Reward Systems

Topics: Motivation, Reward system, Employment compensation Pages: 32 (11212 words) Published: February 27, 2012

One of important attributes of work organization is the ability to give reward to their members. Pay, promotions, fringe benefits, and status symbols are perhaps the most important rewards. Because these rewards are important, the ways they are distributed have a profound effect on the quality of work life as well as on the effectiveness of organization.

Organization typically rely on reward system to do four things : 1. Motivate employees to perform effectively.
2. Motivate employee to join the organization.
3. Motivate employee to come to work, and
4. Motivate individuals by indicating their position in the organization structure.

There are several principles for setting up an effective reward system in an organization : * Give value to reward system. Employees must have preference for the type of rewards being offered. Many employees prefer cash reward and plaques. Some employees like to see their name in company news letter. Others like the public recognition surrounding award ceremony. * Make the reward system simple to understand. Elaborate procedures for evaluating performance, filling out forms, and review by several levels of management lead to conclusion. The system must be easy to understand if it is to be used effectively. * Lay down performance standards with in the control of the team. * Make the reward system fair and effective.

* Ensure participation in the reward system.
* Involve people in the reward process and empower them to do the needful. Most organizations use different types of rewards. Examples of recognitions and rewards include money, plaques, trophies, certificates/citations, public recognition, official prerequisites, special assignments, parties or celebrations or other meaningful celebrations. The most common are wages or salary, incentive systems,benefits and prerequisites, and awards. For majority of people, the most important rewards for work is the pay they receive. For one thing an effectively planned and administered pay system can improve motivation and performance.

Money may not actually motivate people. Surprisingly, there is no clear evidence that increased earning will necessarily lead to higher performance. A great deal of research has been done on what determines whether an individual will be satisfied with the rewards he or she receives from a situation. The following five conclusions can be reached about what determines satisfactions with rewards.

1. Satisfaction with reward is a function of both how much is received and how much the individual feels should be received. When individuals receive less than they feel they should receive, they are dissatisfied. When they receive more that they should, they tend to feel guilty and uncomfortable.

2. People’s feelings of satisfaction are influenced by comparisons with what happens to others. These comparisons are made both inside and outside the organizations they work in, and are made similar people. Individuals tends to rate their inputs higher than others.

3. In addition to the obvious extrinsic rewards individuals receive (e.g. pay promotion, status symbols), they also may experience internal feelings that are rewarding to them. These include feelings of competence, achievement, personal growth, and self-esteem. the overall job satisfaction of most people is determined both by how they feel about the intrinsic rewards and how they feel about their extrinsic rewards.

4. People differ widely in the rewards they desire and how much important the different rewards are to them. One group feels money is most important, while other group feels interesting work and job content is. Both groups, of course, are able to find examples to support their point of view.

5. Many extrinsic rewards are important and satisfying only because they lead to other rewards, or because of their symbolic value.

Brief about the organization referring :

Our organization ECO-CARE AND AWARE is...
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