Employee Rewards

Figure 1: Rewarding Employees (source: Singh, 2021).

Reward is a motivational plan aimed at enhancing the behavior required of employees or employers in exchange for their service to the organization. Rewards are an important tool for improving employee performance in Every organization. Management uses rewards to motivate employees. Therefore, we can say that an effective reward system attracts new employees to the organization and motivates existing employees to perform at a high level. Employee’s good work is necessary to achieve the specific goals. Employees give their good efforts for achieving goals and good effort depends on rewards. In other words, we can say that good rewards are the most important way to involve staff in their work and in their organization. In other words, good rewards make employees more involved in their work and with their company.

“Rewards systems are often implemented within organizations as a key management tool that can contribute to a firm’s effectiveness by influencing individual behavior and motivating employees at work” (Lawler & Cohen, 1992). Lack of rewards will create an unpleasant environment, thus reduce Employee's work effort and can be obtained to leave their jobs. For these reasons, rewards are becoming increasingly important.

Types of Employee rewards

ü  Intrinsic and Extrinsic Rewards:

Intrinsic relates to nonfinancial or non-cash rewards like achievement, accomplishment feelings, recognition, job satisfaction and growth and extrinsic rewards relates to financial rewards or cash related like formal recognition, fringe benefits, incentive type payments, pay, promotion (Bajracharya, 2018).

ü  Financial and Non-Financial Rewards:

Financial reward mostly consists on pay for performance such as job promotion, bonus, commission, gifts etc. and non-financial rewards are non-monetary/non cash and it is a social recognition such as acknowledgement, certificate, and genuine appreciation etc (Medhi, 2021).

ü  Performance-based and Membership-based rewards:

Performance-based rewards are awarded based on the performance of the employee in the company. Performance-based rewards are provided in compensation plans, incentive plans, group bonuses or commissions and Membership-based rewards are given in the form of benefits and services provided to the company's employees. For example, it might be in the form of the annual Christmas bonus, company retreat, upgraded office furnishing, etc (Medhi, 2021).

 

Reward strategy

Reward strategy involves designing and implementing reward policies and practices support your organization’s objectives, delivering a motivated and effective workforce.

Figure 2:Rewards strategy (Source: Worldatwork, 2021).

What are the Benefits of Rewarding Employees?

·         Happiness in the Workplace.

·         Increased Productivity.

·         Attract potential applicants.

·         Better employee retention.

·         An additional tool to boost health.

·         Create a Team Culture.

Conclusion

The reward is more important of any nature of business very beneficial for the employee’s job performance, as better performance is compared to absent of reward Compensation. It’s motivates employees to do their job as perfectly as possible and will be loyal to the organization. 

 

References

Bajracharya, S., 2018. businesstopia. [Online]
Available at: https://www.businesstopia.net/human-resource/intrinsic-and-extrinsic-rewards
[Accessed 18 December 2021].

Lawler, E. E. & Cohen, S. G., 1992. Designing pay systems for teams, Los Angeles, CA: CEO Publication.

Medhi, B., 2021. VANTAGE CIRCLE. [Online]
Available at: https://blog.vantagecircle.com/types-of-rewards/#:~:text=Membership%20versus%20Performance-based%20Rewards%20Performance-based%20rewards%20are%20allocated,benefits%20and%20services%20provided%20to%20the%20company%27s%20employees.
[Accessed 18 December 2021].

Singh, R., 2021. NextBee. [Online]
Available at: https://blog.nextbee.com/2018/10/15/the-importance-of-rewarding-employees/#sthash.7kPtRFqP.dpbs
[Accessed 18 December 2021].

Worldatwork, 2021. Worldatwork. [Online]
Available at: https://worldatwork.org/total-rewards
[Accessed 18 December 2021].