Reward management (RMT) assessment template

Reward management practices – briefing paper

Name: Paraskevi Soumpasi

Word count: 2745

Strategic Analysis
1.1 The context of the reward environment and the key perspectives that inform reward
decisions

It is a common practice for companies and organisations such as Baker’s Department Store to
reward their employees from time to time. The main objective of rewarding employees is to
motivate and encourage them to be committed towards the set organisation’s objectives (Jones &
Perkins, 2020). Rewards often works as incentives which make workers want to work even harder
so that their efforts can be recognized. They can be in different forms including remuneration,
bonuses, promotion and recognition among others. Whenever an employee receives a reward, he
or she gets psyched up and this is the primary reason why organisations and companies make
sure that they reward their employees consistently.

Baker’s Department Store has been implementing a reward policy which has been in place for
several of years. The store mainly rewards the employees who have done exceptionally well in
their duties. But this particular policy is prone to both internal and external risks which can be
current while others will affect the store in the future. Using modern analysis tools, it is possible
to identify the factors that can affect the company’s reward policy either now or in the future.

PESTLE analysis tool discloses the external factors such as:

Competition- Baker’s Department is facing stiff competition from other stores like the Tedd
Baker’s Stores which is giving more innovative rewards that lure some employees from the store.
Therefore, this completion informs the reward system of Baker’s Department Store to invest
more on its reward policy by scaling higher wages to attract and retain the desirable talents and
customers.

Economic performance- The economic performance of Baker’s Department informs its reword
system. When making more profits, the department reward policy is shaped in giving tokens, and
more employee empowerment programs. During low seasons such as high inflations, les profits
are realized and the reward system minimizes the empowerment programs and the number of
tokens dashed out.

Generation change- the change in generation brings change in test and preferences of employees
and customer. This change informs the Reward system of Baker’s Department to set an evolving
system that identify different rewards to the older employees compared to the younger
employees.

Technology- technological change impacts on the reward system of Baker’s Department. The
store is putting in place a reward policy which goes in hand with the latest technologies. This
includes investing in Information communication technology and proper reward data
management of employees

The SWOT analysis tool discloses Internal factors such as:

Number of employees- The department store has been growing steadily and this requires a policy
that can accommodate the rising number of employees. If the number of employee is high, there
will be reasons to come up with a more elaborated reward policy that can accommodate all the
employees and ensure satisfaction.

Automation- The store is automating some of its operations which will require even the reward
policy to be adjusted. Modern systems simplify the entire process especially in checking the
The reward environment at Baker’s Department Store primarily involves the line manager and
the employees. The manager uses the performance report to establish the performance of an
employee over a period of time (Rose, 2018).

Reward decisions at Baker’s Department Store are informed by factors such as the period of
time that an employee has been working in a particular organisation (Nwaozor& Thompson,
2020). At Baker’s Department Store employees spend their entire careers working and need to
be recognized in a special manner. Employees who go out of their ways to accomplish their
duties should also be rewarded by the at Baker’s Department Store.

Another aspect that informs reward decision at the department store is doing extra ordinary
things while at work (White, 2016). These are the employees who will not hesitate to inform
the relevant managers when something is not going well. They can inform on issues such as
theft or a certain form of laxity.

Employees who have shown exceptional leadership qualities are also rewarded by the
companies they work for. These are the workers who will rally and direct others towards
working even harder in their duties. It is important to reward such employees because they can
easily use their leadership qualities to negatively rally the employees into things such as strikes
and revolts (Michael, 2017).
Reward Intelligence
Perkins (2018) defines reward intelligence as the information and data used to make different
reward decisions. This information provides guidelines on the steps to be taken during reward
decision making in organization such as Baker’s Department Store.

1.2 . The most appropriate way of collecting reward intelligence

Methods of collecting reward intelligence may vary depending on the organisation and its size.
Big organisations such as Baker’s Department Store need to put in place more elaborated
methods which will cover the entire company. Because of this, it is important to get more
insight on reward intelligence.
Types of reward intelligence

Direct reward intelligence- This is the intelligence that is obtained directly from the employees
as they go on with their duties. The person collecting the intelligence is able to directly see
what the employees are doing in their workplaces.

