How Reward Strategy increases Productivity
Reward Strategies
Reward Management is the formulation and implementation of policies and strategies which aims to reward people equitably, consistently and fairly in terms of value to the organization. Reward strategy is designing and implementing reward policies and practising them to support achieving organizational goals effectively in the near future (Armstrong and Murlis, 2003).
Reward System
Strategic Rewards guide to design a Reward System. It is a combination of practices and processes as shown in Fig.01. A Reward System ensures reward management is effectively carried out, the employees and the organization are benefitted. This system commences with the management strategy and which drives to reward strategy. Both financial and non-financial rewards together build total rewards. All components influence performance level (Armstrong, 2014).
Total Rewards
Rewards could be both financial and non-financial. Financial rewards are job-based pays and other incentives. Non-financial rewards are recognition, achievements, appreciations, personal growth etc. Financial and non-financial rewards sum up total rewards. The total reward emphasis all aspects of the value and the experience of the employees. It provides an opportunity to improve the skills and career. Compensation, flexibility, benefits, career development and performance recognition are considered as the key elements to implement total reward (Robert and Coyne, 2020).
Increasing productivity
Appreciating and acknowledging best performance could be done with a simple statement or an expression. An instant phrase can boost productivity rather than waiting for a long to reward. Lawler (1990) argued that a reward system can motivate employees to work effectively satisfying their goals aligned with company goals. Schuster and Zingheim (1992) introduced a reward program to reward both results and behaviour. They mentioned both individual and the team should be rewarded for better productivity. Flannery, Hofrichter and Platten (1996) discussed how rewarding should be aligned with organizational values, culture and goals. The reward strategy design, implement policies and strategies to reward people fairly and equitably. Thus it makes an efficiently operated reward system for an organization to achieve its goals.
Global Context
Over the past years, we observed a growth in innovation in rewarding and wellbeing areas. Many companies around the world used strategies like bonuses, variable pays, stock options and profit-sharing. The pandemic has given us a chance to see rewarding in a different corner. Moving from physical to virtual added new thoughts of finding more relevant rewarding strategies. A CIPD (2021) research revealed 30% of employers concerned about their fairness of reward practices and 25% already taken actions to conduct equal pay audits by March 2021. The 17th annual survey of CIPD (2021) found despite the pandemic most of the employers haven't deducted the rewarding amount. While only 8% spending less on benefits 35% have changed what they are offering as the benefits package. Some benefits are provided by the law. They include Medicare, social security, and unemployment insurance. Organizations have implemented monetary and non-monetary reward policies in order to keep the reward system in place. Monetary reward policies concern the bonuses, allowances and pay hikes. The best practices avoid discriminations against departments and divisions and gender, ethnicity or other identity aspects. Non-monetary rewards are awards, recognition and publicity etc.
Conclusion
Employees need to work in an environment where they feel they are valued and encouraged. They need management to inspire them and recognized their hard work. Spontaneously a recognition will give satisfaction but recognition in public will affect long term results. The right reward will boost employees loyalty and their motivation will enhance productivity and drive the organization towards success. To ensure that right reward designing and implementing reward policies and practices are important.
References
Armstrong, M. (2014) Armstrong's Handbook of Human Resource Management Practice. London: Kogan Page Limited.
Armstrong, M. and Murlis, H. (2003) Reward Management. London: Kogan Page pp. , Available at https://ebookcentral.proquest.com/lib/londonmet/detail.action?docID=4642521.
CIPD (2021) 'Employee Benefits', Reward Management Survey, London: CIPD. Available at https://www.cipd.co.uk/Images/reward-management-fairness_tcm18-91389.pdf (Accessed: 28 April 2021).
CIPD (2021) 'Employee Fairness', Reward Management Survey, London: CIPD. Available at https://www.cipd.co.uk/Images/reward-managent-employee-benefits_tcm18-91393.pdf (Accessed: 29 April 2021).
Flannery, T., Hofrichter, D. and Platten, P. (1996) People, Performance and Pay. New York: Free Press.
Lawler, E. (1990) Strategic Pay. San-Francisco: Jossey-Bass.
Robert, L. and Coyne, E. (2020) Implementing Total Rewards Strategies. Washington: SHRM Foundation, pp 54-55.
Schuster, J. and Zinheim, P.(1992) The New Pay. New York: Lexington books.
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ReplyDeleteThis is true. Reward management can help productivity increasing. From healthy competition to knowing that their hard work will be appreciated, employees are more likely to produce quality work if they know meaningful rewards lie around the corner.
ReplyDeleteGood Article. Morale-Having a reward system in place providing employees with incentives and recognition will boost their morale. By encouraging employees to meet goals and targets will also give them clear focus and purpose which will their morale.
ReplyDeleteThis is another reason why reward systems are important in business organisation
organizational reward system is the major
ReplyDeletenexus in the exchange process between employees and the organization. They pointed
out that this is because employees contribute their time, effort, knowledge, skills,
creativity and energy to the accomplishment of the success of the organization. The
organization, in turn, rewards the employees with both financial and non-financial
compensation
This is really interesting and every employee is expecting rewards from the employers for their services to the organisation.Most of organisations in trice performance measurement methods to use for rewards.
ReplyDeleteThose rewards sometimes may be tangible as well as intangible since as humans we are expecting appreciation from others.
Bonuses, promotions,Month of the employee programs, Insurance schemes. Fuel allowance are some of rewards to the employees.
It is an interesting article. Reward strategies in the workplace should cover four key areas. These are recognition, appreciation, reward and benefits. The reward can be the end goal, but a lot can be said for recognizing when employees have worked hard or brought value to the company.
ReplyDeleteAccording to Ashley Whillan, an associate professor at Harvard Business School, “employees may no longer be incentivized with pure cash”.
Whillan says, “With most of today’s employees, you’re trying to help instill intrinsic motivation, so they feel motivated to put in more effort out of enjoyment for what they do and appreciation for their jobs, rather than feeling extrinsically motivated by cash alone.” These nuances make deploying an effective rewards program challenging for today’s employers.
Yes Apsara, what you have said is true.Many use money as the way to keep people engaged and motivated.They offer annual bonuses and other incentives. There are so-many reasons to say money is not an effective reward, Below mentioned are few.
Delete1. Annual bonuses are any way expected and it comes under company benefits.so there's no value.
2. Employees have to wait till the end of the year and their mid year hard work is not rewarded as the same and it makes them demotivated.
3. A financial bonus may short lived as the expenses are high and has a low impact.
4.It is generally given to everybody and there's no personal recognition.
Alternatively, to assist in increased productivity it’s important to ensure employees are paid competitively, this can be achieved using pay scale data to compare with other industry salaries. Well-paid workers often work harder to ensure they feel like they earn the higher wage, more about pay bench marking can be found here.
ReplyDelete