Rewards System by William Tay

Topics: Motivation, Reward system, Employment Pages: 8 (2819 words) Published: April 13, 2013
| Table of Contents | Page |
1| Introduction: Why are rewards systems important?| |
2| Extrinsic rewards| |
3| Extrinsic rewards: Financial rewards| |
4| Extrinsic rewards: Non financial rewards | |
5| Non financial rewards: Recognition and Appreciation| | 6| Extrinsic Rewards Case Study| |
7| Intrinsic rewards | |
8| The four senses of intrinsic rewards| |
9| How can organization provide intrinsic rewards to employees?| | 10| Intrinsic Rewards Case Study| |
11| Conclusion| |
12| Reference| |

Introduction: Why are rewards systems important?
Rewards system is the reward given by the organization to its employees. Employees play a key role in each and every organization. In order for any organization to succeed with employees working effectively and efficiently with maximum effort, organization needs to consider the use of different strategic reward systems for different types of employees. Therefore, it is the responsibility of a organization to find out what is important for the employees and thus aligning organizational goals and employee goals. A well planned rewards system will have a great impact on the success of a organization and will affect each workers performance positively. Rewards system is mainly required to fulfill the aims and goals of an organization. Importance of rewards system to the organization

Rewards system is needed to improve and maintain organizational effectiveness in terms of achieving organizational goals and strategies and maintaining a competitive advantage. Rewards system is plays a key role in competing in the labour market, as organizations need to attract and retain highly skilled workers. Rewards system also help organizations to be more manageable and controllable, and reduce administrative burdens of the personal department thus it becomes easily manageable and controllable so that the policies can be implemented consistently. Anon

Importance of rewards system to the employee
If the organization provides the employee with the right rewards and motivation, the employee will have a sense of commitment towards the organization, and will tend to retain in the organization. Rewarding employees will also keep employees motivated to perform well. Rewards systems also help achieve integration among employees, and maintain a sense of fairness and equity with rewarding employees according to their contribution and effort to the organization. Rewards system also helps develop team working and improve cooperation and effective team working at all levels. It may also improve skills and quality of employees as rewards system helps in raising competence and encourage personal development of the employee to achieve high quality performance. Anon

Types of Reward System: Extrinsic and Intrinsic Rewards
Rewards system provides a special payment to employees that is distinct from the general payment such as annual salaries which fixed payment is based on a regular basis. Rewards system is usually given as additional payment related to performance or job skill. The types of rewards can generally be classified as extrinsic and intrinsic rewards. Extrinsic rewards

Extrinsic rewards are tangible rewards awarded to employees by someone else. These rewards are referred to as extrinsic because they are external to the work itself and other people control their size and whether or not they are granted. This is in contrast to intrinsic rewards where it is more towards psychological rewards that employees get from doing meaningful work and performing it well. In the past, extrinsic rewards played a key role in organizations, when work was generally more bureaucratic, and when complying with rules and procedures was paramount. Work in the past offered workers few intrinsic rewards, so that...

Armstrong, M. (2001). A handbook of human resource management practice. Kogan Page.
Bowey, A. M. & Thorpe, R. (1986). Payment system & productivity. The Macmillan press.
Beardwell, I. & Holden, L. (1997). Human resource management : A contemporary perspective.
Steers, R. M. & Porter, L. W. (1991). Motivation and work behavior. Fifth edition.
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