reward system

Topics: Motivation, Reward system, Employment Pages: 5 (2548 words) Published: April 21, 2014
Reward Systems
Once of a manager’s most important tools is the ability to select rewards and time the rewards properly. Even if managers are not solely responsible for financial rewards, they can use a number of tools to increase the effectiveness of their organization. Reward systems can address several important managerial objectives as they relate to employee motivation. A solid reward system requires concerted attention in its development. The following sections provide a basis for a well-contructed reward system. Purposes of Reward Systems

Reward systems serve several purposes in organizations. Effective reward systems help an organization be more competitive, retain key employees, and reduce turnover. Reward systems also can enhance employee motivation and reinforce the image of an organization among key stakeholders or future employees. People are the most important resource for organizational competitiveness, and keeping them on the job is a key task for any manager. Competition to attract and keep the best employees is intense. For people looking for a career opportunity, that’s great news, but as a manager of an organization needing to keep the best and brightest, it is a challenge. It may be even harder in the nonprofit and public sectors where flexibility in providing financial rewards may be more limited than in a commercial context. Retaining employees saves money on retraining costs, improves the consistency of services, and allows for relationships to develop between clients and the organization. In addition, proper rewards systems can reduce absences. Absences cause innumerable headaches for managers. Instructors who don’t show up, too few staff members at busy times, and the lack of a cleanup crew can all increase workplace stress. Absences not only affect the manager but also fellow employees who need to pick up the slack and clients who feel the brunt of too few employees on site. As suggested earlier, understanding who, what, and when to reward can improve employees’ performance. However, the improper use of rewards can have a debilitating effect on employee performance. Managers need to understand their employees’ perceptions of the importance and fairness of the reward and then clearly communicate what needs to be done to receive the reward. Effective use of rewards can encourage employees to gain the skills that are necessary to help them and the organization grow. This can also increase their desire to continue being part of the organization. For example, an organization can pay and provide time off for employees who want to take advanced courses in an area that is valuable for the organization. Some organizations may even provide time off or support to help employees advance their own personal goals or skill sets. Ideally, an organization wants employees who not only show up to work but are excited about being there as well. This passion for work has been referred to as affective commitment. Although research is somewhat preliminary, there is some indication that affective commitment can be strengthened by rewards that enhance employee perceptions of being supported and having control of the work situation. Finally, reward systems can also help with recruiting efforts. Just as happy customers may be the best advertisement for a particular product, happy employees are often a great tool for recruiting new employees and making the organization a workplace of choice. Think about the kind of job you want. Often you will easily be able to identify an organization that stands above the others as a great place to work. As a consequence of this, the organization can attract the best and brightest, creating a virtuous circle whereby it becomes an even more attractive workplace. Hopefully you can see that establishing the right reward structure for an organization is critical to its success. The following sections delve into the details of various reward structures. Types of Rewards

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