Reward Management Essay

3600 Words15 Pages
Reward Management (RM) has been defined as the distribution of monetary and non-monetary rewards to employees in an effort to align the interests of the employees, the organisation, and its shareholders (O’Neil, 1998). In addition O’Neil (1998) also suggests that a RM system can serve the purpose of attracting prospective job applicants, retaining valuable employees, motivating employees, ensuring legal requirements relating to direct and indirect rewards are not violated, assisting the company in achieving human resource and business objectives, and ultimately assisting the organisation in obtaining a competitive advantage.

Various conflicts in the RM system can affect the benefits that can be obtained. It has been argued that
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Similarly, Cascio (1991) suggests that the combination of the following five requirements along with a performance based pay system can also have a very significant impact on performance. The first of these is skill variety, where a wide variety of tasks or procedures is available to the employee. Next is task identity, where the employee can clearly identify the output of a task as a product of their efforts. This is followed by task significance, where the work is recognised as important and meaningful. After this comes autonomy, where the employees have a major say in work planning and execution. The final requirement is feedback, where employees receive constructive advice or criticism on their performance.

The rewards offered can be extrinsic such as wages, incentives and bonuses, or intrinsic such as job satisfaction, an internal feeling of worth and a sense of well being on the job.

O’Neil (1998) suggests six minimal criteria for the design of a performance based pay system. The first of these criteria is that the reward system should be self-funding, that is, the performance increases should as a minimum offset the cost of the rewards provided. The second criterion is that the distribution of the rewards must be consistent, fair and justifiable. In addition reward plans must be transparent and clearly communicated. The third criterion
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