A reward system is an imperative feature of any organization. Majority of the organizations here and abroad practice a reward system specific to their employee’s needs and desires which fundamentally is also based on organization’s goals and mission. Rewards system of an organization also directs employee’s actions that generally have the greatest impact on the motivation and performance of individual employees with the proper implementation. Rewards should be clearly associated with improved performance so that the reason behind is clearly established.
This will also prevent other employees in seeing any unequal or unfair treatments and will not be indignant at all or react inappropriately by lowering their performance level. The reward systems can be rooted to the expectancy model of motivation. This served as a basis for managers in deciding what reward system is suitable for their workplace. This has several implications for us managers. As outlined by Nadler and Lawler, it is important to note that managers should keenly observe employees with their reactions in different situations or ask them of the rewards they desire.
In this way, you will find out what type of reward is being valued by your staff. Simultaneously, you should also settle on what performance you
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This may include: monetary incentives; financial incentives such as pension plans with early vesting, company shareholding, company contributions to further education, car or home loans; while non-monetary incentives would include extra vacation days, leaves, flextime management, written commendations and others. The reward system has a lot of advantages both for the employee group and the organization as well. Positive reinforcement such as the reward system increases the chance or consequences of performance/behavior repetition that will surely uplift an organization’s general performance.
It also uplifts an employee’s self-esteem that will surely reflect in their performance. With this system, work behaviors are actually learned and workers perform the jobs given to them efficiently—each performance better than their previous one until they gain mastery and expertise. With the employee group performing at their best most of the time increased self-esteem, personal goals are achieved as well as organizational goals. There will be job satisfaction, lower labor turnover and increased likelihood of being recognized in the business (Wellins et al, 2004). However, with the advantages also come the disadvantages.
Internal conflicts within the workplace may arise as management recognizes and rewards an individual from a workgroup. Seniority-based rewards may also dissatisfy an employee that is why it is safer to link rewards with performance objectively to maintain the motivation level. Unfair treatment issues may be brought up. This can be addressed by managers like us in an appropriate manner. For one, managers need to recognize our own strengths and weaknesses before we could actually instill behavior modification to others. We should also be critical in decision-making so as not to create disharmony in the workplace.
Managers should be visible and stay within reach of the employees to be able to remedy problems that will arise so as no to complicate the matter. We should also recognize that needs are unique to individuals. Understanding those individual needs will help in discerning what motivation to implement and what reward is to be given to them. A suitably implemented system of rewards can provide incentive for quality workmanship and staff performance. Similarly, a poorly implemented reward system can lead to low morale, low productivity, and even lead to a higher percentage of staff turnover.
A reward system is successful when the staff interprets its policies as fair, stable, and significant. In an article by Schneider and Bowen (1995), they pointed out that there are four ways in which organizations fail to use such system effectively. The first idea is that most organizations fail because of the inability to use the full range of available rewards. Second, organizations tend to forget the utilization of “intrinsic reward”. They fail to remind employees of such idea like if a client leaves with a smile on their face, it should also be enough motivation to do better.
Third, organizations also fail to use rewards to bring about service quality. Employees are more often than not mislead of the true goal of such system. And lastly, organizations fail to manage reward systems effectively. As previously discussed, rewards may either be uneven or unfair for the employees in an organization. Our company also practices reward system. For years, our employees have enjoyed rewards in different forms our management disseminates as a way of thanking them and telling them to continue a job well done.
Although money is the most obvious tool in rewarding employees, non-monetary compensations are also available. That is why, beyond monetary recognition, we recognize our employees’ performance through monthly awarding ceremonies. Each month we recognize employees in different departments for a job-well done basing at their attendance, work efficiency and skills. Performance rate through a chart or graph posted in our bulletin board that shows department performance is also done in our company. Socializations, simple gatherings and tributes are also done.
Annual increase in compensation based on performance appraisal rated by managers is also given to our employees to motivate them all the more. Promotions are also given to qualified and deserving employees based on their rendered performance. Even with the reality that promotions in a company set-up can be filled with issues of unfair selection and all that, our company attempts to be fair at all times by basing our promotions on merit and basically not on favoritism or connection with the higher officials in an organization.
In years, our reward system has proven to be beneficial to our organization. Our employees are motivated, driven and empowered to do better or achieve what others have achieved through better work performance. Only, this system also creates interpersonal and intrapersonal conflicts. Employees who are not rewarded or who are deserving of rewards but has been missed out tend to be resentful. That is why as HR professionals, we have to make sure that conflicts are managed properly and attended immediately.
Discrimination issues on promotion such as underrepresentation of female and minority groups in upper-level management should be lessened if not totally avoided. In our company, the reward system is also implemented along with a “punishment” system. As reward system is aimed at increasing the workforce motivational level for better performance, the punishment system try to correct inappropriate behavior though instilling negative consequences. The former system seemed to be more beneficial and more highly-appreciated in our organization. It proves to be more effective and more humane.
The latter creates more conflicts and only lowers productivity the more especially if not properly decided upon. Although, punishment through disciplinary actions is still being used at present times through due process, written warnings and memos, reward system is highly recommended in our organization and should be implemented more often than not. In my observation, our reward system for a long time now has been individually-based. That is, our organization gives special credits to employees who have proven and maintained higher level of work performance than the rest.
As mentioned, this has created conflicts in the past—one employee feeling superior over another or one employee feeling inferior of somebody when in fact it is not being clearly emphasized that there is nothing wrong with the latter performance only, some has to be recognized. In this term, it is important that we try to modify our reward system further. It, perhaps, will not be difficult at all to also train managers to reward employees based on team efforts more often.
Group reward system is said to be a complicated process if not well-planned. This is because a number of issues may also arise. Like, is it really possible that all members of the group or team participated in the performance? It also involves a number of persons which will make the evaluation of team leaders a little harder. Making our reward system a combination of both – individual-based and team-based will decrease the instances of conflicts and will promote self-esteem to individual employee groups (Gallagher et al, 2000).
Given the scenario, comprehensive assessment of the strengths and backlogs of existing HRM strategies in our company and in the whole region of Middle East in general will provide HRD professionals/practitioners a basis in the formulation or modification of HRD, selection of appropriate intervention, implementation of such interventions in the form of modified policies and finally evaluation of the implemented policies whether it has met the set short-term and long-term objectives (Streumer, et al, 1999).
The utilization of discussed HRM theories as basis for policy and strategy formulation will create scientific-based and learning-based strategies that can be use din the future. Although HR strategies and policies greatly differ from one region to another or from one country to another, they share a common objective which is better work performance of the human resource towards improved organizational performance. HR professionals should bear in mind that implementation of HR strategies should always be attuned with the needs of the employee work group to produce better output for the organization’s goal achievement.
It is important to note that performance is directly related to management motivational techniques and the employee’s ability to perform well. Motivation is a vital key to increase the level of work performance of the employees. This can be done through several means. A common practice is the reward system of an organization. However, if inappropriately executed, this may lead to the reverse of the desired outcome. Reward system should always be evaluated if it meets the desired effects and objectives of the organization.
Indiscriminate rewarding should be carefully taken cared of by the management. In an ever changing society, HRM systems in our region and in our organization should learn to keep up with the rapid change and make good use of it through better HR policy and strategy formulation. Not on list Price (2004)– included Story (1989) – got mixed up/deleted from source Nadler (1970)– included Schneider and Bowen (1995)– include.
References Akdere, M. (2006). Quality management through human resources: An integrated approach to performance improvement. The Business Review, 5(2),133-235.