Reward Management

Since the Industrial Revolution the approach of HR changed from a pure fiscal approach to a core authority within the business1. Human mental imagery could be considered nowadays as the to the highest degree precious imagery a beau monde holds as it constitutes the link surrounded by the lot and the companys strategy and goals. HR fulfills this role through with(predicate) 4 main activities staffing, reinforcement perplexity, employee break downment and employee maintenance.This paper leave alone focal point on wear back forethought and the challenges the company faces in finding the exceed way to implement a rejoin focusing strategy that suits it. assorted theories and practices exist however the company has to consider the ineluctably and desires of its own citizenry and milieual context in rescript to find the carcass that outper rebound suits the company. Theories and approaches unity way to illustrate the link amidst incompatible HRM activities is t he Fombrun, Tichy and Devanna model. accord to this model, HRM has 4 distinguish activities Selection, Performance, development and proceedss.Even though this model is tell to leaves out the nonion of managements strategical choice, it shows the coherence of internal HRM policies and the importance of matching internal HRM policies and practices to the organizations external business strategy2. showtime John Bratton, Jeffrey Gold (2000), Human resource management hypothesis and practice, secondly edition 1 See appendix I source dung atomic number 18e Moisset, Pierre Toussaint, Jean Plante(2003), La gestion des ressources humaines pour la russite scolaire, presse de luniversit du Qubec 2 John Bratton, Jeffrey Gold (2000), Human resource management theory and practice, Second edition thitherby, it hindquarters be said that takings management is precise closely linked to employee retention, training and development and strategic HRM.And without a clever practice of thes e activities, a pay off management cigargonttenot be successful. Reward management was born because managers had to proceed their employees in order to puree companys objectives. A great deal of the ideology of put to earn is directed at getting men to take hammer naughtily when they know that it is a joke3 . Motivating the staff became a concern as soon as a positive tattle between pauperization and high performance was demonstrated.Motivation is not only employ to achieve a authentic amount of output needed to oblige with companys goals, but besides put in the cogitation of the employees an humane and selfsatisfying aspect. Throughout the last centuries, many studies welcome been made. Some studies cerebrate on what people value as a equal reward, on that pointby how to reward (content theories) and assorteds focuse on the effect of a certain reward system, why implementing this system (process theories). Among content theorist Taylor end be mentioned. For hi m, people were rational and only driven by financial rewards.Then, the Hawthorne studies showed social needfully were as definitive as economic need. Abraham Maslow developed a gain expressing a hierarchy of needs physiologicalsafetybelongingnessesteemself-actualization. Each person stands at a certain level and give need specific motivators. Some other content theories argon motivation factors of Herzberg or Mc Gregors theory. From the simple mood of economic motivator, theories have moved towards the idea of needs. Secondly, process theories of motivation rationalise why a reward system has to be implemented.A first theory, the organisational justice, gives that employees need to perceive the organization as fair. Either through the housedidness of the rewards which atomic number 18 distributed (distributive justice) or through the procedures used to allocate rewards (procedural). The equity theory relies on the idea that individual assess fairness through the resemblan ce with others who are in similar situations. Some also say that employees deportment depends on what they expect to occur. This is the expectancy theory. Employees ask themselves three questions in order to decide how to behave Whats in for me?How hard I have to work to get it? What are the real chances of getting the reward if I do what my boss wants? And finally, the goal- 3 Thompson, A. & Ryan, A. J. (2010) Employee reward in Beardwell, J. & T. Claydon, Human resource management A Contemporary Approach, Harlow Prentice Hall, 6th edition, pp. 490-530. 3 condition theory stipulates employees want to work towards repugn, yet not im executable, goals. Process theories emphasise that behavior is affected by individual differences, experiences and features of the organization.Employees evaluate the rewards obtainable for behaving in a certain manner and act consequently. However, people do not always behave consciously and when they behave in a certain way, they whitethorn not b e aware of the behavioral options. Practically, there are two steps in the development of a reward management strategy. First, there is evaluation of capacities, position and potentiality of the individual. Then, focus is set on the earnings. This can be monetary or not. Employees surveys are used to develop HR policies and practices.Through those surveys, it has been found that pay is only one of a number of factors that motivates staff, and may not always be the most of the essence(p) one. 4 The monetary reward system is simply delimit as the salary increase which can be considerd by different available systems ( salary by result, performance related pay, financial participation) whereas the non-monetary cause refers to the motivation and gratification of the employee. This is done through a psychological castrate based on the concept of mutual understanding of obligations and promises made between worker and employer.There are two different types of psychological issues tr ansactional, based on the monetary aspect and relational, rather based on people. This shows the importance of the environment in which people work. A smashing reward management system is able to attract, maintain and motivate people to work for the company5. 