Reward Management

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Effective Reward Management “Effective reward management is critical to organizational performance.” Effective reward management, as a system, is the most powerful tool available to reinforce organizational values and translate them into employee actions (read behavior). Here, the ‘organization’ does not only refer to a business structure, but any institution (or activity) that involves people working together, and requires their voluntary contributions in order to operate successfully. Whether it is a school, a hospital, an NGO, a government agency, a political party, or a religious foundation, all require a matrix through which the performance of its individual members can…show more content…
Furthermore, Schuler and Jackson (as cited in Esteves & Caetano, 2010) state that the focal point of success of companies today is centered on the effective use of human resources. In today’s knowledge-based economy, innovation has become the principal source of competitive advantages in global business; the success of firms now depends more on their intelligence capability – such as employee creativity – than traditional material assets (Amabile et al., as cited in Zhou, Zhang & Montoro-Sánchez, 2011). The creative capability of individual and collective knowledge workers is the fuel that powers innovation in firms. While creativity leads to the production of new and useful ideas in any domain, innovation is the successful implementation of those creative ideas within an organization (McLean, as cited in Zhou, Zhang & Montoro-Sanchez 2011). In highly dynamic business environments, innovation and creativity have become crucial for creating competitive advantages for the firm. People are the most vital resource of an innovative organization, and all innovation-based firms, in order to succeed, have to learn how to manage, motivate and reward their people (Gupta and Singhal, as cited in Zhou, Zhang & Montoro-Sanchez 2011). Various experimental studies indicate that higher economic compensation correlates positively with increased innovative behavior by employees (Eisenberger., Cameron and
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