Indirect reward intelligence- This is information collected from third parties and documents
related to different employees. The intelligence collector does not need to see or know the
employees being evaluated provided there is data and information regarding the particular
employees.

Ways of gathering and presenting reward intelligence

Feedbacks from employees

Majority of big companies such as Baker’s Department Stores have platforms where employees
can give feedbacks regarding their jobs. The employees are encouraged to talk about almost
anything and this information can be used to establish the employees who deserve to be
rewarded. All the feedbacks are analyzed and then presented to those responsible of selecting
the rewards recipients.
Performance chats
Details regarding the performance and progress of different employees are usually carefully
recorded. These records include things such as if the employees were able to achieve their
periodic targets. Through these records, it is easy to identify the employees who have achieved
their goals and those who have been improving.

Personal Records
Each and every employee is required to present his or her resume while applying for a job at
the department store. The company keeps these resumes and they provide helpful information
while deciding the person to be rewarded. This is especially applicable when dealing with
rewards such as promotions because it easy to tell the qualifications of different employees.

Former employers
Most employees have been employed in a number of organizations and as a result, former
employers have details regarding the employees such the former responsibilities and roles, and
performance track records.

Advantages
 Simple to implement because the information is already compiled
 Can get information from a number of past employers provided the employee has
worked in a number of organizations and access the employee performance track
roads Disadvantage
 The information can be biased especially if the employee did not leave some of the
past jobs in good faith.
 Former employee may be unwilling to disclose performance track record about the
employee
 Some employees might be judged wrongly
Government records
Different government departments keep records about citizens. These departments include
health facilities and the police. The information for the reward intelligence include, the pay
scales, working hours and structure of leaves, and regulations on pensions and compensation
scale. The main sources of government related information include police records which show
criminal records of individuals, government publications which show changes in legislations,
government websites which have information on different operations of the government and
government directorate which shows descriptions of the various departments in the
government.

Advantages

 Provides factual information like the arrest records

 The information can be traced to several years back
Disadvantage
 At times it might take long for the relevant information can be availed.
 The bureaucracy involved can be discarding and most organization may not be willing to
go through the al legal procedures.

Stock market
The stock market is a good source of information on how the economy is performing at a
particular time. To get information from the stock market, one needs to work with stoke
brokers or visit the official London Stock Market website. This website is always updated and it
also keeps records of the past transactions. Financial Experts in organizations such as Baker’s
Department Store can help managers translate the figures on the website. The information
obtained here includes inflation rates, taxes and competitions. Furthermore, the stock market
can also show the behaviour of different people when it comes to financial management. This
means that it is possible to tell the people who are risk takers and those who are more careful
with their finances. The more careful people usually buy stocks that have lower risk and they
tend to buy stocks for long term purposes.

Advantages
 It is open for anyone to see
 It is accurate because it shows factual figures Disadvantage
 Provides general information which needs to be analyzed before final decisions can be
made.
 The information that can be obtained in this process includes the relationship of the
worker with other employees.

Financial institutions
Employees usually take loans and credit from different financial institutions including banks.
These institutions keep records on the financial transactions of the employees and they can
provide insight on how well the employees manage their finances. All what is needed is to
follow the right channels and abide by the Date Protection Act which protects personal
information from being accessed by unauthorized people. Advantages

 The information is accurate and updated

  Possibility to know employees’ sources of income and whether the employees are
corrupt Disadvantages

 Some information is personal and restricted by the Data Protection Act

 Some details might be misleading if not looked keenly since some employees might have
multiple sources of income

Local administrators
The local administrators usually know details regarding people leaving in different communities.
Such people can provide helpful information that will help in knowing the conduct of such
person out of work. The information includes the family life and social lives of the people
concerned. Soe of these administrators have known different people since they were small
children.

