Words of wisdom
‘Organizations would be far less effective systems than they actually are if economic rewards were the only, or even the principal, means of motivationavailable.’‘There is no such thing as a good pay system; there is only a series of bad ones. Thetrick is to choose the least bad one.’
The Nature of Reward Management
Reward refers to all of the monetary, non-monetary and psychological paymentsthat an organization provides for its employees in exchange for the work theyperform.Reward (or compensation) management is a core facet of the employmentrelationship.An organization can provide two types of reward: extrinsic and intrinsic.
The mix of extrinsic and intrinsic rewards provided by the employer is termed the
, the monetary or economic element of the reward system is termedthe
Why Reward Systems?
The only way employees will fulfill your dream is to share in the dream. Rewardsystems are the mechanisms that make this happen. "However, reward systems aremuch more than just bonus plans and stock options. While they often include bothof these incentives, they can also include awards and other recognition, promotions,reassignment, non-monetary bonuses (e.g., vacations), or a simple thank-you."
"The journey is the reward," says Steve Jobs.
You Get What You Reward
The greatest management principle is that the things that get rewarded get done."You get more of the behavior you reward. You don't get what you hope for, wish foror beg for. You get what you reward."
When your employees do hit the target and meet a stretch standard you set forthem, reward them immediately.Never stall. By doing this, you help employees directly connect the reward withbehavior and higher performance they've attained.
"Fail to reward the rightbehavior and you will most likely get the wrong results.
Strategic Reward Systems
Pay for Performance
Reward Systems consist of the following elements:
Financial Rewards – Compensation
1.Base Salary2.Pay Incentives3.Employee Benefits
1.Intrinsic Rewards – centers on the work itself 2.Praise, recognition, time off and other rewards given to the employee bypeers or superiors.