Overview of Reward Management

OVERVIEW OF REWARD MANAGEMENT
REWARD MANAGEMENT DEFINED

Reward Management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization. It deals with design, implementation and maintenance of reward processes and practices that are geared to improvement of organizational, team and individual performance.
Create total reward processes that are based on belief about what the organization values and wants to achieve. Reward people for the value they create. Align reward practices with both business goals and employee values; as Duncan Brown emphasizes, the alignment of your reward practices with employee values and needs is every bit as important as alignment with business goals, and critical to the realization
THE AIMS OF REWARD MANAGEMENT
Reward the right things to convey the right message about what is important in terms of expected behaviours and outcomes. Facilitate the attraction and retention of the skilled and competent people the organization needs thus winning the war for talent Help in the process of motivation people and gaining their commitment and engagement; Support the development of a performance culture. Develop a positive employment relationship and psychological contract.
THE AIMS OF REWARD MANAGEMENT
THREE FUNDAMENTAL REASONS TO RECOGNIZE & REWARD EMPLOYEES

By recognizing and rewarding employees, management:
Establishes an equity arrangement, providing employees with a fair return for their efforts. Motivates them to maintain and improve their performance. Clarifies what behaviors and outcomes the company values.
EQUITY: A FAIR DAYS WORK FOR A FAIR DAYS . . . WHAT?

Exchange for helping the manager to reach the goals of the work unit, employees have every right to expect the manager to help them meet their goals.
THREE EQUITY EQUATIONS
EQUATION - 1
What the employee receives from the employer must be equal in value to the quality and quantity of work done by the employee.
EQUATION - 2
What the employee receives from the employer must be equal in value to what is received by other employees doing similar work of similar quality and quantity.
EQUATION - 3
What the employee receives from the employer must be equal in value to what is received by people who do similar work for other organizations.
IS MONEY A MOTIVATOR?
As a motivator, money has three strikes against it: Its impact is short-lived. Most major financial reward come annually, and the effect wears off long before the year is out. A nice bonus or a big raise may inspire a spurt of activity from a grateful employee, but once the bonus spent or living expenses swell to meet the raise (as they always do), the reward and its motivational value become history. What starts out as a reward for exceptional performance tends to become perceived as an entitlement. A bonus or an unusually large raise is special the first time, may be even the second time, but after that the recipient comes to expect it as part of business as usual.
IS MONEY A MOTIVATOR? --continued

When people are paid to do specific tasks, the money tends to supplant intrinsic motivation. People often do extra work for the pure enjoyment of performing the task, the satisfaction of solving a problem, or the excitement of confronting a challenge. But when they know they will get a bonus or incentive compensation of performing this work, they will perceive themselves as doing it for the money rather than for the intrinsic, more sustaining motivation.
IF NOT MONEY THEN WHAT?

People are motivated to fulfill a number of different needs, the most basic being to get a roof over their heads ad food in their mouths. The most lofty need perhaps is to transcend the mundane and reach the highest level of achievement and spirituality (what motivation theorist Abraham Maslow called self-actualization). But what drives people the strongest varies from one individual to another, and for any individual the need may change depending upon the situation. At any given time an individual may be driven primarily by the need for security, socialization, esteem, achievement, or power or some combination of these.
IF NOT MONEY THEN WHAT? --continued

The reward that an employee values most and that provides the greatest incentive to maintain and improve performance will be the one that contributes to the fulfillment of that persons strongest drives. The challenge for the manager is to recognize what each employee is seeking and to identify ways to reward the employee by satisfying that need.
CLARIFICAITON: WHATS REALLY IMPORTANT TO THE COMPANY?

The third major function of recognizing and rewarding employees is clarifying what behaviours and outcomes the organization values most.
SUPPORTING THE VALUES OF THE ORGANIZAITON
THE NEW PAY

Lawlers concept of the new pay was developed by Schuster and Zingheim who described its fundamental

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OVERVIEW OF REWARD MANAGEMENT

REWARD MANAGEMENT DEFINED

THE AIMS OF REWARD MANAGEMENT

THE AIMS OF REWARD MANAGEMENT

THREE FUNDAMENTAL REASONS TO RECOGNIZE & REWARD EMPLOYEES

EQUITY: A FAIR DAYS WORK FOR A FAIR DAYS . . . WHAT?

THREE EQUITY EQUATIONS

IS MONEY A MOTIVATOR? --continued

IF NOT MONEY THEN WHAT?

IF NOT MONEY THEN WHAT? --continued

CLARIFICAITON: WHATS REALLY IMPORTANT TO THE COMPANY?

SUPPORTING THE VALUES OF THE ORGANIZAITON

THE NEW PAY

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