Advantage
 Ability to collect factual information from reliable source
 Chances of knowing the history of the people concerned
Disadvantages
 The community leaders can be biased on some issues
 There are chances that the leaders might not be interested in providing the information
Social Media
This is another ideal source of intelligence mainly in the current days where people post
personal information about themselves. The information posted is seen by a lot of people and
this information can be very helpful in making reward decisions. Advantages

 Easy access of information

 It is simple to know the past of the people
Disadvantages
 Some people are not factual in social media
 It can be seen as privacy invasion of the people
Use of reward intelligence in making reward decisions
The reward intelligence collected is used to determine the employees who deserve to be
rewarded. It provides even personal details about each and every employee and this helps in
coming up with the final list of recipients. Without the intelligence, it would be practically
impossible to know the deserving recipients especially in situations where there are many
employees who have qualified to be rewarded. Reward intelligence on performance track
record help in determining the most deserving employees for given rewards. Furthermore,
performance trends enables the management to evaluate the past of the different employees
and determine new openings for them.

Total Reward
2.1 Evaluation of the principle of total rewards and its importance to reward strategy The
principle of total rewards requires the employer to use all the tools at his or her disposal to
motivate, attract and retain employees (Jones & Perkins, 2020).The employees do not
necessarily have to do anything special or exceptional, but they are rewarded just for working
in the particular organisation. This principle is made up of five elements which are; benefits,
compensation, recognition, professional development and work-life balance.

Baker’s Department Store can benefit a lot from a total reward approach considering the
number of people it has employed. The top priorities of the company’s reward policy include
motivating the employees, reducing employees’ turnover and creating harmony in the
workplace. These priorities perfectly fit into the total reward policy since the policy touches
each and every employee working at the store.

One of the things that the department store can expect after applying total reward approach is
employees working with more harmony. When this particular approach is applied, the
employees feel equal to each other depending on their rank in the company. This improves
relations among the employee consequently making them enjoy working for the company.
With total reward approach, there will also be improved productivity considering that all the
employees will be motivated. Employees will not even mind working overtime since they will
take the success of the company as their personal success.
Current mess at Baker’s Department Store
At the moment, the reward policy used at Baker’s Department Store has no room for expansion.
The people who came up with the plan did not consider that the company would grow in size.
Consequently, the current reward policy uses the traditional practices which are static.

The reward policy at Baker’s does not necessarily recognize the employees who are referred to
as non-essential. This means that even the more hardworking casual employees are not
recognized. With such a policy it is easy for the employees to revolt against the policies of the
company.

A specific example of the mistakes Baker’s Department Store is doing in financial reward policy
includes having a reward policy where employees are rewarded once in a year. This does not
create the necessary motivation among employees especially considering that some employees
only work in the store for a few months.

When it comes to non-financial rewards, only the top managers in the store are given housing
allowance therefore making the junior employees feel left out.

Baker’s Department Store needs a comprehensive review of its reward policies and practices
and the Board of Directors want to know how the company should move forward with a more
strategic approach to managing pay and reward.

Among the things that the department store is doing wrong is failing to give equal rewards to
people with equal achievements. This is especially when it comes to non-financial rewards
where some employees are rewarded with bigger rewards. An employee will be promoted to a
higher position despite having achieved the same achievement with the employees who are
not promoted. When it comes to financial rewards, the company has been concentrating more
in giving rewards which are based on the experience of the employees. But this is wrong
because there are younger employees who achieve more despite not being very experienced.
The financial rewards should not be based on experience since the experienced who are not
experienced feel left out.
How Baker’s Department Store can handle the Current mess
The store needs to ensure its new policy has room for growth in different aspects. Such a policy
will be able to accommodate the changes that might happen in the future such as increase in
the number of employees and improvement in technology. The store can achieve this through
reviewing its reward policy periodically. It can be reviewing the policy annually to make sure all
the desired changes have been incorporated.

While implementing total reward approach, the department store should consider the cost. It is
not logical for the store to spend more than it can afford in the implementation of the policy.
Timing should also be done properly where the rewarding should be done when the employees
can appreciate the rewards more. Furthermore, the department store should consider the kind
of rewards to be given to the employees. There are certain rewards that are easier to give out
and they can even be given to teams instead of individuals.

A good example is an organization rewarding some of its employees with vehicles while the
same employees live within walking distance of the company. This will mean that the
employees will only use the cars for personal purses when not at work.

To correct the mistakes on financial rewards at Baker’s the store should make their reward
policy a continuous thing where rewards are given more regularly. The store can also correct
the nonfinancial mistakes by making sure that all the employees are given housing allowance
especially employees who have worked in the store for more than two years. These changes
reduce turnover rates and also help the department attract the top talents.