4 Armstrong M. , Thompson P. , Brown D. and Cotton C. (2006), Reward Management, Symposium Report, ereward and Chartered Institute of Personnel and Development, February 5 Henry L. Tosi and Massimo Pilati (2008),People management in Compertamento organizzativo, Egea basepay contingency pay (for performnace, competences or contribution) variable pay (cashbonus) share ownership realizes non finanlcial rewards financial reward arising form the wprk itself and environment recognition and responsability meaningfull work autonomy opportunity to use and develop skills carreer opportinities quality of working conduct work life balance COMPONENTS OF aggregate REWARD Source Michael Amstrong, Helen Murlis, Reward manageme nt a handbook of remuneration strategy and practice, Hay Group, 5th editionThe main problem of reward management is that both the evaluation and remuneration process are dependent from merchandise forces (comparisons, competition, unions, types of regime) and from internal management forces. The variation of the pay system can then cause a state of compression or dispersion of the employees which is translated in homogeneous or diversified payments within the company. These systems have both benefits and costs. As we have seen, reward management systems can be characterized by different approaches and theories.However, there is a trend towards transparency and homogenization and some key factors are repeated balance between pay and benefits, work life balance, individual growth and development, and positive body of work. These can now be detect in some important companies such as Yorshire Water, Severen Trent Water and coney Legal Expases. Nevertheless, the theories and approac hes are not always used in practice. This was overdue to a pause between evidence and practice, known as the knowing-doing gap. It has been shown that although theoretical reward strategies exist, business do not have plentiful time to implement them6 .Reward case In our specific case we can observe how Yorkshire Water, Severn Trent Water, Yahoo Europe, DAS Legal Expenses, Carlson Wagonlit and Isotron, who were not using the 6 Jean Moisset, Pierre Toussaint, Jean Plante(2003), La gestion des ressources humaines pour la russite scolaire, presse de luniversit du Qubec 5 appropriate reward system, changed their systems. They tried to adapt to their employees and give them the rectify motivational factor to work for the company. In to each one company there are some elements that were not taken into friendliness.So, for an strong strategy the enterprises should analyze their environment and take into consideration all the players that can influence or that can be an obstacle to i mplement the right payment. Some of these can be unions, external factors, employee conditions, health and security, motivation, competences and retiring. Only later a broad vision of needs and conditions, companies can set up the right payment system. Ideally, it should also be flexible so that it can be modified tally to the business development and environmental changes7.Wal-Mart Wal-Mart is listed as one of the worse companies to work for. As we can see from different sources8, it has a very(prenominal) poor view of its employees and they have several problems when it comes to recognize them. Their reward system doesnt take into consideration the motives and needs of its people. There is no link between performance and compensation. The company doesnt wear the attract, maintain and motivate people to work for the company9 policy. We also note discrimination, favoritism, no respect for the individuals and their private life in Wal-Marts work conditions.The key factors of rew ard management balance between pay and benefits, work life balance, individual growth and development, and positive workplace are absent in Wal-Mart. All of these observations have a direct disturb on the company. Previous employees organized a protest against the expansion of the company in New York, and attest of the bad work conditions in shops. repayable also to a high turnover people dont want to work under these conditions and the lack of communication acquires to short depot relationship between the shop managers and employees.Wal-Mart employees are not integrated in the company, they dont ascertain like they belong to it and it hinders goal achievement. From a theoretical perspective, Wal-Marts reward system doesnt match uncomplete Taylor theory (the pay is not high enough), nor Hawthornes, (it doesnt take into consideration the 7 Gilman, M. W. (2009) Reward management, in Redman, T. Wilkinson, A. , Contemporary Human Resource Management. London Prentice Hall, 3rd edi tion, pp. 170-172 8 See Appendix II Glassdoor , Wal-Mart salaries, , (30 November 2011) and Aling, channel of NYJWJ, Walmart workers speak out about busive th working conditions, , (19 February 2011) 9 Henry L. Tosi and Massimo Pilati (2008),People management in Compertamento organizzativo, Egea 6 social needs of the employees), nor Maslows pyramid, (basic needs, safety, belongingness, esteem and self-actualization are missing), nor Herzbergs, (there is no the motivational aspect). To redesign this reward system, we propose one that is based on payment by result, where employees are rewarded according to worked hours.Workers will thereby perceive the company as fair, and Wal-Mart will keep its policy of as low wages as possible, both sides will be satisfied. As monetary reward is not really the most important kind, non-monetary compensations should also be used. There should be an emphasis workforces needs by implementing a decent health care visualise. Paying attention to their ph ysiological needs, social esteem, self-fulfillment, incident of growth, will answer their expectation and sterilize them do their best and work at their highest potential (the expectancy theory).Thus, the strategic goals of the company would be much easily reached. Instating a corporate culture would be other testimony it will create a togetherness spirit and will ensure that the employees work in line with the companys vision. The firm is also advance to ask for feedback from its staff, so it will identify the most important problems and tense solving them. Moreover, applying the goal-setting theory could increase employees motivation. Wal-Mart can determine some challenging goals with reward given on achievement, employee of the month or special prizes for instance.As faraway as the equal treatment of the employees in terms of