Reward Management System

Topics: Incentive program, Motivation, Reward system Pages: 15 (5470 words) Published: April 29, 2010
Reward management is about the development, implementation, maintenance communication, and evaluation of reward processes. These processes deal with the assessment of relative job values, the design and management of pay structures, performance management, paying for performance, competence or skill (contingent pay), the provision of employee benefits and pensions, and management of reward procedure. Employers and mangers should pay attention to their employees and special attention to the best employees. This is done to encourage good performers, to push them to greater heights. Positive recognition for people can ensure a positive and a productive organization. The recognition of outstanding performance aims to create an understanding of what behavior might add significant value to the organization and to promote such behavior. Awards- monetary and non-monetary – should be given based on the achievements and accomplishments of workers. (The Business Research Lab, 2006) But first, let's take a quick look at the primary goals of rewards and recognition. Jack Zigon defines rewards as "_something than increases the frequency of an employee action_" (1998). This definition points to an obvious desired outcome of rewards and recognition: to improve performance. Non-monetary recognition can be very motivating, helping to build feelings of confidence and satisfaction (Keller 1999). Another important goal is increased employee retention. An ASTD report on retention research identified consistent employee recognition as a key factor in retaining top-performing workers. (Jimenez 1999). COMPONENTS OF REWARD SYSTEM

An organization’s reward system compromises three components- Monetary rewards, Non-monetary rewards and psychological satisfaction. Monetary rewards
Monetary rewards are those paid by any negotiable instrument- cash, cheque, money order and direct deposit. It can also be any item that can be readily converted to cash such as savings bonds or gift –cards/certificates. Non-monetary rewards

These can be in the form of meals, trips, plaques, trophies, desk items, cups and mugs, personal items and clothing such as caps, shirts and sweatshirts and other items such as tools, electronics, radios and sports equipments. Psychological satisfaction

This form of reward includes opportunities to perform meaningful work, social interactions with others in the workplace, job training, career advancement opportunities, recognition, employer brand, and a host of similar factors. REWARD SYSTEM

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Performance management is concerned with measuring individuals' effectiveness in their roles, understanding their aspirations and determining which development actions would be most appropriate. Reward management is about understanding individuals' motivating factors, and determining the level of pay, bonus and other rewards they receive. In some organizations the links between the two are...
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