Assessing the Effectiveness of Reward Systems
Assessing the Effectiveness of Reward Systems
“To win in the market place you must first win the work place”
-Doug Conant, Fmr. President and CEO of the Campbell Soup Company
Rewards are some kinds of way motivate the organized people. And also it comes from effective people management. There are different kinds of rewards like financial, social, psychic, extrinsic and intrinsic rewards. Employees can get financial rewards like salary, pay, perks, expenses, bonus and commission, benefits, rewards are reputation, recognition, praise and thanks, responsibility, interest, travel, stimulus, training, sense of achievement and advancement, development and promotions.
Reward effectiveness can be assessed by measuring of employee attitudes, analysis of pay market positioning and staff turnover rates. Less well known measures are length of service, vacancy rates, and business metrics. Those are the measuring factors to assess the effectiveness of rewards in various organizations.
If an Organization has employees who left their jobs frequently, rates are high or job refusal rate are greater than we can decide their rewarding system is not up to the mark and non-effective. Karen (2004) defines a reward system as the mix of Extrinsic and Intrinsic rewards provided by the employer. It also consists of the integrated policies, processes, practices and administrative procedures for implementing the system within the framework of the Human Resources (HR) strategy and the total organizational system. There are two types of rewards.
- Extrinsic rewards which are tangible rewards that employee receives for their good performance, such as bonuses, salary raise, gifts, promotion, compensation and commissions.
- Intrinsic rewards are inclined to give personal satisfaction to an employee, such as information, feedback, recognition, trust and relationship.
“Brains, like hearts, go where they appreciated”
- Robert McNamara,Fmr. American Secretary of Defence
Employee bonus systems are positive strategies and they can provide actual motivation. Moreover to monetary thoughts; bonus systems take into account factors such as attendance, customer service, quality, group and individual performance. Also bonuses increase employees' motivation and output. It improves employees' morale and increases their self- esteem. However, a carefully planned bonus scheme can improve retention which helps to preserve the best employees in an organization.
Salary raise is the other types of reward system and it is one of the most significant motivators for the employee, also it is the key motivation behind an employee's performance in an organization.
“An employee’s motivation is a direct result of the sum of interactions with his or her manager.”
- Dr. Bob Nelson, Best Selling Author and Motivational Speaker
Promotion is one of the most important types of reward system, where the organization rewards an employee by moving them from their position to a higher position. Promotion improves employee's morale and job satisfaction.
However, improved performance is an effectiveness of reward system; it helps the employee to perform better at work in order to get extra reward from the organization. At the same time employees also work hard and put their skills and understanding which assist them to gain knowledge and learn something new.
References
Karen, T. (2004) Human Resource Management. 2nd Ed. London: Kogan Page Publshers.
Specific measures used to assess reward effectiveness These were measures of employee attitudes, mentioned by 75 per cent of those attempting to evaluate reward effectiveness, analysis of pay market positioning (72 per cent) and staff turnover rates (62 per cent).
ReplyDeleteYes Shalomie,,,,☺
DeleteA motivated workforce can be a significant factor in organizational success.
When employees are motivated to work at higher levels of productivity, the organization as a whole runs more efficiently and is more effective at reaching its goals. 🏆
It is one thing for organizations to institute reward processes and it is another thing for them to evaluate whether the reward processes are being effective. In other words,
ReplyDeleteBoth factors are more important ☺
DeleteThe evaluation of the reward processes can be done from the organizational perspective as well which means that instead of only asking employees about the adequacy of the reward processes, organizations can conduct market rate surveys and engage consulting firms to evaluate their reward processes.
ReplyDeleteSoo true ☺
DeleteReward professionals have never been under more pressure to demonstrate the efficacy of the major investments they make in their pay and reward arrangements and the impact of any changes to them. Recessionary conditions show few signs of abating, yet there are still manifestations of key skill shortages, while increasing attention is being placed on “evidence-based management” and “management by analytics” ideas.
ReplyDeletewhat is the relationship between evidence based mgmt and Reward systems?
DeleteWhen implementing an employee rewards program it is imperative that managers measure its effectiveness. Below are 9 steps to help managers measure the impact their employee rewards program has on employee and company performance, workplace satisfaction and employee engagement with their work.
ReplyDeleteCan u brief about those 9 steps and effectiveness of them ? 👀👀👀👀
DeleteFor associations to foundation reward procedures and it is something else for them to assess whether the reward procedures are being successful. At the end of the day,
ReplyDeleteIn some context ....☺
DeleteReward is an important way of motivating employees that directly affects employee performance, retention, attraction of new recruits and etc. What is important here is to have a combination of monetary and non monetary rewards in an organization :)
ReplyDeleteWell...
DeleteMonetary or Non monetary Reward system helps to motivate employees to achieve high quality performance. 😊
It helps to attract and retain highly skilled workers. Reward systems promote fairness and equity by rewarded employees according to their contribution and effort to the organization. 😊🌟
Measuring and improving the effectiveness of reward practices has major potential benefits for employers in our ever-more knowledge and service-based economy
ReplyDeleteTherefore economic growth helps to reduce government borrowing. ☺
DeleteEconomic growth also plays a role in reducing debt to GDP ratios.📉📉📉
ReplyDeleteReward system is a process of recognizing and appreciating employees by employers for the good works done.Effective and efficient reward programs have a positive effect on workplace productivity while motivating employees to improve their performances and increase their loyalty towards the organization.
motivated people are priceless ☺
Deleteconsidering Maslow's theory of hierarchy, which levels require extrinsic rewards and which levels mostly require Intrinsic rewards.
ReplyDeleteRewards are very important for the motivation of human resources in an organization
ReplyDelete