Reward Management

Since the Industrial Revolution the approach of HR changed from a pure financial approach to a core function within the byplay1. Human Resource could be considered nowadays as the most cute resource a ac beau monde holds as it constitutes the link amid the tidy sum and the partys strategy and goals. HR fulfills this role through 4 main activities staffing, final recompensement charge, employee development and employee maintenance.This paper exit focus on repay watchfulness and the challenges the company faces in finding the best mien to implement a revenge focus strategy that suits it. Different theories and practices represent however the company has to consider the urgencys and desires of its own deal and purlieual context in ramble to find the arrangement that best suits the company. Theories and approaches unrivaled way to illustrate the link betwixt different HRM activities is the Fombrun, Tichy and Devanna model. According to this model, HRM has 4 key ac tivities Selection, Performance, development and fathers.Even though this model is said to leaves expose the mental picture of centerings strategic choice, it shows the coherence of internal HRM policies and the importance of interconnected internal HRM policies and practices to the organizations external business strategy2. Source joke Bratton, Jeffrey Gold (2000), Human resource instruction conjecture and practice, second mutation 1 See appendix I source jean Moisset, capital of South Dakota Toussaint, Jean Plante(2003), La gestion des ressources humaines pour la russite scolaire, presse de luniversit du Qubec 2 John Bratton, Jeffrey Gold (2000), Human resource circumspection theory and practice, Second edition Thereby, it foundation be said that quit management is truly closely linked to employee retention, training and development and strategic HRM.And without a clever practice of these activities, a takings management stand non be successful. reward manageme nt was born because coachs had to set off their employees in order to reach companys objectives. A great deal of the ideology of proceed is order at acquire men to take realize seriously when they hold out that it is a joke3 . Motivating the staff became a business organization as soon as a irresponsible relation between motivation and amply military operation was demonstrated.Motivation is non only used to fulfil a trusted amount of output needed to align with companys goals, moreover alike put in the model of the employees an humanistic and selfsatisfying aspect. Throughout the last centuries, many studies turn out been made. Some studies focused on what people value as a decent reward, thereby how to reward (content theories) and others focused on the effect of a indisputable reward governance, why implementing this formation ( march theories). Among content theorist Taylor can be mentioned. For him, people were quick-scented and only driven by financial re wards.Then, the Hawthorne studies showed social needs were as historic as economic needs. Abraham Maslow developed a pyramid expressing a hierarchy of needs physiological>safety>belongingness>esteem>self-actualization. Each aboutbody stands at a certain level and result need proper(postnominal) motivators. Some other content theories atomic number 18 motivation factors of Herzberg or Mc Gregors theory. From the simple idea of economic motivator, theories vex moved towards the idea of needs. Secondly, process theories of motivation explain why a reward administration has to be implemented.A first theory, the organizational justice, slip bys that employees need to perceive the organization as fair. each through the deareousness of the rewards which argon distributed (distributive justice) or through the procedures used to divvy up rewards (procedural). The equity theory relies on the idea that soulfulness assess fairness through the comparison with others who ato mic number 18 in similar situations. Some in like manner say that employees behavior depends on what they expect to occur. This is the expectancy theory. Employees ask themselves lead questions in order to decide how to behave Whats in for me?How catchy I have to run for to ingest it? What are the real chances of getting the reward if I do what my boss wants? And finally, the goal- 3 Thompson, A. & Ryan, A. J. (2010) Employee reward in Beardwell, J. & T. Claydon, Human resource management A coetaneous Approach, Harlow Prentice Hall, 6th edition, pp. 490-530. 3 setting theory stipulates employees want to determine towards challenging, yet not impossible, goals. Process theories beneathline that behavior is affected by individual contrasts, experiences and features of the organization.Employees evaluate the rewards obtainable for behaving in a certain mien and act consequently. However, people do not always behave consciously and when they behave in a certain way, they may not be aware of the behavioral options. Practically, there are two steps in the development of a reward management strategy. First, there is evaluation of capacities, sit and potentiality of the individual. Then, focus is set on the wage. This can be pecuniary or not. Employees surveys are used to develop HR policies and practices.Through those surveys, it has been shew that pay is only one of a number of factors that motivates staff, and may not always be the most essential one. 4 The pecuniary reward system is simply defined as the salary ontogenesis which can be calculated by different available systems (payment by result, performance related pay, financial participation) whereas the non-monetary type refers to the motivation and gratification of the employee. This is through with(p) through a psychological contract found on the impression of mutual understanding of obligations and promises made between worker and employer.There are two different types of psychologi cal contracts transactional, based on the monetary aspect and relational, preferably based on people. This shows the importance of the environment in which people work. A good reward management system is able to attract, maintain and motivate people to work for the company5. 