2.3 How policy initiatives and practices can be implemented

Reward policy initiatives and practices at Baker’s Department Store are implemented carefully
to produce the desired results. There are certain fundamental aspects that require to be
followed while doing the implementation. One of the most important aspects is basing them on
the organisation’s goals. Every reward should be geared towards encouraging the employees to
work harder towards achieving the objectives of the company. It is also important to involve
the employees while implementing the policy initiatives and practices. These are the recipients
of the rewards and as a result, their input is significant.
Rewarding teams is also an important aspect when implementing policy initiatives and
practices. This creates healthy competition where each team works hard to emerge the best.
The following are the steps to that Baker’s Department Store should consider for effective
implementation of policy initiatives and practices (Perkins, 2018):

Step 1-Baker’s Department Store shouldcome up with a rationale to introduce the policy.
Step 2-Establish the Critical Success Factors (CSF) of the organisation.
Step 3-Review the already existing reward policy.
Step 4-Encourage stakeholders especially employees to give their inputs.
Step 5-Come up with clear goals for the rewards.
Step 6-Review the external factors such as government policies.
Step 7-Check whether the rewards will fit into the organisation by considering issues such as the
organisation’s culture.

Step 8-Get approval from the relevant authorities for the awarding to take place.
Step 9- implement the policy formulated and make sure all the stakeholders know about the new
policy.

Equity and Fairness of Reward Policies and Practices

2.2 The significance of equity, fairness, transparency and consistency as they affect reward
policies and practices

Significance of equity
Equity is an integral part of any reward policy as stipulated by Perkins, (2018) in his work. This
involves ensuring that employees with similar achievements get the same rewards for their
efforts. It is not right to reward some employees with bigger rewards than others when their
achievements were the same. If the available rewards are not enough, it is better to wait until
there are enough rewards so that each and every recipient can feel appreciated. Sometimes it
might even be necessary to reduce the number of recipients so that everyone can receive a
reward equal to his or her achievements.
Significance of fairness
Fairness is also an important virtue when giving out rewards to employees for what they have
achieved. A process that is not fair will leave some employees unhappy and this can have
negative effects both to the employees and the organisation. A company such as Baker’s
department store which has different department should make sure that rewards to different
departments are optimally fair depending on what the employees have achieved (Nwaozor&
Thompson, 2020)

Significance of transparency
Being transparent entails letting all the stakeholders know how the recipients were selected.
Through being transparent, everyone is satisfied that the people selected rightfully deserved to
be rewarded. The simplest way of being transparent is involving the employees in selecting the
people to get the rewards. But since it might be possible to involve everyone especially in big
organisations such as Baker’s Department Store, the representatives of the employees can
participate in the exercise.

Significance of consistency
Consistency is rewarding the employees at certain stipulated times without failure. There
should be a set timeline on when the rewards are to be given out. Most companies prefer to
give awards annually, but this can change depending on the policy of the particular company as
White, (2016) has explained. Being consistent ensures that everyone involved is adequately
prepared and ready. It also gives the employees something to look forward to especially if they
have been working extra hard.

To see that good practice is followed, it is advisable to automate a significant portion of the
rewarding process. It might not be possible to automate the entire process since there are
things which can only be done manually. But the department store can automate aspects such
as selection and announcement of the recipients. With proper automation, all the stakeholders
including the employees will be able to monitor the process even remotely using portable
devices such as smart phones.

It is important to note that equity, fairness, consistence and transparency are some of the most
important components of any reward policy. This has been confirmed by the psychological
contract which was developed by Denise Rousseau and denotes that in work place there needs
to be both perceptions and mutual obligations between an employee and an employer. In this
kind of obligation, there are no written documents. Instead, both the employers and employees
feel indebt where they have to perform certain duties without being compelled. Baker’s
Department Store it is paying all its employees on time without failure. On the other hand, the
employees are performing their duties diligently without needing to be supervised all the times.
The psychology contract is relevant in any workplace because it helps employees and their
employers relate well and also enhances communication between the two parties. A good
example of a psychological contract is Google understanding that after the current pandemic
employees will want to go back to their jobs and therefore provide them with assurances that
their jobs are secure.

