Faculty Of Management Studies

Mohanlal Sukhadia University, Udaipur

Topic- Reward system for knowledge

management
Subject- Talent Management

Submitted To- Submitted By-

Mrs. Prerna Bhati Kumkum Suthar

Sehjal Sethiya
Vinjal Bagrecha
Varsha Kunwar Rao
Laxita Chajjed
Yashraj sen
Reward system
➢ Reward practices helps in attracting result driven professionals
who can thrive and succeed in performance based
environments.

➢ An effective reward system should be linked with the

performance development system, which focuses on
performance based pay and offers ample learning
opportunities along with a healthy work environment.

• Ex- gain sharing, bonuses, team based incentives, profit

sharing, ESOP’s and equity based incentive awards.
➢ Rewards can be a vital source of motivation for the employees but
only if it is administered under right conditions. Few strategies which
improve the effectiveness of rewards are given below:

Linking rewards with the performance.

Ensuring that the rewards are relevant. Example Wal-Mart, rewards

bonuses to the top executives which is based on the company’s overall
performance whereas the frontline employees earn bonus on the basis of
the sales figure or targets attained by their store.

Ensuring that the rewards are valued by the employees.

Checking out for the undesirable consequences of administration of any

reward practice.
▪ Besides the monetary rewards, the contemporary employees desire
for non monetary rewards which may be in the form of :-

better career opportunities

skills development

recognition program

Contribution

Flexibility

Extra leave
 Elements of reward system
• Compensation.:-Compensation of an employee includes the basic
salary plus the bonus, profit, and incentives that the employee gets
along with the basic monthly salary.

• Benefits:-Mandatory programs and employer options both forms the

part of benefits given to the employee by the employer.

• Work-life balance:-The employers give time to their employees to do

their personal works along with their professional work.

• Recognition:-The employee is recognized, appreciated, and praised for

his excellent contribution to the organization’s growth due to his hard
work and dedication in front of other employees.

• Professional Development:-The benefits that are provided by the

employer to his employees for the enhancement of their knowledge and
skill capabilities.
Purpose of reward system
•Employee engagement
Employee engagement is the basic purpose of the reward system. He finds himself
the valued employee of the organization for which the organization shows care and
take care of his needs and desire which increases the engagement of employee in
the organization and boosts the morale of the employees.

•Non-monetary recognition
It has been proved from various researches or studies that the non-monetary
recognitions are directly linked to the motivation of the employees

• Business reputation
The employee who is satisfied with the best working conditions of the organization,
stability, benefits, and consideration within the organization he will spread the words
to others as well which helps in building the reputation of the business.

•Reduced turnover
Reward systems result in a satisfied and happy workforce which reduced the
turnover rates and increases the retention rates of the employees in the
organization.
The relationship between rewards
and business outcomes
• Human capital is vital to business outcome and managers have
long understood that human resource management can
enhance a company’s efficiency and create value. Therefore,
decisions such as how much to pay, how to measure
performance, and which rewards and punishment schemes
should be used are crucial in overall strategic business
scheme. Although money has always been regarded as one of
the most effective motivators and a way to bring an expected
outcome almost immediately, non-financial rewards can also
be a powerful tool to improve employee’s morale and
performance.
FOR EXAMPLE - if the managers know how to appropriately give
recognition to an employee in front of other employees, they
not only motivate and boost that employee’s ego and
performance but also convey their supports for that type of
behavior and inspire other employees to follow suit. However,
if done inappropriately, the managers will trigger jealousy and
make other employees feel inferior or embarrassed, thus
backfiring the reward’s intention
 Case Study of McDonald's
Introduction
McDonald's in Australia faces challenges in implementing its
reward and incentive system due to limited financial resources
and its business strategy of cost-effective leadership, aiming to
lower its operating costs to remain competitive.
This essay starts by providing an overview of the fast food
industry and McDonald's in Australia. A literature review of
the use of financial and non-financial rewards, and the
relationship between reward, motivation and business
outcome follows. McDonald's’ current reward and incentive
strategy is then discussed and evaluated. It is argued that the
rewards and incentives system, both intrinsic and extrinsic has
positive impacts on employees’ performance and business
results for businesses in general and McDonald's in particular.
Overview of McDonald's in
Australia
• Literature review
❖ Definitions of rewards and incentives
Total rewards can be divided into financial and non-financial rewards.
Financial rewards included monetary incentives such as
compensation, benefits, performance, and talent management,
while non-financial rewards refer to non-monetary incentives such
as development and career opportunities, work/life balance, and
social activities in the workplace.
Rewards are categorized into two groups based on their tangible vs.
intangible natures and the source of the rewards: intrinsic or
extrinsic. Intrinsic rewards are those that come from the inside of an
individual
Extrinsic rewards, on the other hand, come from outside sources,
including motivating factors such as financial payment or
compliments
McDonald’s Current Practice and
Evaluation
• According to McDonald's’ stated policy, the company’s pay
and rewards program is based on the employees’
performance, or in other words, the better their performance
is, the greater their pay opportunities become .
• The company also offers short-term financial incentives, which
entitle the employees to a certain amount of cash payment on
a yearly basis based on their performance and the business’s
profitability. In terms of long-term incentives, McDonald's
gives stock to employees who satisfy the company’s criteria to
make them become more personally responsible for
McDonald's' productivity and financial performance and more
engaged with the company’s business activities.
Conclusion
• It is argued that the reward system undoubtedly has
significant impacts on employees’ performance and hence the
business’s success. While the extrinsic incentives can give an
immediate boost to employees’ accomplishment, the intrinsic
incentives are also very crucial since they can positively
improve the company’s work environment and employees’
work ethics
• In the case of McDonald's, the company utilized both
monetary and non-monetary incentives to motivate its
workers and increase its profitability.
• Hence, in the long term, the company and its employee can
also benefit from other employee-friendly HR policies and
practices such as human resource automation, innovation, on-
the-job training and development, and organisational culture
development.