Reward direction refers to honor people reasonably, equitably and systematically based on their value to the organisation. The intent of wages system is to back up concern ends and besides to pull, recruit and retain good employees. Compensate and honoring employees is really of import. Fairness, high visibleness and consistence are besides of import. To be just, an employer must non favor one employee over another. Directors should cognize that employee satisfaction is indispensable to advance healthy teamwork and increase productiveness. Directors should seek to happen ways to convey out the strengths in every employee and take a difficult expression for a better manner to utilize their endowments.
The Importance of Reward Management System
Motivated employees are really of import to an organisation ‘s success. It is of import to understand what motivates people and it will assist to convey out the best in people. Motivated employees are more productive and they help organisations to last. Motivation can be achieved through assorted signifiers that include positive support, negative support which is subject and penalty. But possibly, wages system is the major beginning of motive presents. Employees who feel that their work and attempts are appreciated and will be rewarded are extremely motivated.
There are many theories within the field of employee motive. These include McClelland Motivation Theory, Frederick Herzberg ‘s motivation-hygiene theory, Vroom ‘s theory and Douglas McGregor ‘s Theory X and Theory Y. Vroom ‘s theory is based on the belief that employee ‘s attempt will take to effectual public presentation and public presentation will take to certain wagess ( Vroom, 1964 ) . The theory argues an employee will be motivated to execute better when they believed that their public presentation and attempts will take to a wages. Wagess may be either positive or negative. Employee will be extremely motivated if the wages is positive and less likely to be motivated if the wages is negative.
Few conditions that are necessary for employee motive are employees must believe that a good public presentation will take to wagess. For illustration, accomplish of certain ends will take to a fillip. Following, the wagess offered are attractive plenty. Employees may desire different wagess such as publicities or periphery benefits and eventually employees must believe a certain degree of single attempt will take to accomplishing the corporation ‘s criterions of public presentation.
Attraction and Retention
Attraction and keeping of better acting people is non an easy undertaking for an organisation. Organization that offers the most and attractive wagess tend to pull and retain the most employees. The ground is because higher wages degree will automatically increase the satisfaction of employees. In general, that companies that fail to honor their employees tend to hold higher bend over rate.
The Best Manner to Reward Employees
Every organisation needs a strategic wages system that includes these four elements: compensation, benefits, acknowledgment and grasp. The chief job with reward systems in many houses is they frequently miss out one or more component which is normally acknowledgment or grasp
Honoring employee ‘s public presentation is non every bit disputing as honoring specific behaviour. Questions like “ Why am I counterbalancing him/her? ” and “ Which behaviour should be rewarded? ” can assist employers to get the better of this obstructions. For illustration, which employee should we honor, the 1 that came to work early and remaining tardily or the one that came up with new thought that help to finish the work. There is a immense difference between this two. First, a director needs to place which behaviours that is of import to the company. The first thing that comes to the director ‘s head when it comes to honor system is to counterbalance them. It is normal because since non much people are willing to work for free. But an incentive compensation program and some type of long-run wages should be included.
In strategic wages system, another type of wages is benefits. Companies that do non offer attractive benefits than their rivals will hold trouble in pulling and retaining their quality employees. This is the ground an increasing figure of houses are offering attractive benefits.
However, acknowledgment and grasp are both of import and can non be missed out. Persons like to be told whether they are making great or bad, it is better to state and allow them cognize. Recognition means admiting person for specific achievements achieved, actions taken or attitudes exemplified through their behaviour ( Sarvadi, neodymium ) . Acknowledging employees can even be something every bit simple as a “ thank-you ” ( Cadena, 2007 ) . Meanwhile, grasp is to show gratitude to person for their actions ( Sarvadi, neodymium ) . For illustration, directors could direct a “ thank you ” note to how much they value them and their part. The combination of acknowledgment and grasp is another attack to show grasp by praising employee in forepart of the employee ‘s colleagues of what he or she have done that has positively impacted the organisation.
Developing Reward System
Lawler ( 1984 ) laid down a nine-point model for taking strategic function of wages and organisational development. These nine points will be used as a footing for analysing past determinations and puting out future policy. Harmonizing to Lawler ‘s ( 1984 ) model the strategic issues in a wages system includes base of wagess, public presentation and incentivisation, market place, internal versus external comparing, centralized versus de-centralized wages, grade of wage hierarchy, reward mix, procedure issues and reward systems on the effects and integrating. The chief picks upon which base wage are to be used are the occupation the individual does, the personal part they make within a occupation and the degree of accomplishment and cognition that people have within it. The wage will be based on the public presentation of the occupation. Skills and cognition are of import to accommodate to market forces, services and merchandises for organisation. Because of several organisations have used accomplishments based wage to promote and back up wider investing in preparation and development.
Performance assessment is another manner to honor employees. Through public presentation Appraisal directors can place failings and strengths of every employees every bit good as chances for betterment and development. Meanwhile, the assessment consequences are used to place employees that have performed good. This is a just method of which employees should acquire wage additions, fillips or even publicity.
Wagess and Employee Satisfaction
It is non every bit simple as we think to derive employees ‘ satisfaction. It is something that an organisation must larn to manage or pull off: The person ‘s satisfaction with the wagess is closely related to the part of employees towards the organisation and how much they will acquire in return ( Newman, 2009 ) . Employees frequently compare their part to the company or input such as their attempts and public presentation with the wages they received which is the end product such as intrinsic and extrinsic wagess. This will take to satisfaction or dissatisfaction of employees.
Furthermore, employee tends to compare among each other with same occupation and organisation that will besides impact their satisfaction ( Newman, 2009 ) . Employees frequently compare their input or end product ratio with others. Peoples vary well in how they weigh assorted inputs in that comparing. They compare their strong points with others, such as accomplishments and their best public presentation. They besides tend to overestimate their ain abilities and public presentation which is more than the evaluation they receive from their director.
In add-on, misperceive the wagess addition by others may do employees to be dissatisfied ( Newman, 2009 ) . Misperceptions of the public presentation and wagess of others besides occur because organisation that does non clearly stated out accurate information about the salary or public presentation of others will do misperception of wagess of others.
Last, overall satisfaction must non merely depend of either one of the wages ( Newman, 2009 ) . It should be from a mix both intrinsic and extrinsic wages. Intrinsic wagess and extrinsic wagess are both of import in guaranting employees satisfaction. Employees who are good paid for repetitive and deadening work will dissatisfy them because of the deficiency of intrinsic wagess. Where every bit, employees who are paid ill for disputing occupation may be dissatisfied with extrinsic wagess.