The Major Factors of Reward Systems Essay

Yes, certainly the wages system is a sort of major motivational factor adopted by any organisation for its employees. Human Resource ( HR ) or employees of an organisation are the key to unlock its potencies in the concern environment. Performance direction and wages system should be seeable to employee, actuating them to stand out the public presentation and accomplishing wages while wages system besides necessitate to be designed on the manner that can take to better public presentation.

Linkage of the wages system for the public presentation being shown under the accomplishment of organisation values and civilization is the most phenomenal consequence displayed and have achieved by the employee or organisation. In fact, public presentation linked wages system is a cognitive attack of employee assessment system.

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Background Information

Reward system and the public presentation itself is a obscure subject, under the Human Resource Management ( HRM ) subject which encompasses the Performance Management System ( PMS ) and its supportive Reward Management System ( RMS ) guided or controlled by adopted strategic direction policies and processs.

HRM is a dedicated subdivision of direction subject which helps in Planning, forming, staffing, taking and commanding of Human values and competences required inside organisation to accomplish the set end and nonsubjective. HRM is a sensitive and the nucleus country of direction for pull offing resources called “ people ” inside any sort of organisation that focuses on their hiring/adoption/linkage, development, reappraisal of public presentation, compensation and accomplishment of overall organisational effectivity with its end.

PMS is an country inside HRM which helps puting and steering the public presentation related and achieved value of their employees. Performance is typically an action that an entity shows for its system, where employee shows their dedication through their work for the organisation. PMS handles major of HR tools like measuring their personal competences in work environment and most of the clip concludes with the wages direction. Performance direction helps to find the progressed value in context of set organisation criterions. Performance direction by and large compromises stairss in the signifier of Performance measuring and Performance Appraisal. These both stairss are the nucleus guidelines that drive towards determination doing about the wages and farther Human Resource Development ( HRD ) functions.

In instance of wrongly interpreted set of ends and prosodies being linked under Performance Management system ( PMS ) , it will take to really risky state of affairs among employees and halter their native motive guided by organisation moralss and civilization. PMS largely revolves around the positive procedure for organisation based:



Support and Reward ‘s.

These constituents help ‘s associating up of Organization ends and aims to be achieved by directors through Human Resource Management ( HRM ) , PMS and Reward based system.

Figure: Interlinking of Human resource direction ( HRM ) , Performance direction system ( PMS ) and Reward direction system ( RMS ) in an Organization.

Management compromises assorted subdivisions that plots the organisation nature and handles the co-relation between the subdivisions to accomplish the coveted aim. Performance is at that place to be shown by Peoples, either from lower degree or top degree place to accomplish given set or work which could be clip based or undertaking based. Organization direction portfolio so drives its Hunt for the endowment being displayed, sincereness shown in occupation platform, issue of committedness by their employee and will judge the results in position of the organisation development and counterbalance the Human Resources ( HR ) with the proper wages system.

Reward Management System ( RMS ) is a set of public presentation compensating tools, which usually is handled as the result or over the consequence of Performance Management System ( PMS ) . Reward in simple footings is thought to be strictly fiscal value but it could be something in non-financial facet. In today ‘s direction context with the competition between the organisations, the nucleus patterns and tools implemented by organisation even in the field of public presentation direction and actuating their employees can originate in possible productiveness of their market value.

Major theory

It ‘s necessary for the directors to implement seasonably oriented construct by reevaluating their HR policies and guidelines to pull off the workplace attempt shown by employees. From direction position measuring the employee ‘s public presentation is a long procedure, steering the employee toward the valuable motivation factor.

Each organisation could hold adopted their ain sort of Performance Management System ( PMS ) including few different position of public presentation measuring techniques, supervising guidelines, criterions, describing sets and public presentation measurement techniques. Performance measuring is usually held by haunting following guidelines:

Procedure betterment

Employee Involvement


Forward looking


Committedness from Management.

The chief subject behind enrolling of all these mentioned subjects is to accept the dedication and the human competences shown by the employee on his/her workplace. Performance is by and large calculated through Appraisal procedure.

Appraisal procedure is the rating of an employee current and past public presentation compared to the organisation set of criterions. This is besides known as the employee rating in footings of Quality, Quantity, Cost and clip. Many modern organisations have the procedure of measuring utilizing public presentation, attitude and cognition gained. Normally, depending upon the type of concern, appraisal procedure can be done on quarterly, semiannual or annual footing. Even direction requires the clip spread to mensurate the employee public presentation and ciphering the difference. This deliberate value usually leads toward wagess with feedbacks about public presentation noticed. Appraisal procedure largely concentrates on the Job description based set of mensurating standards.

Frequently used assessment methods among assorted organisations are listed below,

Graphic evaluation graduated table method

Alternation ranking method

Paired comparing method

Forced distribution method

High-performance penetration

Critical Incident method

Narrative signifiers

Behaviourally anchored Rating Scales ( BARS )

Management by Objectives ( MBO ) etc.

