STRATEGIC REWARD MANAGEMENT – SYMBOLISM AND REWARDS
There are numerous examples of organizations that, wary of the ways in which extrinsic rewards can focus employee attention to the exclusion of other considerations. Similarly, how, and for what, peoples are rewarded within the organization sends strong symbolic messages. Organizations, which recognize this, can use the reward system to signal strategic or cultural changes. One distinctive element of the teamwork philosophy was the “one-up” component of NCR’s management incentive plan. Wageman studied differences in performance among these different self-directed teams, and found that a key factor in determining success was how team members were rewarded for excellence. Where teams were compensated with mixed rewards roughly half to individuals, half to the team performance suffered. The message of shared, common fate is powerful in an organization truly seeking to build a culture of teamwork. Whether or not pay practices are kept private or communicated openly also sends a powerful symbolic message. Neither gainsharing nor profit sharing satisfactorily address the five questions posed in the integrated model for typing pay to performance. It’s feasible to argue that the good management practices that need to accompany gainsharing are as responsible for any changes in productivity and group cohesiveness as are the program’s payouts. In order to increase the line of sight between performance and compensation, the plan paid out every week, and was focused on operational results that employees could actually affect. Particularly interesting are the changes in management style and in other HRM systems that accompanied the introduction of the gainsharing plan. Employment involvement programs have also been implemented, so that employees can participate in areas such as productivity and safety committees and process improvement teams.