The Adam’s Equity theory further confirms this by stating that; ‘employees maintain a fair
relationship between the performance and rewards in comparison with others’. The theory
further explains that renumeration alone is not enough where the employees also wants to be
motivated so that the fairness in work places can be maintained. This requires the employers to
take a close look of how employees have been performing while making reward decisions. The
performance of all employees should be examined depending on their efforts to determine the
employees who deserve the rewards more. This is because there are employees who se duties
are hard to quantify and such employees might be overlooked. Baker’s Department Store is
enhancing the Adam’s Equity theory by ensuring that the reward policy is transparent. All the
employees can know the rewards given to their colleagues and therefore all the employees feel
appreciated depending on their efforts. The relevance of this theory is that it lets employee
understand that they are rewarded according to their performance and as a result, they are
encouraged to work even harder.
The psychological contract and the Adam’s Equity Acts are the primary things that keep
employers from moving skipping the planned reward programs in the organisations. Since
these legislations are not in writing, they are easier to break for the part of the employer. But
the Act gives power to employee to revolt against any changes that are made against these
laws. A good example is using holistic reward system on Baker’s done annually based on laws
and regulations on contracts.

A good example of a company that suffered from not following the rules is BBC which was
compelled to adjust its payment structure after it was established that female employees were
being paid less than their male colleagues. Such companies contravenes the Equity Act 2010
which explains that; ‘employees doing the same job should be paid equally irrespective of
gender’

The Equity Act 2010 further allows female employees to work in male dominated roles such as
operating heavy machines provided they are qualified. This is complimented by the gender pay
gap which shows that women have been receiving lesser remuneration than men despite
performing the same duties. This Act also ensures that all the employees with special qualities
such as different races, disability or different religious believes are not discriminated. The act
was developed specifically to look at the rights of the people who might be considered to
certain weakness or different characters from discrimination.

Any organization needs to show it is operating fairly and transparently by being open to
scrutiny. This demonstrates that such a company has nothing to hide. To ensure fairness while
paying employees Baker’s department could embrace paying the employees in groups to
ensure all employees in the same groups receive equal pay.

Baker’s department can also ensure fairness through mechanism such as having competent and
professional managers. This is because such managers have a higher understanding of equity. It
is also paramount for organizations to make sure that their rewarding systems are transparent.
This lets all they stakeholder feel that they are part of the process.

Employees doing different duties should also be examined different for an organization to
ensure it is being fair in its reward system. A good example is a technician at Baker’s store who
might not seem to be doing much since his results are not easy to quantify. Such a technician
plays an important role of making sure all the systems in different organizations are running
smoothly. During rewarding decisions, a manager who has completed a certain project might be
seen to have done much more compared to the technician. This is why it is important to
examine different duties in different ways so that even the people doing jobs which are not
easy to notice can be recognized. This is protected by Employment Rights Act 1996 which allows
performance on different duties to be measured according to the effort applied.

Baker’s department can ensure the reward system operates fairly and transparently by taking
closer look at the performance of each employee. This will directly result to all employees
receiving equal pay depending on their roles. I can also ensure fairness through letting the
employees work indecently. This allows the manager to identify the employees who are
competent than others. The organization should ensure it is treating all employees fairly
because not doing so will be going against the laid legislations such as the Equity Act 2010. Not
treating employees fairly would also demoralize the employees and this will significantly reduce
productivity. Some of the mechanisms that can be put in place to ensure equity include
rewarding the employees in the organization. Different departments should not hold different
reward processes. Furthermore, the organization can go a ahead and abolish the rewards from
being kept secretive. There should be an open policy where every stakeholder can see and
understand the rewards being given.

Line Managers and Their Contribution to Reward

3.1 The various ways in which line managers contribute to reward decision making Line
managers play important roles in both financial and non-financial decisions. In financial
decisions they are the ones responsible of giving pay raises and bonuses. Sometimes they may
give huge raises to some employees and not to others without giving explanations. This can
happen if the managers have personal relationships with certain ways such as being
romantically involved, having attended the same school or having worked together in a
previous organization among others. In non-financial issues they are involved in matters such as
selecting recipients of different rewards and giving out the rewards.
Managers are not always fair and some do it even without realizing. This means that there are
some managers who make decisions thinking that they are fair but the decisions end up being
unfair to other employees. Furthermore, managers are not always fair especially when it comes
to dealing with undisciplined employees. There are some managers who are more lenient
towards some employees compared to others. Managers also fail to be fair when making
decisions regarding recruitment and selection. There have been cases of managers deciding to
hire certain people just because they are from certain places.

