Management Control Systems: Rewards Systems

1028 WordsOct 9, 20125 Pages
REWARDS SYSTEMS: THE CASE OF TANZANIA CIGARETTE COMPANY (TCC) A reward is a consideration that is given to an employee by the organisation on return to the quality of services rendered by the respective employee. Owners of the organisation (in most cases, shareholders) are the ones who will approve the rewards to employees including the directors, head of departments and the lowest cadre of employees. A company may also reward non-employee stakeholders for their contribution to the organisation. The rewards systems as part of the management control systems, are designed in organisations to motivate employees and managers to perfom better. A well designed rewards system is expected to motivate people to contribute to the attainment of…show more content…
This is a typical monetary bonus based on financial perfomance indicators (which are sales). These are awarded in the form of Group rewards. Each individual is encouraged and forced to contribute to the attainment of group goals and hence rewards. At the end of the year these monthly sales perfomances are weighted to get an annual total which will also be used to award bonuses to other employees who are not part of the sales and marketing team. This is done simply because sales targets are company targets as a whole and not only sales team’s targets. At the end of each year, which is also a financial year, managers and other employees’ perfomance are evaluated and marks or grades are awarded accordingly. These are formal rewards and they eventually determine salary increament and promotion depending on perfomance. Non financial perfomance indicators are normally used here with very few financial perfomance indicators considered. Promotions may also be given to managers and employees even before the year end, at any time of the year. CRITERIA WERE CONSIDERED AT TCC WHEN DESIGNING REWARD SYSTEMS TCC has been successful with its rewards systems because it had considered criteria which are crucial for when designing rewards. Firstly, to ensure that perfomance measurements are congruent with the organisation’s objectives and goals, many perfomance indicators are meant towards improving sales, environment protection, improving quality of production, high

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