It observes the strategic purposes of motivating, attracting, and sustaining the employees. Reward management is a critical aspect of Human Resource Management and revolves around development, designing and implementation of appropriate salary system. You must be logged in to post a comment. Contents show. Hire Manpower Outsourcing Services. Leave a Reply Cancel reply You must be logged in to post a comment. Need an account? Click here to sign up. Download Free PDF. Waseem Hameed. A short summary of this paper.
If employees are motivated to perform better, organization performance eventually increases. Strategic rewards systems can be placed to increase employee motivation which leads to increase performances directly effecting the overall organization performance. People in an organization uses reinforcement learning method Armstrong, , p.
Hence, it is necessary for organisations to place strategic reward systems. However, though it sounds easily applicable, below it will be highlighted that it may not be easy to implement reward systems as most of the organisations face challenges and barriers to successfully and effectively implement reward systems Gupta, n. Over engineered rewards systems Rewards not understood by Employees It is a general issue that often employees in organisation have not understood the reward system properly.
It could be intrinsic or either extrinsic rewards that they could obtain or achieve by increasing their performance. It is common that some organisations do not adequately communicate reward programs that is available within an organisation Gupta, n. For instance, Accorhotels has partnered with a third party consultant who provides training and outlining the benefits available in a front desk upselling incentive programme.
It is highly observed that employees who have participated in the training programs are performing better and have accumulate adequate incentives whereas employees who have not participated in trainings have performed low with lower incentives directly effecting the overall revenue generated from the front desk upselling.
If employees are aware the benefits of the program, they are more likely to perform better than employees who does not understand process. Considering such cases, organisations should take a vital step to highlight the process and communicate effectively the benefits employees may have in any rewards programs.
This is a direct motivation for the employee. However, managers play a crucial part in taking necessary steps to ensure such rewards system, processes and policies are communicated well within the organisation though, the willingness and the engagement lies solely within the employee.
Lack of manager trainings Managers are required to communicate reward system to the employees. First, I will introduce some approaches about strategy and reward that can manage reward system in the organization. Second, I will focus on the concepts of motivation and reward, it makes the organization understand more clearly what their employees need. Some definitions about reward management According to Armstrong management is defined that reward management is known as the strategy, policies and procedures necessary to guarantee that the value of people and their contribution for the organization is recognized and rewarded.
It also deals with the design, implementation and maintenance of reward processes and practices aimed at improving the organization, group and individual activities. Therefore, to achieve the commitments and objectives in business, organization should have a developing reward strategy to ensure that what employees contribute for the organization will have a value.
Armstrong, Extrinsic and Intrinsic Reward Intrinsic and extrinsic rewards are different, they are closely associated. Often an extrinsic reward for the recipient will provide intrinsic rewards.
For example, an employee receives a reward in the form of outside salary increases can also experience the complete sense by explaining the wage increase as a sign of a job well done. Extrinsic rewards include all rewards that have a monetary value such as base pay, pay contingent on performance, contribution, competency or skills. Pay related to service, financial recognition schemes and benefit such as pensions, sick pay and health insurance.
They are the core elements in total rewards. With the case of Citi Banks, I think they use reward systems based on financial rewards. Because they pay for leadership with managers and pay for satisfaction of customer with employee, it will make this organization have more profit. But, this reward is not a good one because they do not work and indeed are harmful while intrinsic rewards are good; at least when they provide intrinsic motivation- that is motivation by work itself.
For example, when their competitors pay more than their reward such as have many benefit, profit sharing, or recognition employee if they have high performance, employee will leave their organization. With me, a good reward system should satisfy intrinsic and extrinsic needs for employee.
According to most of these theories, motivation can indeed be predicted and explained. One of these theorists is Maslow , who recognized the theory of the hierarchy needs. At this level, the individual needs are very simple such as people want to satisfy their physiological needs and their security.
At the higher levels of needs, people want to satisfy their relationship, achieve self-esteem and self-actualization. To put it simply, Maslow's work focuses on how an individual's attitudes affect their behavior. This work is called as ERG theory of motivation. In his theory, Alderfer stated that more than one need can be active at the certain time. According to Alderfer, an individual can work on demand growth even if the existence or his relationship needs is not satisfied.
Therefore, this theory is useful for management to realize an appropriate person for the right job with realistic goals to promote high performance. Different with Maslow's theory about motivation, Herzberg said that employees would not be happy with satisfying the needs of their lower need. In other words, having a basic salary or a stable job will not necessarily make employees satisfied with their work. According to Herzberg, the motivation factors are needed to motivate employees to do their work with the best abilities.
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