EMPLOYEE REWARD MANAGEMENT

Reward management

Employee Reward Management

Introduction

A reward system or reward management is the aspect of HRM in an organisation that deals with the administration of remuneration. Organisations can use two types of rewards for goal achievement: financial and non-financial. Financial rewards refer to compensation with cash value such as salaries, bonus pay, stock options and benefits. Non-financial rewards include recognition, training and psychological characteristics of work (Heery & Noon, 2001 , pp 34-189). A successful reward system can help the organisation to attract and retain the best employees whilst promoting a constructive organizational culture. In this paper we will analyze the case study of reward management system.

Discussion

Attracting and recruiting new employees who are 'right for the job' is one of the key issues of HR. Recruitment has become especially important since the late nineties as the unemployment rate has reduced and the labour market has become tighter. This means greater competition for fewer skilled employees (Bailey, 1998, pp 11-190). The Harding case shows TopTek is keen on recruiting new employees with sales skills as well as technical knowledge. This could prove difficult if they do not have an effective recruitment strategy. Implementing a suitable reward system that is congruent with the organisation's goals and business strategy can be a very valuable recruitment tool.

Rewards can be given in many different forms to attract potential employees. The first and most obvious is monetary bonuses.

Traditionally, incentives given to retain employees were promotions and raises. However, with increasing competition and the changing needs of employees, HR managers were forced to find alternatives for employee retainment. They discovered so-called “soft benefits” were actually less costly and more effective (Withers, 2001, pp 123-37). Companies have found that productivity and/or revenue can increase whilst turnover can be reduced by as much as 50% by simply offering employees a better work/life balance (Withers, 2001, pp 123-37).

Employers can offer workers the options such as extended leave, flexible working hours and even on-site child care facilities. For example, BMC Software offers employees on-site car repairs, a full gym complete with personal trainers, a hair salon, a dry-cleaning service and three cafes offering carry-out meals (Moline, 2001, pp 123-66). Other important rewards can promote professional growth with goal setting teamed with training and mentoring programs. At T-Mobile, a Telecommunications Company, employees set individual goals in line with T-Mobile's corporate goals and obtain bonuses based on their progress (Hirschman, 2003, pp 86-123). Additionally, retention can also be achieved through job satisfaction by intrinsically rewarding employees with better communication, job recognition and feedback (Withers, 2001, pp 123-37). Employees who feel that their work is valued will contribute more energy and dedication to their jobs.

A Corporation's culture determines and reflects the values, beliefs and attitudes of its members. These values and beliefs promote norms that influence employees' behaviours (Heery & Noon, 2001, pp 34-189). Reward systems can influence an organisation's culture by helping to alter the behaviours and attitudes of its members (Kerr & Slocum, 1987, pp ...