Having done with the measuring procedure the concluding marker or value for each employee is processed for the wages. Mostly these will be in the signifier of fiscal value but there are few more things that can be rewarded to an employee for his/her public presentation.

Reward fundamentally is a positive value provided by the organisation to the employee appreciating their work against the set of criterions employed by the organisation leader and directors. As talked before most of the psychological reading of wages will be toward the fiscal addition, but organisation has batch of things to offer to their employees and steer them to their motivation for organisation value.

From some of the web based research it has besides been seen that the employee of an organisation is willing for ‘3R ‘ ( Recognition, Reward, Remuneration ) objective. These all values are types of wages itself and taking the manner to accomplish their motive. Another, survey has claimed that wages must be valued with appropriate return, seasonably or periodic rating and immediate response to the work public presentation noted by organisation and supplying them with 360degree feedback.

Traveling along the wages context, some of the wagess can be even compulsory and optional depending on the sum and type with organisational situational impact. Reward may be touchable or intangible, pecuniary or non-monetary, public presentation based or acknowledgment based and even capablenesss based or policy based. With the organisational point of view even the employee ain attempt guide them toward the periodic tallness in direction degree and having the wages. Reward is at that place for employee with positive public presentation, employee having negative productiveness may even be rewarded with organisation based preparation and development range.

Figure: employee attempt bring forthing Reward and valuable motive.

An organisation with clip oriented direction rules and Human Resource ( HR ) based scheme will be concentrating on following positive subject based qualities for the acceptance of wages system in their organisation.

Organizational effectivity betterment.

Turning Organizational civilization.

Accomplishment of Integration.

Education and professional making of employee.

Supportive Management Control.

Bettering accomplishments and Team work.

Motivating the employees.

Manageable and governable quality of Work.

Employee dedication and induction.

Employee senior status

Job troubles and set of work.

Job based Research portfolio.

Company ain benefit

Corporate bargaining etc.

These qualitative attacks of wages system are mutable and implementable on any organisation, which has subject of turning along the employee motive. Major of them are non holding fixed standards or no standard standards. Many organisations even are accommodating the situational or contingent pattern affected by direction environment. Along with above mentioned qualities following nucleus qualities are ever expected from wages system.

Organizational cost effectivity.

Employee improvement and development.

Competitive and applaudable motivation.

Acceptable to employee.

Guided by Organization criterion.

Based on Performance measured.

Continuous betterment etc.

Reward system possessing above qualities and values does steer the organisational directors and leaders for motivational support to their employees. Reward systems as idea can be different in assorted organisations depending on their schemes and policies. With the huge agreeable sphere of wages types the survey focuses on the following 3 types mentioned.

Intrinsic/Extrinsic wages.

Financial/Non-Financial wages.

Performance-based/Membership based wages.

Intrinsic wagess are originated from the employee Job place or through employee public presentation. Basically, this is termed as native wages to employee. Where employee major public presentation on the occupation function is evaluated and rewarded. This class of wages does non necessitate to be sporadically but need to be admired on the clip itself by employee for accomplishment and growing. Some writer has besides termed this type as self-reward type or Informal wages given for add-on to employee morale, motive and dignity. For illustration:

Accomplished professional profile with feedback.

Assortment of Job performed.

Self-believe and value add-on to organisation.

Recognition for the place.

Learning and Turning morale.

Self determination and induction taking ability etc.

Other types of wagess are extrinsic or non-native to employee such as the money based reward, publicity on duty/level etc. Extrinsic wagess are at that place because of the employee public presentation but is valued and provided based on the organisation degree and schemes. Largely, organisation directors and the immediate supervisor have concluding determination taking ability for such wages. In this class, employee public presentation measuring and appraisal feedback are the most of import determination devising factor.

Frequently, this class is periodic based from organisation position and may comes one time or twice in the twelvemonth. Certain direction environment based factors ( PEST- Political, economical, societal and proficient ) can play negative function on clip. Such as, organisation budgeting job, traveling of state in recession, transportation of employee into new section or subdivisions etc can make job on set honoring standard being planned. Out of provided 3 types of wages last two falls under extrinsic class.

Financial reward a type of extrinsic wages is the most frequently used wages type in all sort of organisation. Monetary value has been cardinal actuating factor even for employee. There is even the psychological base among the working people to take the wages on the pecuniary graduated table. Some of the wagess of fiscal types are listed below:

Percentage addition in Base wage.

Growth in organisation degree impacting the wage.

Issue of Company portions.

Company fillip.

Paid holiday ( single/family ) /sick leave.

Discount and Membership with Organization clients.

Pension programs.

Extra wage for specific accomplishment etc.

