Importance of Reward Management

 (Marketing91, 2021)

Reward Management is a HRM concept revolving around compensation & motivation for the contributions given by each & every employee within the organization, Reward Management gives an opportunity for the management to say "Thank You" for all the hard work put in by the employees. The concept of reward management has not been around for a long period as there was a time when many people saw the employee-employer relationship as a mere exchange of labor for a monthly or daily monetary compensation. However the global market has evolved since & many more perks, benefits & recognition are expected by the employees for their contributions.

"Reward Management is adaptation of policies that reward employee on consistency, fair and equitable basis in line with organizational values. Rewards comprises of praise, challenging work, avenues for growth & development. Praise can be simple recognition for work in presence of other employees. Handling challenging assignment is also the indication of faith from management and act as reward for employee to give his best. Promoting employee to next level or sending somebody for next level training also act as reward for good work done by employee." (MBAskool, 2021)

Types Rewards Management.

In contrast to popular belief monetary compensation is not the only method of Reward Management & Motivation in fact there are three major categorizations of Reward Management systems, They are; 

  • Extrinsic Vs Intrinsic Rewards.
Extrinsic rewards are the set of Rewards that are basic in nature and will be a natural part of any modern job role like Job Security, Salary, Bonus, Work environment, Increments, Gifts etc.

Intrinsic rewards are the set of Rewards that are a bit more tailored to the individual in nature and will be offered as compensation as a result of an exceptional performance or a much higher demanding job role like Job title, Recognition, Career growth.
  • Financial Vs Non-Financial Rewards.

Financial rewards are the most popular & frequent entity in performance management, it includes all of the monetary benefits & compensations offered to recognize an employees contribution like Salary, Bonus, Increments etc. 

Non-Financial rewards are the rewards that do not have any monetary aspect however is of significant value to the employee, these types of rewards could be much more feasibly & carry long term of recurring values like an Official Vehicle, Discounts on company products, Promotions etc.

  • Membership Vs Performance-Based Rewards.

Membership based reward management are the rewards which are given to employees based on their service to the organization, some of the examples for this type of reward system is Annual Bonus, Long Service Awards, Company retreat etc.
 
As suggested by the name Performance based reward system is where the contributions of the employees are measured based on their individual performances & they are in turn rewarded for that, some of the examples for this method would be Commissions, Group Bonuses or payment plans.

Benefits of an effective Rewards Management program.

  • Employee Motivation.
  • Increase employee satisfaction & retention.
  • Increase organizational productivity.
  • Help to increase brand image & attract top talent in the industry.
  • Creates a positive organizational culture.
  • Improves employee mental & physical health.
  • Will create a long term sustainable business model.
  • Increase service quality & customer satisfaction.
  • Create teamwork among employees.
Conclusion.

In conclusion we could say that having an proper Reward Management system in place will help not only the organization but it's employees to grow in a mutual manner & it will help the organization to make sure that all of their employees are in line with their goals & objectives & will help the organization to be the market leader in their particular segment.

References.

Marketing91, 2021. Marketing91.
Available at: https://www.marketing91.com/reward-management/

MBAskool, 2021. MBAskool.
Available at: https://www.mbaskool.com/business-concepts/human-resources-hr-terms/16624-reward-management.html

Medhi, B., 2021. Vantage Circle.
Available at: https://blog.vantagecircle.com/types-of-rewards/

 

Comments

  1. D.I.KanchanaAugust 29, 2021 at 2:30 AM

    Reward management refers to rewarding employees based on their value to the company. It's a system that ensures all employees are compensated fairly and consistently for their efforts. The goal of reward management is to motivate employees to achieve the company's objectives. In short, rewards management is the concept of rewarding and motivating employees for their hard work and loyalty to the company. A motivated workforce can help an organization succeed. When employees are motivated to work harder, the organization runs more efficiently and achieves its goals more effectively.

    ReplyDelete
  2. Arun_Prakash_MBA_BlogAugust 29, 2021 at 3:11 AM

    Reward management could be defined as rewarding an individual based on his/her performance over a period of time. As you have clearly stated, these rewards can be monetary or non-monetary, tangible or intangible. Also reward management work as a motivation factor which will lead to higher productivity, employee retention, taking authority responsibility on the job and etc. It is a must that every organization should look into the possibility of implementing a proper structure for rewarding as it is clinical aspect of employee motivation that reflects in employer performance too.

    ReplyDelete
  3. Kasun YapaAugust 29, 2021 at 4:06 AM

    Reward management is motivational practice that businesses use to reward employees for their achievements and success. The company sets goals and establishes rules for its employees to follow to achieve those goals. It makes sure that employees are clearly aware of these goals, rules, and the rewards they will get for high performance.
    Nowadays, people often don't remain at their jobs. Each time a new employee is hired, the company spends money on hiring and training that it could have spent elsewhere. Having a good reward system helps keep employees happy, loyal to the company, and eager to move up the ladder. Rewards, like public recognition and additional pay, motivate employees to work harder. So thanks for sharing this valuable article

    ReplyDelete
  4. blogs of UMESHAugust 29, 2021 at 5:19 AM

    Rewards in the workplace can be defined as admiration/appreciation, and support in employee retention. As a result, HRM is in process of executing a well-known rewards system throughout the organization. Employees must be rewarded based on performance, which will increase employee satisfaction and, in return, it will increase organizational performance.

    Personally most of us might already experienced these kind of rewards in our practical life.
    Thank you for sharing

    ReplyDelete
  5. Nadeeshan MadusankaAugust 29, 2021 at 10:49 AM

    The process of determining and awarding a reward to an employee based on their job performance is referred to as "reward management." This will motivate employees to work hard in order to attain the company's objectives. Benefits, amenities, and growth in the workplace are all examples of rewards. It must be appropriate for the job's level of performance, personnel demands, and the organization's overall capacity.

    ReplyDelete
  6. Nadun AbeywickramaAugust 29, 2021 at 10:53 AM

    Reward is a comprehensive concept that has been said to represent anything that an employee may value that an employer is keen to offer in exchange for his or her contributions (Bustamam, 2014 as cited Chiang and Birtch, 2008).

    ReplyDelete
  7. Fayaz SadiqueAugust 29, 2021 at 11:06 AM

    Agree that reward system benefits both the employee and organization. A reward system encourages workers to perform well. It aids in retaining highly competent employees. Employees are paid fairly and equally for their contributions to the company. A successful incentive system keeps workers happy, loyal, and ready to advance. Employees perform more when rewarded with public praise and extra money (Davis, 2021).

    ReplyDelete

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