Line managers at Baker’s Department Store are the ones directly involved with issues related to
the welfare of the employees including providing suitable working environment (Rose, 2018).
As a result, they are the ones responsible of selecting the employees who are to be rewarded.
This responsibility involves applying the various outlined methods to identify the employees
who deserve rewards. The line managers usually receive lists of the employees who are eligible
to be rewarded. From the lists they select the specific employees who are more qualified for
the rewards.

Another important role of the line manager in reward decision making is identifying the
appropriate rewards for different achievements (Nwaozor& Thompson, 2020). The rewards
given need to be suitable both to the organisation and to the recipients. There are rewards
which might not produce the desired results even if they seem appropriate. Sometimes it can
be challenging to come up with the rewards that will be appropriate since different employees
have different needs. A good example is an employee who is given a salary rise but not a
promotion despite being qualified for a higher role. Such an employee will accept the salary rise
but will not be satisfied because he or she wanted to be given a bigger role.

Line managers also have the duty of balancing the rewards given to the different employees. It
is not wise to give big rewards to some employees and then give very small rewards to others.
The ones who receive the small rewards will feel as if they were not fully appreciated. Line
managers need to make sure that the rewards are proportional to what every employee has
achieved.
HR can support managers to reduce the various risks identified by ensuring that the employees
are competent and properly qualified. This will ensure that the various duties in the
department stores are executed with high levels of professionalism. HR can also support the
line manager to reduce the various risks identified through providing all the required resources
on time. With this, it will be easier to plan and prepare for the award process to be
implemented.

A specific example of HR supporting line managers is when HR hires IT specialists who have
specific skills for making sure the reward process is automated. Another example is HR
providing information about every employee to the line managers so that the reward decisions
can be more accurate. This is helpful because HR department is the one responsible of maintain
employees’ records.

Another specific example of HR supporting line managers make decision is the HR managers
choosing to post some employees to help the line manager to make decisions. The HR can also
provide the line manager with support through giving the manager insight on how to use
different technologically oriented systems. These include the computers and communication
devices which are required for the reward policy. Google for example has an intrinsic team
management system which is supported by the HR and ensures that line managers are able to
achieve their objectives in decision making.

The Purcell’s AMO model clearly explains how line managers can motivate employees through
HR policies which are related to Ability, Motivation and Opportunity (AMO). This model
encourages managers to concentrate on the abilities of the employees. These abilities should
be enhanced through the employees being motivated. The managers should also provide the
employees with opportunities to advance their abilities. When the managers concentrate with
these three aspects, the organization and the employees benefit from improved productivity.
Line managers can use it in reward decisions by implementing it in the determinations of w
what can motivate each and every employee and identification of the employees who might
need special help based on their abilities and the nature of available motivation opportunities.
According to the report by Robinson and Hayday (October, 2009, report 470) for the Institute
for Employment Studies (IES), the key drivers of engagement are staff perception, performance,
service, productivity, health and safety. The line managers are responsible of making sure all
the components outlined are available including treating the employees fairly. These key
drivers are ensuring affect reward decisions as they help to focus on individualistic needs and
preferences of each employee. This affects the rearward decision by making sure that only the
deserving recipients receive the rewards.

A good example of contributions of line manager is John Lewis which is a high-end Department
store. The specific details of this reward policy is that all staff get 15% discount at Waitrose and
25 % discount on most of the items available at John Lewis. When it comes to non-financial
rewards, the organization gives its employees 22 days plus bank holidays after every three
months and employees who have worked in the store for more than ten years get 30 days plus
bank holidays. In the recent times, John Lewis has given its employees a 3% discount after the
bonus was announced. This is in line with the company’s reward policy which involves always
putting the employees first. The managers try to know their subordinates as much as possible
with an objective of knowing the best ways to reward them. These managers have put up
measures such as having combined social events with their employees with an objective of
being close to them as possible. The line managers at this store are the ones that make most of
the decisions such as giving promotions and they get support from the HR department. When
the line managers at John Lewis decide that a certain employee shall receive an award, there is
almost zero resistance. The managers are also the ones who inform the reward recipients about
their awards. They determine the reward scale, and manage the reward system by fostering
fairness.

