Management Control Systems: Rewards Systems

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REWARDS SYSTEMS: THE CASE OF TANZANIA CIGARETTE COMPANY (TCC)

A reward is a consideration that is given to an employee by the organisation on return to the quality of services rendered by the respective employee. Owners of the organisation (in most cases, shareholders) are the ones who will approve the rewards to employees including the directors, head of departments and the lowest cadre of employees. A company may also reward non-employee stakeholders for their contribution to the organisation.

The rewards systems as part of the management control systems, are designed in organisations to motivate employees and managers to perfom better. A well designed rewards system is expected to motivate people to contribute to the attainment of goals. Also, talented and highly competent employees are expected to remain with the organisation if a well designed rewards system is in place. They will have the feeling that they are valued.

Rewards systems are also designed to achieve goal congruence in organisations and avoid agency problems since the shareholders, other stakeholders and the managers are expected to be making the same decisions. Targets that managers are expected to achieve are supported by rewards that managers are looking for.

NATURE AND EXAMPLES OF REWARD SYSTEMS AT TCC

At TCC, there has been an approved system of rewards to all employees based on financial perfomance indicators like sales, production, profit and even number of outlets visited by salespersons.There are also non-financial perfomance indicators like quality of cigarettes produced, customer satisfaction, and customer complaints.

There is a system of reward is in the name of NYOTA AWARDS. This is a typical individual rewards. Employees who have excelled in their various departments are rewarded with certificates and cash prizes every year. These are based on both financial and non financial perfomance indicators.

Bonuses are also rewarded each month depending on sales...
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