reward is concerned, there has to be a difference of pay between different types of employees according to differences in terms of work and responsi bilities. Those with more responsibilities could be given supererogatory perks for example. By doing so, Wal-Mart will have a better workplace environment, smother the negative impacts that we stated above, and enhance the commitment of its employees to the firm. Conclusion In the fast-moving and ever-changing globalized context nowadays, companies face fierce competition and pressures.Reaching strategic goals becomes increasingly challenging. In order to do so, a company needs its people, from top managers to employees to be engaged 7 and productive10. Reward management motivates staff with financial compensations and benefits but in certain contexts, these reveal to be insufficient to oblige talent. Workforce also takes into account the learning and development opportunities and the work environment. Although a good reward management enhances business performance, the Wal-Mart case illustrates that, some companies array a complete lack of reward management and have to neck wi th negative consequences.Reward ManagementManagement and OrganizationAbstract As an organization it is very important for the human resources to control employees, motivate them and ensure productivity. Business owners are searching ways to reduce the costs and maximize quality so it is very important to get the most out of every employee. One way to do this is reward systems. In this paper we are loss to analyze the reward system parameters and discuss about evaluation criteria.Introduction gibe to Burack an fillip or reward may be used to motivate an individual or group. A reward can be any topic that attracts the employee and fuddle them work in joy. ncentive programs are mostly monetary but it may also let in non-monetary rewards such as recognition, training, development and increased pipeline responsibility. The French says that paying can be two ways1. hardened Salary2. Reward linked to performance. Payment is happening one period to another depending on quantity or qua lity of work. The worker are paying(a) according to work completed or items produced. The most important thing about recognise system is to seperate the salary from reward. So rewarding system is needed to pay off employees their performance, and also they will enchance employee motivation in order to make the firm reach its goals. Also rewards emend consistency of services and reduces absences of the employee. Rewards make the firm a great and irresistible place to work, making employees happier and well-trained. Having such employees will also attract customers, can you think of a better advertisement?The Key Features Reward proposes include monetary and non monetary elements. This will be betterto match the needs of the organization and employees. The goals that the reward system is serving to has to be identified. Planning the incentive to be accurate and on time will be the dry land of very succesful rewarding in order to make better workplace and organization. As a mana ger the plans have to setted by communicating the employees and decision making what is the most appropiate reward. Providing monitoring systems such as feedback will lead to succesful and accurate incentive. Rather than the quantity, the quality of the work should be more important for the manager.Designing Reward and Recognition A very good example for recognition may be the employee of the month frame at businesses. It is a psychological reward that seperates the employee from its peers by the work he/she has done. Also as we have said before rewards can be tangible. It is very important for the firm to do effective rewarding system so that none of the employees will feel bad or useless for the organization. There are some all important(p) factors for the rewarding system The rewards must be observable for all of the employees. So that everyone will be sure that the rewarding system is made fairly.The reward system needs to have realistic standarts that make the employees satis fied. The rewarding plan has to be clear and standartized to make sure that all the members can calculate the reward they will get for a certain effort. The standards of the reward plan has to be set high but realistic, specific, satisfying and effective. Standard is a plan that should not be changed is no necessary situations because it is a contract between firm and the employee. The rewards should be given oftenly to encourage high performance.Types of Rewards1. pecuniary Rewards Monetary reward is the large raise or bonus payment that company is willing to give to the employee in order to motivate the concern performance and meeting certain objectives. These bonus payments may be quick-motivators for the company. serious payments, incentives will make employees challange themselves but setting too much requirements will make the reward ignored. Also profit sharing will lead the employees to contribute more to achieve the profit goals of the company. Stock optionsbecome common in these recent years, this gives employees the right to buy limited number for a fixed price. This option is a long-term motivator for the organization. Some benefit package may be given to employee such as insurance, good retirement, company gifts, meals, entertainment, flexible working hours, housing etc.2. Non-Monetary Rewards Reputation and recognition is very important for a person to feel important and valued. The company should make it clear for the employees that good performance will be recognized. Some examples may be writing employee thank note, bigger desk, gift cards, personalized coffee tree mugs, games room, gym, child care, impressive job title, own visiting cards, own deposit etc. Also some informal incentives may be divergence early or coming late etc. Individuals are interest in getting others attention and increasing reputation.Conclusion As Herzberg and Maslow states The physiological and psychological needs and desires of employees must be met and maintai ned to keep them motivated. So it is important to satisfy the employees in order to keep getting tasks done and achieving goals. some(prenominal) internal and external motivators need to be used to keep the employee capable and good performing.