Organisational Performance and the Link to Reward

3.2 The contribution of extrinsic and intrinsic rewards to improving employee contribution and
sustainable organisation performance

Both intrinsic and extrinsic rewards are fundamental to the achievement of organisation’s
objectives. This makes it important the contribution of each type of rewards.

Contribution of intrinsic rewards

Intrinsic rewards include things such as professional growth, personal achievement,
accomplishment and a sense of pleasure (White, 2016). These kind of reward systems help
retain employees especially the ones with special sets of skills which can help the organisation
significantly. They achieve this through making the employees happy and satisfied when
working at any particular organisation. When the employees are happy, there is a very little
likelihood that they might look for work somewhere else. The employees will be looking
forward to coming to work because they love what they do and this will ensure that the
organisation will have a strong workforce. A perfect example is Baker’s Department Store
ensuring that all employees enjoy periodic leaves without failure.

Contribution of extrinsic rewards

Extrinsic rewards are the tangible rewards such as money, house or a car (Michael, 2017).
These are mainly given to individual employees because of their performances. The rewards
help the employees who receive them grow personally and feel appreciated. A person who
receives this kind of reward will most likely use the reward to better his or her life. The person
can move to a better neighbourhood or do something that will improve his or her status. Such
an employee will be happier and this will directly benefit the company because the productivity
of the employee will be higher. An example of good practice in extrinsic rewards is the
department store providing housing to some of its employees who are eligible.

Another good example that can show the importance of extrinsic rewards is Google which has
been rewarding its employee with different things including free food and decompression
capsules. The company has been combining this with intrinsic rewards such as free classes and
access to therapists among others. Google also offers peer bonuses where employees can
nominate their colleagues to receive different rewards. All these rewards have made Google
become one of the most satisfying and rewarding places to work. As expressed by ‘Engaging for
Success’ report, the company has been using the four key enablers of employee engagement
which are; strategic narrative, engaging managers, employee voice and integrity. This
combination has allowed both the employees and the organization benefit from the different
kinds of rewards.
The concepts of intrinsic and extrinsic rewards are best captured by the MacLeod and Clarke’s
report (Wójcik-Karpacz, 2018). This report mainly concentrated on four aspects which are
strategic narrative, engaging managers, employee voice and integrity. These four aspects are
meant to enhance employee engagement where intrinsic rewards can be given to employees
with an objective of letting them feel nearer to their managers and their feel more feel free to
communicate. On the other hand, the extrinsic rewards are given to employee by managers so
that employees can have chances to grow in their careers and therefore feel more confident
about their opinions.

Employees’ engagement as stipulated by the MacLeod and Clarke’s report applies both to
extrinsic and extrinsic rewards. Extrinsic rewards are affected by the recommendations of this
report because employees can be influenced to expand their scope through the extrinsic
rewards. The report requires the managers to interact with their employees more and this
provides a chance for managers to influence the rewards that the employees should expect.
Through applying the principle on this report it is possible to influence employees so that they
can accept lower level rewards which are ideal especially in the current times when most
companies are not doing well because of the COVID-19 pandemic.

Employees’ engagement is also influential in intrinsic rewards because it can change the
parameters of the rewards depending on how the organization is performing. Mangers can use
the principles on this report to let employees understand that the company is changing some of
its reward policy because of factors such as the current economic performance. Employees who
were expecting rewards such as promotions will not have problem waiting until the
performance is better if the principles are applied properly.
Recommendations
Baker’s Department Store should seriously consider using the total reward policy more often.
The approach should be combined with other basic approaches so as to produce the desired
results. It is also advisable for the department store to further automate its rewarding process.
Even though some of the aspects are already automated, it is helpful to utilize the very latest
technology since it is more efficient. Furthermore, the department store should involve the
employees more in the reward process so that everyone can always be on the same page.
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