Rewards

A rewards system can reinforce a business’ strategies that facilitate change or support desirable corporate values, such as customer orientation

Monetary and non-monetary

• Remuneration is :: financial and non-financial benefits that employees receive in return for their work.
• Monetary rewards are :: reflected in pay or having financial value.
• Non-monetary rewards :: do not have a financial value (e.g. social activities or retirement planning)

Individual or group

• As group and team-based structures has increased

  • and Rewards are often related to individual performance
    • → it is harder to distinguish individual performance within a group
      • → this can lead to rivalry if not managed well

• therefore businesses may implement gain-sharing plans and group incentive schemes to support team-based culture

  • Gainsharing: encourages employees to find areas to improve productivity (or reduce costs)
    • where the savings achieved are distributed to the employees

• Additionally, HR managers - when designing a rewards system - need to create benefits that account for

  • economic conditions, individual employees, and the overall profitability of the business.

Performance pay

• Performance pay is :: remuneration that is based on distributing rewards according to individual employee performance.

Key issues for HR managers to consider in designing rewards system for employees:
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• Performance related
  • incentive plans for performance above standards or criteria, bonuses, piece rates, commission, production related incentives
• Job related
  • role and level of responsibility, scope of supervision, base pay, interpersonal skills, experience, value to the company
• Other individual considerations
  • group incentives, employee values