Purpose of Reward Management system
Good reward management will transform your company
Introduction
Employers and HR departments implement a comprehensive package of motivational benefits and bonuses as part of a reward strategy to reward employees for attaining particular objectives. This strategy aims to increase employee loyalty and behaviors. Reward schemes are frequently in line with business strategies to help the company as a whole succeed through teamwork.
Reward schemes can take many different aspects and can consist of a variety of different rewards and incentives for employees, but at the basis, it may created to inspire workers to perform better in order to support the company's overall achievement of its business objectives (thomas, 2019).
How to develop a reward strategy?
The effectiveness of rewarding employees depends on how well it is guided by a reward strategy.
All payment structure reviews should commence by discussing with senior stakeholders. This enables to comprehend the business's current state, future direction, and implications for the objectives of the people.
Figure 01:(QCG, 2021)
This top-down viewpoint is then tested against reward guiding principles. These principles are crucial to making consistent reward decisions and serve as the basis of employee communications.
All decisions on rewards involve trade-offs, but we need to figure out how you want to be rewarded in general. The corporate environment is then used to evaluate these ideals.
Here, we need to work most effectively in a workshop format with senior leaders where all arguments are presented. This enables the application of principles with knowledge. For instance, can you manage the impact on internal equity if you only concentrate on the exterior market? How will you (or your supervisors) inform employees of reward decisions? In order to respond to these inquiries, guiding concepts are a crucial first line of defense.
After that establishing reward plan and some guiding principles, it may need to test with reward effective model. To examine the connections between rewards and corporate strategy, use QCG's 5 cs reward effective model. To increase engagement and guarantee the best possible return on your reward investment, consider both a top-down and bottom-up approach.
This approach takes into account a broader range of reward-related characteristics that we view as an opportunity to enhance employee engagement rather than a barrier to it. The methodology offers a framework for comprehensive top-down and bottom-up testing of reward-related topics. Although each organization has an own culture and set of problems, all organizations can use the following criteria to gauge the effectiveness of rewards (QCG, 2021).
Table 01: (QCG, 2021)
The success of an organization's present reward scheme and how rewards fit into the Employ Value Proposition can both be determined by the answers to these questions.
Benefits of reward management
1. Help to attract the top talent
Company talent acquisition staff must effectively manage and market your employer brand. This is due to the desire of elite talent to know that they will be compensated fairly.
2. Helps to retain top talent
Implementing incentive management is done mostly for retention purposes. It's difficult to explain how important staff retention is. The success of your company depends on keeping your finest employees on board. If they don't feel valued, they can decide to join a new company.
3. Contributes to a strong, positive company culture
A reward system with extra compensation for hard work, shows you're all about positive reinforcement for employees that go the extra mile.
4. Strengthens Company Employee Value Proposition (EVP)
The EVP is the whole package you provide to your employees, and effective reward administration plays a significant role in this.
5. Contributes to employee wellbeing
The wellbeing of the workforce is more crucial than ever, and no organization can afford to falling short of the individuals who drive it forward.
6. Increases productivity
Reward management can help productivity massively. From healthy competition to knowing that their hard work will be appreciated, employees are more likely to produce quality work if they know meaningful rewards lie around the corner. In other words, giving someone a higher compensation at the right moment, could have a high ROI.
7. Helps to build a good reputation
Reputation affects many elements of the business, much like corporate culture does. Clients are one of the more crucial areas of influence.
8. Improves Company performance management system
The practice of performance management is very common in modern business management. This attempts to grow and continuously improve each employee's performance. Therefore, this is about making company the best it can be, not just about reaching the goals. Reward management is increasingly being used in these systems to maintain employee engagement and professional development.
9. Help to improve increasing true loyalty
Similar yet distinct from retention and culture is loyalty. An effective reward management system ensures that your employees can form a meaningful bond with your business. This will improve many areas, such as how they speak about and sell the company to others, whether they be clients or potential job applicants.
10.Encourages a long-term outlook from employees
A sophisticated system of reward management will motivate consistent good effort over time. That's the point when "management" takes place. Instead of just giving your staff gifts, consider how to best tie their contributions to long-term objectives, cultivating a long-term view.
11. Help to increases engagement.
Employee engagement gets an instant boost from reward management. It can spark a passion and drive to bring the best version of yourself to work every day.
12.Help to encourages a proactive spirit
Understand what merits rewards. not only for a good work, but also for excellent ideas that someone just came up with. If you offer incentives for such efforts, people will feel more motivated and supported to speak up when they notice areas that could use improvement.
All of this can be connected to the Expectancy Theory. According to this idea, an employee's motivation is essentially the result of their valence, expectancy, and instrumentality. Specifically, this means:
- Valence: how much someone wants a reward
- Expectancy: their assessment of the likelihood that their effort will lead to expected performance
- Instrumentality: their belief that their performance will lead to reward
People will be more motivated to put up the extra effort if they are confident that they will receive compensation for going above and beyond (grewal, 2021)
13. Happier employees make for happier customers
We are all aware of how our mood affects other persons. Therefore, everyone knows that the clients will be greeted with a smile and a pleasant attitude by ensuring the employees are satisfied, with an incentive system merely being a part of the solution for that.
14.Helps lower stress levels, meaning less absenteeism
People spend a lot of time at work, which means it directly impacts their health. In an environment that is balanced, that is focused on rewarding good work - and not only punishing for underperforming, people will feel less stressed (grewal, 2021).
15. It promotes teamwork and collaboration
16. Reward policies make it easier to spot top talent
Following up on having a structured reward system: it doesn't just manage expectations, it also helps management to measure employee performance. If you're looking for a fair way to identify the A players in your workplace, a reward system can help.
17. Help employees focus on the company’s values
18. Help employees to develop new skills (grewal, 2021)
Conclusion:
Rewarding the employees, for the work done by them will motivate them, then the employees will perform well to achieve the goals of the organization. The management of rewards should be done in a strategic manner to be successful. If not it will be quite difficult to retain the employees as well as the employees will be unsatisfied.
Chamara - Strategic reward management is important because it helps to make employees feel valued for their contributions to the business. By implementing clear company policies for reward management, you make it an equal opportunity for each employee to work for positive rewards. You have clearly explained on the topic matter. The writing flow and the references given is satisfied.
ReplyDeleteChamara - Reward management is the introduction of policies and strategies that rewards every employee within the business fairly and consistently across the board. This is why most of the top company's have succeeded in the past. One of the key strategies to implement.
ReplyDeleteYou have emphasized the importance of reward management very clearly in your article. Enough proven references as well. Writing flow is very encouraging.
My favourite part of this blog is the benefits section of Rewards Management. You have written it in a very short way so that someone who does not understand the subject can learn it with pleasure. I think it encapsulates well how that scope contributes to the success of an organization
ReplyDeleteThanks for your valuable comment. Benefits parts is the most important part in every rewarding system. I was try to elaborate little bit.
DeleteThis article provides more information on the purpose of reward management system and is linked to appropriate theories. Apart from writing, some of the benefits of reward management have no explanation such as “it encourages teamwork and cooperation”, “it helps employees focus on the company's values”. Otherwise, I like this article.
ReplyDeleteThanks for your valuable comment. In this blog post I was trying to explain what are factors we should consider when implementing a reward strategy. and how its benifits to the employees.
Delete