Designing Effective Reward Policies

 


The task of developing a strategic rewards framework for organizations is usually challenging but necessary to survive in the competitive and changing market place. The process however cannot be copied from the organizations but needs to be designed, developed and grown within the unique environment of the organization (Wilson, 2003). A well-designed incentive program rewards measurable changes in behavior that contribute to clearly defined goals. The challenge in developing such a program lies in determining what rewards are effective agents of change what behaviors can be changed, the cost and benefits of eliciting change (Hartman et al,1994).

Employees should be aware of the relationship between how they perform and the rewards they get. Organizations should apply performance management programs which assist in planning employee performance and monitor performance by effecting proper measuring tools Rewards should be used as a way of strengthening good behavior among employees as well as productivity. Hence reward systems should focus on reinforcing positive behavior. Employees could be rewarded for working overtime, taking initiative, team work, reliability, exceptional attendance, outstanding customer feedback, meeting deadlines or timeliness, productivity etc. Employers and managers should then design or come up with a system to measure or quantify all these aspects so that rewards are then given accordingly.

A good reward system that focuses on rewarding employees and their teams will serve as a driving force for employees to have higher performance hence end up accomplishing the organizational goals and objectives.

Effective reward system of an organization

An effective reward program may have three components: immediate, short-term and long term. This means immediate recognition of a good performance, short- term rewards for performance could be offered monthly or quarterly and long- term rewards are given for showing loyalty over the years (Schoeffler, 2005). Immediate rewards are given to employees repetitively so that they can be aware of their outstanding performance. Immediate rewards include being praised by an immediate supervisor or it could be a tangible reward. Short term rewards are made either monthly or quarterly basis depending on their performance. Examples of such rewards include cash benefits or special gifts for exceptional performance.

Rewarding should not only be applied to individual employees within the organization but also to teams that perform excellently. Incentives given for good behavior usually improve the relationship between the employees and management because employees feel that they are being appreciated for their efforts and good work. This leads to increased employee morale and better customer care as well as increased productivity.

Long-term rewards are awarded to employees who have been performing well. Such an employee will become loyal to his or her organization and it reduces employee turnover. Long term rewards include being made partner, or cash benefits that mature after many years of service or at retirement. These rewards are very strategic for retaining the best human resources.

For rewards to be effective they have to be seen as fair. This means there has to be openness with respect to information about how the reward system operates and how employees will be rewarded. Also, employees should be involved in designing the reward system and its administration.

List of References

Hartman, J. E., Kurtz, M. E., & Moser, K. E. (1994). Washington D.C: National Academy Press.

Schoeffler, B. (2005). Employee Incentive Plans. Make them Worthwhile. Insurance Journal.              Retrieved April 18, 2005, from http://www.insurancejournal.com/magazines/west/2005/04/18/features/54614.html

 

Comments

  1. Manoj ThudawahewaDecember 16, 2021 at 11:23 PM

    Having an effective rewarding system is very effective of managing and driving the team to achieve organizational objective. This will be a valuable concept to sustain the momentum of performance of employees specially achieving quantitative objectives. Very useful topic which need to be discussed. Interesting article.

    ReplyDelete

Post a Comment

Popular posts from this blog

How to Review Organizational Performance Management system

Image
  Performance management is a corporate management tool that helps managers monitor and evaluate employees' work. Performance management's goal is to create an environment where people can perform to the best of their abilities and produce the highest-quality work most efficiently and effectively. (Tardi, 2019) When describe the performance management system there are four parts in there. Those are as below, 1.        Performance planning 2.        Acting 3.        Monitoring 4.        Reviewing Reviewing is the last step of the performance management process. At the end of the year, the management and the employee meet to review the previous year and see if goals were met. This is another opportunity to build collaboration with the employee. The more involved they are in the other stages of the performance management cycle, the more motivation they will have to...
Read more

Weaknesses of Recruitment & Selection Process in Apparel Industry Sri Lanka

Image
  Introduction When describing the apparel industry it encompasses companies that design and sell clothing, footwear and accessories, from basic products, for example, underwear, to a luxury items. Further, it can describe the production of clothes, which was considered to be an art in the prehistoric period, which has undergone several technological changes. The technological innovations have helped apparel manufacturers brand merchandisers and retailers to shift towards a new global reality where customer choice and service are not just the priorities but have the potential to create a difference between success and failure in a highly competitive market. In Sri Lanka, this industry contributes a lot to the national economy and 15% of the workforce is employed in this industry in Sri Lanka. In today this industry become a very competitive industry, not like earlier countries like Bangladesh, Vietnam also operates this industry well in their countries. So, Sri Lanka also has...
Read more

Why does the organization need to develop the employees?

Image
  Employee Development can be described as often referred to as professional development or staff development is the process during which employees, with the support of their employer, go through professional training or pursue learning opportunities to improve heir skills and grow their knowledge and careers. (Valamis, 2021) Employees are very important part to the organization. Talented and skillful employees are valuable assets to the organization. Today modern world most of the businesses believe key factors of the business is employees. ·        When organization has performed employee’s organization able to achieve goals ·        Successful employees pay attention to meet deadlines, build organizational brand via customer interaction and make sales ·         Once employees do not perform effectively organization has to face many problems ·        When e...
Read more