4 Armstrong M. , Thompson P. , Brown D. and Cotton C. (2006), return charge, Symposium Report, ereward and Chartered Institute of Personnel and Development, February 5 Henry L. Tosi and Massimo Pilati (2008),People management in Compertamento organizzativo, Egea basepay contingency pay (for performnace, competences or contribution) variable pay (cashbonus) conduct ownership benefits non finanlcial rewards financial reward arising form the wprk itself and environment recognition and responsability meaningfull work autonomy opportunity to use and develop skills carreer opportinities quality of on the stock(p) look work life dimension COMPONENTS OF TOTAL REWARD Source Michael Amstrong, Helen Mur lis, Reward management a handbook of remuneration strategy and practice, Hay Group, fifth editionThe main problem of reward management is that both the evaluation and remuneration process are dependent from market forces (comparisons, competition, unions, types of regime) and from internal management forces. The variate of the pay system can therefore cause a call down of compression or dispersion of the employees which is translated in homogeneous or change payments within the company. These systems have both benefits and costs. As we have seen, reward management systems can be characterized by different approaches and theories.However, there is a mode towards transparency and homogenization and some key factors are repeated balance between pay and benefits, work life balance, individual growth and development, and positive workplace. These can now be observed in some important companies much(prenominal) as Yorshire Water, Severen Trent Water and Das Legal Expases. Nevertheles s, the theories and approaches are not always used in practice. This was due to a gap between evidence and practice, known as the knowing-doing gap. It has been shown that although theoretical reward strategies exist, business do not have enough time to implement them6 .Reward fictitious character In our specific case we can observe how Yorkshire Water, Severn Trent Water, Yahoo Europe, das Legal Expenses, Carlson Wagonlit and Isotron, who were not using the 6 Jean Moisset, Pierre Toussaint, Jean Plante(2003), La gestion des ressources humaines pour la russite scolaire, presse de luniversit du Qubec 5 appropriate reward system, changed their systems. They tried to adapt to their employees and give them the right motivational factor to work for the company. In each company there are some elements that were not taken into consideration.So, for an effective strategy the enterprises should analyze their environment and take into consideration all the players that can influence or that can be an obstacle to implement the right payment. Some of these can be unions, external factors, employee conditions, health and security, motivation, competences and retiring. Only after a broad mess of needs and conditions, companies can set up the right payment system. Ideally, it should also be flexible so that it can be modified fit in to the business development and environmental changes7.Wal-Mart Wal-Mart is listed as one of the worse companies to work for. As we can see from different sources8, it has a very vile view of its employees and they have several problems when it comes to rewarding them. Their reward system doesnt take into consideration the motives and needs of its people. There is no link between performance and compensation. The company doesnt apply the attract, maintain and motivate people to work for the company9 policy. We also note discrimination, favoritism, no look on for the individuals and their private life in Wal-Marts work conditions.The key fac tors of reward management balance between pay and benefits, work life balance, individual growth and development, and positive workplace are absent in Wal-Mart. whole of these observations have a direct impact on the company. Previous employees organize a protest against the expansion of the company in New York, and show of the bad work conditions in keep goings. Due also to a lofty turnover people dont want to work under these conditions and the want of communication leads to short term relationship between the shop managers and employees.Wal-Mart employees are not integrated in the company, they dont ascertain like they belong to it and it hinders goal succeedment. From a theoretical perspective, Wal-Marts reward system doesnt match neither Taylor theory (the pay is not high enough), nor Hawthornes, (it doesnt take into consideration the 7 Gilman, M. W. (2009) Reward management, in Redman, T. Wilkinson, A. , Contemporary Human Resource Management. London Prentice Hall, t ertiary edition, pp. 170-172 8 See Appendix II Glassdoor , Wal-Mart salaries, , (30 November 2011) and Aling, channel of NYJWJ, Walmart workers speak out about busive th working conditions, , (19 February 2011) 9 Henry L. Tosi and Massimo Pilati (2008),People management in Compertamento organizzativo, Egea 6 social needs of the employees), nor Maslows pyramid, (basic needs, safety, belongingness, esteem and self-actualization are missing), nor Herzbergs, (there is no the motivational aspect). To redesign this reward system, we propose one that is based on payment by result, where employees are rewarded according to worked hours.Workers will thereby perceive the company as fair, and Wal-Mart will keep its policy of as low wages as possible, both sides will be satisfied. As monetary reward is not really the most important kind, non-monetary compensations should also be used. There should be an emphasis workforces needs by implementing a decent health care plan. remunerative oversigh t to their physiological needs, social esteem, self-fulfillment, possibility of growth, will answer their scene and install them do their best and work at their highest potential (the expectancy theory).Thus, the strategic goals of the company would be more easily reached. Instating a somatic culture would be another recommendation it will create a togetherness spirit and will en legitimate that the employees work in line with the companys vision. The firm is also encouraged to ask for feedback from its staff, so it will identify the most important problems and try solving them. Moreover, applying the goal-setting theory could plus employees motivation. Wal-Mart can determine some challenging goals with reward given on achievement, employee of the month or special prizes for instance.As far as the equal intercession of the employees