Introduction:
Reward is the benefits that arise from performing a task, rendering a service or discharging a responsibility. It is a system used by companies employees who achieve particular results are paid more or get more advantage. Every company has some forms of reward system, whether it is outspoken or not, it exists. If the organisation reward a certain kind of employee behaviour, good or bad, that is what company will get more of. Reward systems help in increasing performance and creating happier employees. The greatest management principal is that the things that get rewarded get done. All reward systems are based on the assumptions of attracting, retaining and motivating employees. Higher rewards will give higher satisfaction. This will lead to lower turnover and more job applicants. It is difficult to retain best performers in the organisation. Financial rewards is an important component of reward system, but there are other factors that motivate employees and influence the level of performance. So, higher rewards will motivate skilled employees to perform better.
Purpose:
A reward system puts together employees’ natural self- interests with organisation’s objectives and provides three types of management control benefits, informational, motivational and personnel related. First, reward should catch the employee’s attention and at the same time it works as a reminder for the person in charge of what results should be completed in different working areas. This is a good way to emphasize and convince the employees of which performance areas that are important and create goal congruence within the organisation and singals how the employees should direct their efforts . To motivate is the second control benefit. People sometimes need an incentive to perform task well and work hard. Last but not least we have personnel control benefit. Organisation give rewards for many different reasons . Ex: to improve recruitment and retention of offering a compensation package that is competitive on the market.
Current trends of reward system in India
The current trend is one of integrated reward approach. Reward system usually means the financial reward on organisation gives its employees in return for their labour. While the term reward system not only includes material rewards but also non- material rewards. The components of a reward system consist of financial rewards (basic and performance pay) and employee benefits, which together comprise total remuneration. They also includes non financial rewards (recognition , promotion, achievement responsibility and personal growth) and in many case a system of performance management. Pay arrangements are central to the cultural initiative as they are the most tangible expression of the working relationship between employer and employee.
Statement of the problem:
- Performance standards are too high or unattainable
- Ineffective implementation of the reward system
- Reward may not motivate every employee
- Change in objectives makes the reward system difficult
- Employee may not appropriate non- monetary rewards
- Reward system may not be cost-effective
- Expectancy level of the of an employee may increase with time
Review: Reward that an individual receives are very much a part of his/her motivation organisational desired performance can be achieved only from high- performing employees. High-performing employees can make other resources perform highly. Reward is a proven and established means of stimulating employees to perform exceedingly well. Study of all genres highlight that a poorly designed and implemented reward system can cause loss of morale among employee and this eventually can lead to organisational ineffectiveness. No organisation can really aim to be effective unless its reward system is effective.
Objective: The reward system is based on different aspects of an organisation. This may be of organisation, number of employees, designation of employees, etc.
Finding: Rewards provide information to the employees about their effectiveness in various situation.
Employee motivation is affected as better performance if likely to fetch higher reward.
Suggestion:
# Cultural influence must be considered towards the reward system.
# Reward system is subjected to consideration of many internal and external factors. Internal factors typically concern the organisation’s ability to pay and reward employees. External factors include demand and supply forces, inflation and customers. Such factors must be carefully analyzed for the effective results of a reward system.
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