Title: Reward Management
Team: Rishi Juneja and Karan
The reward system emphasizes a core facet of the employment relationship: it constitutes an economic exchange or relationship. Global forces impact on pay systems. Changes in reward systems mirror changes in work design and organizations, and the emphasis on individual performance.
The nature of reward management
There are two types of rewards: Extrinsic and Intrinsic
Pay or reward strategy is a plan and actions pertaining to the mix of direct & indirect pay. Objectives of reward system are to attract and retain high performing employees, maximize employee performance, and satisfy legal standards. All reward systems contain two elements that are in contradiction with each other: cooperation and tensions and conflict between employer and employee.
A model of reward management
Reward model contains five basic elements: strategic, reward objectives, reward options, reward techniques, and reward competitiveness.
Strategic perspective focuses on reward choices which support strategic goals.
Reward objectives emphasize the linkage between a reward system and human behaviour. The psychological contract emphasizes the importance of reward management.
1. Reward options for the organization include: base pay, performance pay, and indirect pay (benefits).
2. Reward techniques examined include job analysis, job evaluation and performance appraisal. These techniques are used to achieve, internal equity, which refers to the pay relationships among jobs within a single organization.
3. Reward competitiveness refers to comparisons between the organization’s pay and that of its strategic competitors. External competitiveness depends upon, in part, labour market and product markets conditions and management’s strategy.
Reward options for the organization include
> Base pay
>and indirect pay
Job analysis and the reward model
Definition: a systematic process of collecting and evaluating information about jobs. The process is used to achieve internal equity. Job analysis is a systematic process for collecting information about jobs. The information is summarized into job descriptions that serve as an input into the job evaluation process Process of job analysis consists of two stages: data collection and application
Job evaluation and the reward model
Definition: A systematic process designed to determine the relative worth of jobs within a single work organization. Job evaluation can help to ensure that reward structures are internally equitable. It is emphasized that the process depends upon subjective judgements. Process of job evaluation has four steps: collection of data; selection of compensable factors; evaluation of job; and assign reward for the job.
Methods of job evaluation:
a) Ranking jobs according to relative value is the simplest and fastest method. It is also highly subjective and difficult to defend *
b) Classification places jobs in a hierarchy or series of job grades. *
c) Factor comparison evaluates jobs on the basis of two criteria: a set of compensable factors and, second, wages for a selected set of jobs. The complexity limits its application. *
d) Point Method establishes a hierarchy of jobs on the basis of three criteria: compensable factors; factor degrees numerically scaled, and third, weights reflecting the relative importance of each factor. This method is the most frequently used. It is emphasized in the text that care should be taken to ensure that gender bias in job evaluation ratings does not exist .
Reward competitiveness and the reward model
Definition: Refers to comparisons of the organization’s pay...