in terms of reward is concerned, there has to be a difference of pay between different types of employees according to differences in terms of work and responsibilities. Those with more responsibilities could be given extra perks for example. By doing so, Wal-Mart will have a amend workplace environment, trim back the negative impacts that we stated above, and invoke the commitment of its employees to the firm. Conclusion In the fast-moving and changing globalized context nowadays, companies face impetuous competition and pressures.Reaching strategic goals becomes increasingly challenging. In order to do so, a company needs its people, from top managers to employees to be engaged 7 and reproductive10. Reward management motivates staff with financial compensations and benefits but in certain contexts, these reveal to be insufficient to retain talent. Workforce also takes into fib the learning and development opportunities and the work environment. Although a good reward management enhances business performance, the Wal-Mart case illustrates that, some companies present a complete lack of reward management and have to cope with negative consequences.Reward ManagementManagement and OrganizationAbstract As an organization it is very important for the human resources to have got employees, motivate them and ensure productivity. Business owners are searching ways to reduce the costs and maximize quality so it is very important to get the most out of every employee. One way to do this is reward systems. In this paper we are going to analyze the reward system parameters and discuss about evaluation criteria.Introduction According to Burack an incentive or reward may be used to motivate an individual or group. A reward can be anything that attracts the employee and illuminate them work in joy. ncentive programs are mostly monetary but it may also include non-monetary rewards such as recognition, training, development and increased job responsibility. The French says that paying can be two ways1. Fixed Salary2. Reward linked to performance. compensation is happening one period to another depending on qua ntity or quality of work. The worker are paid according to work spotless or items produced. The most important thing about rewarding system is to seperate the salary from reward. So rewarding system is needed to pay off employees their performance, and also they will enchance employee motivation in order to contact the firm reach its goals. in addition rewards improve consistency of services and reduces absences of the employee. Rewards make the firm a great and attractive place to work, making employees happier and well-trained. Having such employees will also attract customers, can you think of a better advertisement?The Key Features Reward plans include monetary and non monetary elements. This will be betterto match the needs of the organization and employees. The goals that the reward system is serving to has to be identified. Planning the incentive to be accurate and on time will be the basis of very succesful rewarding in order to make better workplace and organization. As a manager the plans have to setted by communicating the employees and deciding what is the most appropiate reward. Providing monitoring systems such as feedback will lead to succesful and accurate incentive. Rather than the quantity, the quality of the work should be more important for the manager.Designing Reward and Recognition A very good example for recognition may be the employee of the month ashes at businesses. It is a psychological reward that seperates the employee from its peers by the work he/she has done. Also as we have said before rewards can be tangible. It is very important for the firm to do effective rewarding system so that none of the employees will feel bad or null for the organization. There are some essential factors for the rewarding system The rewards must(prenominal) be observable for all of the employees. So that everyone will be sure that the rewarding system is made fairly.The reward system needs to have realistic standarts that make the employees sat isfied. The rewarding plan has to be clear and standartized to make sure that all the members can calculate the reward they will get for a certain effort. The standards of the reward plan has to be set high but realistic, specific, satisfying and effective. Standard is a plan that should not be changed is no necessary situations because it is a contract between firm and the employee. The rewards should be given oftenly to encourage high performance.Types of Rewards1. Monetary Rewards Monetary reward is the turgid raise or bonus payment that company is willing to give to the employee in order to motivate the job performance and meeting certain objectives. These bonus payments may be quick-motivators for the company. Good payments, incentives will make employees challange themselves but setting too much requirements will make the reward ignored. Also profit sharing will lead the employees to contribute more to achieve the profit goals of the company. Stock optionsbecome popular in th ese recent years, this gives employees the right to buy limited number for a fixed price. This option is a long-term motivator for the organization. Some benefit package may be given to employee such as insurance, good retirement, company gifts, meals, entertainment, flexible working hours, housing etc.2. Non-Monetary Rewards Reputation and recognition is very important for a psyche to feel important and valued. The company should make it clear for the employees that good performance will be recognized. Some examples may be writing employee thank note, bigger desk, gift cards, personalized coffee mugs, games room, gym, child care, impressive job title, own visiting cards, own secretary etc. Also some informal incentives may be leaving early or flood tide late etc. Individuals are interested in getting others attention and increasing reputation.Conclusion As Herzberg and Maslow states The physiological and psychological needs and desires of employees must be met and maintained to k eep them motivated. So it is important to satisfy the employees in order to keep getting tasks done and achieving goals. Both internal and external motivators need to be used to keep the employee happy and good performing.