together affect the performance level (Armstrong. 2014).
Figure 4: Rewards management system
Source: (Armstrong, 2014)
Reference
Armstrong, M., 2009. Armstrong's Handbook Of Reward Management Practice. London: Kogan Page.
Bloom, M. and Milkovich, G.T., 1998. Relationships among risk, incentive pay, and commitment. Journal of Vocational Behavior,
HUMAN RESOURCE MANAGEMENT PRACTICEArmstrong, M., 2007. A Handbook Of Employee Reward Management And Practice. 2nd ed. London: Kogan Page.
Manus, T M and Graham, M D (2003) Creating a Total Rewards Strategy, American Management Association, New York
O’Neal, S (1998) The phenomenon of total rewards, ACA Journal, 7
Pfeffer, J (1998b) Six dangerous myths about pay, Harvard Business Review, May/June
Schiemann, W.A., 2014. From talent management to talent optimization. Journal of World Business,
Swapna, P., 2019. Reward and Recognition Impact on Job Satisfaction and Performance in retail sector: an Empirical Study from Andhra and Telangana. JOURNAL OF MECHANICS OF CONTINUA AND MATHEMATICAL SCIENCES, 14(5).
Well said Nimna. According to Richman (2006 ), recent studies have shown that high employee engagement translates into increased discretionary effort, increased productivity and lower employee turnover, as well as increased customer satisfaction and loyalty, profitability and corporate shareholder value.
ReplyDeleteAgreed with you. Business organizations use many types of rewards to enhance the workers performance. However, it is not yet clear as to which type of rewards in particular has the most effective impact on people reactions and performance (Mohommed, 2016).
ReplyDeleteAs you correctly stated Lederman (2018) has mentioned in his book CRAVE that we can Enhance Employee Motivation in 10 Minutes and he further explains that the Strategic employee recognition is a management discipline that goes way beyond 'being the right thing to do.' Recognition should not be viewed only as a feel-good, altruistic endeavor. In addition Armstrong (2013) stated motivation and commitment are generally being replaced now in business by engagement, because it appears to have more descriptive force and face validity.
DeleteAgreed you Chathuranga. Employees are always like to be rewarded. As per the Preffer (1998) ‘’Little evidence demonstrates the efficacy of rewards, although much evidence indicates that rewards & their design appear large in management attention’’.
ReplyDeleteWell said, Brad (2017) says engaged employees are typically the employees who are motivated intrinsically. The author also believes employee motivation and employee engagement cannot be attained one without the other. Shawn (2016) adds more value and makes it simple to understand by explaining that the employees show a general percentage of engagement towards their job not because they are emotionally willing, but they are liable to be bound with the job. The reason “Why” is determined by the motivation which can comprise Intrinsic or extrinsic motivators, depending on the Individual psychology. “What” it provide is the perfectly applied engagement that arouses emotionally, representing an enhanced performance.
DeleteThis is important topic when think about employee satisfaction. Incentives, rewards, and recognition are the major factors that impact employee motivation (Danish and Usman, 2010). Often, rewards and recognition take the form of extra compensation for employees who carry out the activities.
ReplyDeleteAgree with you, according to Armstrong, (2014), motivation is the strength and direction of behavior and the factors that influence people to behave in certain ways. People are motivated when they expect that a course of action is likely to lead to the attainment of a goal and a valued reward – one that satisfies their needs and wants.
DeleteAgreed with you and according to Pinar G. (2011) when organization having proper reward management system, employees are highly motivated.
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DeleteWell said Sumeera, Vrooms expectancy theory is a cognitive theory, which arouse on that definition of motivation. The theory discusses the relationship between employee effort, performance and rewards with the formulation to practical scenario, in order to support managers with the estimated chances and probabilities, with relative to changing situations (Richard et al, 2004).
Agreed. In fact, when it comes to rewards, as per Das, B.L. and Baruah, M.(2013) The phrase "reward" refers to something that a firm gives its employees in exchange for excellent performance and results, and something that the employees want.
ReplyDeleteI agree with your view, Robbins (2004),defines employee motivation as:the willingness to expend high levels of effort toward organizational objectives, influenced by the effort's ability to fulfill individual needs.
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