Fiscal wagess are straight linked with the employee fiscal net incomes. These wagess are besides determined after rating of the Performance against the criterion set by the organisation. Further, we can state fiscal wages is itself a sort of public presentation based wages. Measurement and appraisal done for public presentation checking and rating is the key to assist the direction leaders to do determination on honoring their employee with fiscal benefits as a mean to actuate them. Even this class of wages has influences with external environment and besides may non be exact periodic in nature.

Related to fiscal there is even non-financial wages type from organisation to their employee. Non-financial wages is at that place to back up employee acknowledgment on the undertaking being performed and adding the definite motivation to employee themselves. This wages makes employee life in organisation more attractive. Some of the illustrations of non-financial wages types are listed below:

Chosen tiffin clip.

Agreeable leave twenty-four hours from employee leave calendar.

Allotting of vehicle parking infinite.

Company concern cards.

Free newspaper, telephones and electricity.

Allotment of company Quarter for life.

Allotment of individual room for occupation.

Transport installation.

Having ain Secretary.

Issue of Business rubrics.

Recognition from organisation clients and utilizing their benefit etc.

Non-financial wages is even a public presentation based choice for wages. This wages class could be governed or restricted by the organisation HR policies and schemes adopted. Largely, non fiscal wages is commenced together with fiscal wages or in add-on to fiscal wages.

In similar fiscal wages class there is public presentation based and rank based reward type. It ‘s been clear that every wages either fiscal or non fiscal is based on the public presentation check-out procedure. Normally, public presentation based is fiscal and sometime added through non fiscal agencies. Performance based wages is at that place for employee who has achieved the coveted public presentation through their work and end product as of organisation desire.

Many international organisations have the public presentation based wages linked straight to the occupation place or deriving the occupation place. In the section like Gross saless and Marketing inside organisation this class of wages is frequently based on the committee per piece of sold points or linked members. In other section apart from this the public presentation goes on long period such as public presentation being reviewed one time or twice in twelvemonth. Some of the illustrations of public presentation based wages program are listed below:

Commission based piecework

Incentive programs

Training and development.

Group / section fillip etc.

Another class under non fiscal wages type is rank based reward. This type of wages includes usually cost of life disbursals. Such as benefit and salary growing per group status, holding rank in group or among member, squad certificates with future potency, Labour market accommodation, sharing of net income, payment for hr non worked, occupation security etc.

Organization point of view

United Kingdom ( UK ) based Organization named Comet ( we live electrical ) is being researched for the public presentation linked wages system under the IT-Sales helper position.

Comet is one of the quickly turning electrical points selling company in UK and is turning worldwide. The subject to take this company is for the best manageable tactics and concerns with the clip based wages and acknowledgment this company is being accomplishing in day-to-day used electrical merchandises. Operating as portion of KESA electrical the company is runing on around 12 states. Company chief concern is focused on family supplies of electrical merchandises and their services to the clients. Comet has adopted the trading rules for best monetary value, best pick and best service.

IT-Sales adjunct occupation profile is to help the client in taking the merchandises and exposing them by explicating the guidelines, utilizing manner, updated information, value concern etc. Along with assisting the client taking the merchandise and supplying them full inside informations of the merchandises the occupation major undertaking is to execute sale and acquire committee based reward per point being sold. This scheme can be different in selling market once more based on the merchandise value itself, experience of the helper in occupation profile, group or squad based incentive allotment etc.

Associating the public presentation in sale to honor is disputing and diversified field. Gross saless helper have to concentrate each client with their demand and value of purchase they can afford. The personal attractive force to clients, communicating performed, merchandise cognition, effectual clip pull offing pattern for each client, executing under group subject and supervising etc. , makes this function more attractive and professional in concern.

The successful carrying of this function is usually fiscal value but even the positive additions are prestige in squad, degree accomplishment in group, fiscal addition as committee and wage for sale, having merchandise itself from company side, advancement toward more preparation and development are the most common accomplishment that helper can comprehend.

Productivity concerns

Performance leads to motive and eventually to the productiveness from employee. Accurate measuring and assessment for cardinal accomplishments and show on the occupation facet is really rigorous affair to steer the employee to the complete occupation satisfaction. Traveling along assorted organisation plans the company itself need to plan and implement the employee for acquiring their high ideas and difficult work for company value.


Peoples or HR of the organisations is the most valuable plus and the procedure being implemented for their growing and promotion with accomplishment, enterprise, dedication and growing are worthy a signifier of wages. Organization should see wages as the actuating factor to their employee instead than a fiscal load.

Comet as the entity for electrical merchandise has been in successful stairss toward accomplishing the better direction show. Employee direction or Human Resource direction ( HRM ) focused portfolio is the 1 of cardinal figure to organisation, and the company seems to look up to it.

Reward direction in organisation non merely will assist the fight among employee but besides guides the organisation civilization along the adaptation of seasonably changed and context direction schemes.


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