Reward Management

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Advanced Human Resource management (LLSMS 2104) Teacher: Inna Erhnet

Theoretical and practical approach of Reward Management
2nd of December 2011

Group number 10: Marco Abbiati: marco.abbiati@student.uclouvain.be, 0483/37.72.81 Paula Andrea Castaño: paula.castano@student.uclouvain.be, 0488/08.05.67 Farah Chalouat: farah.chalouat@student.uclouvain.be, 0488/95.90.64 Jean-François Dufour: jean-francois.dufour@student.uclouvain.be, 0472/74.21.93 Stéphanie van Eetvelde: stephanie.vaneetvelde@student.uclouvain.be, 0477/60.39.44 Alexandra Morrosch: alexandra.morrosch@student.uclouvain.be, 0485/72.25.89 Delia Sechilariu: delia.sechilariu@student.uclouvain.be, 0472/94.83.82 Thomas Vansiliette: thomas.vansiliette@student.uclouvain.be, 0488/60.48.89

Number of words: 1994 words
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Introduction Since the Industrial Revolution the approach of HR changed from a pure financial approach to a core function within the business1. Human Resource could be considered nowadays as the most precious resource a company holds as it constitutes the link between the people and the company’s strategy and goals. HR fulfills this role through 4 main activities: staffing, reward management, employee development and employee maintenance. This paper will focus on reward management and the challenges the company faces in finding the best way to implement a reward management strategy that suits it. Different theories and practices exist; however the company has to consider the needs and desires of its own people and environmental context in order to find the system that best suits the company. Theories and approaches

One way to illustrate the link between different HRM activities is the Fombrun, Tichy and Devanna model. According to this model, HRM has 4 key activities: Selection, Performance, development and Rewards. Even though this model is said to leaves out the notion of management’s strategic choice, it shows the coherence of internal HRM policies and the importance of matching internal HRM policies and practices to the organization’s external business strategy2.

Source: John Bratton, Jeffrey Gold (2000), Human resource management: theory and practice, second edition 1

See appendix I - source : Jean Moisset, Pierre Toussaint, Jean Plante(2003), La gestion des ressources humaines pour la réussite scolaire, presse de l’université du Québec 2 John Bratton, Jeffrey Gold (2000), Human resource management: theory and practice, Second edition

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Thereby, it can be said that reward management is very closely linked to employee retention, training and development and strategic HRM. And without a clever practice of these activities, a reward management cannot be successful. Reward management was born because managers had to motivate their employees in order to reach company’s objectives. “A great deal of the ideology of work is directed at getting men to take work seriously when they know that it is a joke”3 . Motivating the staff became a concern as soon as a positive relation between motivation and high performance was demonstrated. Motivation is not only used to achieve a certain amount of output needed to align with company’s goals, but also put in the work of the employees an humane and selfsatisfying aspect. Throughout the last centuries, many studies have been made. Some studies focused on what people value as a decent reward, thereby “how to reward” (content theories) and others focused on the effect of a certain reward system, “why” implementing this system (process theories). Among content theorist Taylor can be mentioned. For him, people were rational and only driven by financial rewards. Then, the Hawthorne studies showed social needs were as important as economic needs. Abraham Maslow developed a pyramid expressing a hierarchy of needs: physiological>safety>belongingness>esteem>self-actualization. Each person stands at a certain level and will need specific motivators. Some other content theories are motivation factors of...
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