Reward Management !!

Reward management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization.

Reward management consists of analysing and controlling employee remuneration and all of the other benefits for the employees. Reward management aims to create and efficiently operate a reward structure for an organisation. Reward structure usually consists of pay policy and practices, salary and payroll administration, total reward, minimum wage, executive pay and team reward.

Objective:

Reward management deals with processes, policies and strategies which are required to guarantee that the contribution of employees to the business is recognized by all means. Objective of reward management is to reward employees fairly, equitably and consistently in correlation to the value of these individuals to the organization. Reward system exists in order to motivate employees to work towards achieving strategic goals which are set by entities. Reward management is not only concerned with pay and employee benefits. It is equally concerned with non-financial rewards such as recognition, training, development and increased job responsibility.

 

Types of rewards:

• Intrinsic motivation
• Extrinsic motivation

Rewards serve many purposes in organization, build a better employment deal, hold on good employees and to reduce turnover.
The principal goal is to increase people willingness to work in one’s company, to enhance their productivity.
Most people assimilate "rewards", with salary raise or bonuses, but this is only one kind of reward, Extrinsic reward. Studies proves that salespeople prefer pay raises because they feel frustrated by their inability to obtain other rewards, but this behavior can be modified by applying a complete reward strategy.
There are two kinds of rewards:

• Extrinsic rewards: concrete rewards that employee receive.
  • Bonuses
  • Salary raise
  • Gifts
  • Promotion
  • Other kinds of tangible rewards
   
  
• Intrinsic rewards: tend to give personal satisfaction to individual
  • Information / feedback
  • Recognition
  • Trust
  • Relationship
  • Empowerment
  • Monogrammed name plaque

Intrinsic rewards makes the employee feel better in the organization, while Extrinsic rewards focus on the performance and activities of the employee in order to attain a certain outcome. The principal difficulty is to find a balance between employees' performance (extrinsic) and happiness (intrinsic).

Motivation theories:

Motivational theories are split into two groups as process and content theories. Content theories endeavor to name and analyze the factors which motivate people to perform better and more efficiently while process theories concentrate on how different types of personal traits interfere and impact the human behavior. Content theories are highly related with extrinsic rewards, things that are concrete like bonuses and will help improve employees' physiological circumstances whereas process theories are concerned with intrinsic rewards, such as recognition and respect, which will help boost employees confidence in the work place and improve job satisfaction.

Job evaluation:

Job evaluation is closely related to reward management. It is important to understand and identify a job's order of importance. Job evaluation is the process which job's are systematically assessed to one another within an organization in order to define the worth and value of the job. This system carries crucial importance for managers to decide which rewards should be handed out by what amount and to whom. Job evaluation provides the basis for grading, pay structure, grading jobs in the structure and managing job and pay relativities.