Employee Rewards

8 Key excerpts on "Employee Rewards"

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  Human Resource Management

  • Michael L. Nieto(Author)
  • 2017(Publication Date)
  • Red Globe Press

    (Publisher)

  Bonuses Share options Commission payments Time off work to study a degree programme Funding for additional qualifications Career advice and personal development planning (with internal or external providers) Examples of non-salary rewards include: Recognition of good work Public praise of successful staff Choice of next project Overseas assignments Training and development Time to attend college courses Mentoring Flexible working hours The above lists are not intended to be exhaustive and each organization should decide what is appropriate to its particular needs (Schrage 2000). The research I conducted with the organizations discussed in this chapter indicated that the key to a successful cafeteria system was the initial set-up and preparation. Most people hope to enjoy their work, and a benefits package that is tailored to their personal needs is more likely to attract and retain employees than a one-size-fits-all approach. SUMMARY OF PERFORMANCE AND REWARDS MANAGEMENT (a) Performance and rewards can motivate and energize us to overcome obstacles, preserve, and achieve more than we expected. 107 PERFORMANCE AND REWARDS MANAGEMENT (b) An organization, whether small or large, can only perform as well as the attitudes, knowledge and skills of its people. (c) Intrinsic and extrinsic rewards can be seen in every working environ-ment. (d) Pay, benefits and rewards need to encourage people to join the orga-nization, stay and remain interested in their work. (e) Those persons tasked with leading the design of the performance rewards system should be cognizant of organizational context; the particular mission, organizational heritage and culture. (f) Each person has different interests, motivations, and perceptions of what they would like from their jobs. (g) Focusing individuals’ attention on gaining personal rewards detracts from team-working to the detriment of the organization.

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  Introduction to Human Resource Management

  A Guide to HR in Practice

  • Charles Leatherbarrow, Janet Fletcher(Authors)
  • 2018(Publication Date)
  • CIPD - Kogan Page

    (Publisher)

  12

  Employee reward

  LEARNING OBJECTIVES

  After studying this chapter, you should be able to:

  • describe the concept of employee reward;
  • show how reward is managed, in terms of the organisation’s reward policies, systems and procedures;
  • explain what is meant by financial, non-financial and total reward;
  • recognise that the link between reward and motivation is complex;
  • understand a range of payment systems and make meaningful contributions to their development and implementation;
  • identify key legislation that has impacted upon how people are rewarded and the requirements placed upon organisations with respect to ‘gender gap’ and ‘equal pay’ reviews.

  Defining reward

  It is not possible to define reward in a single statement because perceptions of it vary from one person to another and from one situation to another. A manager, for example, might define reward as ‘the payment that an employee receives in accordance with the value of his or her work contribution to the organisation’. An employee, on the other hand, may say that it is ‘the return that he or she receives on the investment of his or her time, knowledge, skills, loyalty and commitment’. Non-financial factors such as the benefits and facilities that the organisation offers to its employees are integral to the concept of reward, as are recognition, praise and career development.

  Perkins, White and Jones (2016, p5), citing Milkovich and Newman write the following, when defining reward, ‘Employee “compensation”, “remuneration” or “reward” (terms used interchangeably in the literature) may be defined as “all forms of financial returns and tangible services and benefits employees receive”.’

  HRM and reward

  According to Pointon and Ryan (2004), ‘reward management’ has often been viewed as the ‘poor relation’ of HRM, being concerned with ‘systems, figures and procedures’. On the other hand, organisations that have adopted the principles and practices of HRM would argue that their reward philosophies are consistent with, and act in support of, other HRM principles and practices. For example, reward policies may need to link with performance appraisal, recruitment, or training and development strategies.

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  Managing Employee Performance and Reward

  Systems, Practices and Prospects

  • John Shields, Jim Rooney, Michelle Brown, Sarah Kaine(Authors)
  • 2020(Publication Date)
  • Cambridge University Press

    (Publisher)

  ‘Reward’ and ‘total reward’ What is a ‘reward’? A reward may be anything tangible or intangible that an organisation provides to its employees either intentionally or unintentionally in exchange for the employee’s potential or actual work contribution, and to which employees as individuals attach a positive value as a satisfier of certain self-defined needs. On this definition, rewards can be seen as including not only financial rewards (i.e. pay, remuneration or compensation) but also rewards of a beneficial non-financial nature. Such a broad definition means that the options for configuring a reward management system are extremely wide. Such a definition also accords with what is commonly referred to in the practitioner literature (e.g. Brown 2014; CIPD 2013; Fuehrer 1994; Kao & Kantor 2004; WorldatWork 2007; Zingheim & Schuster 2000b) as a ‘total reward’ approach. What types of reward fall within the scope of a total reward approach? As figure 1.3 indicates, rewards can be divided into two broad categories: ‘intrinsic’ and ‘extrinsic’. Intrinsic rewards arise from the content of the job itself, including the interest and challenge that it provides, the task variety and autonomy, the degree of feedback, and the meaning and significance attributed to it. It follows that one of the most important determinants of the level of intrinsic rewards in any organisation is the way in which its jobs are designed. Extrinsic rewards arise from the factors associated with, but physically external to, the job that the employee does; that is, from the job context. Extrinsic rewards are of three main types: financial rewards, developmental rewards and social rewards. Developmental rewards cover those rewards associated 14 | Managing Employee Performance and Reward with personal learning, development and career growth, such as skills training and performance and leadership coaching.

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  An Introduction to Human Resource Management

  • John Stredwick(Author)
  • 2013(Publication Date)
  • Routledge

    (Publisher)

  ■ Pay for performance, which is the pay that can vary depending on the performance of the individual, group or organisation as a whole. Adopting skills and competencies come into this group.

  ■ Benefits, which relate to a wide range of ‘extras’ from company cars, private health insurance and share options to sick pay, pensions and holidays. Most are fixed and there is a strong movement towards harmonising most benefits throughout an organisation rather than separate schemes for different groups of employees.

  ■ Recognition pay, which includes special awards for employee achievement. It is less common and is associated with performance but usually operated separately. Many of the rewards take the form of non-cash.

  Indirect rewards consist of:

  ■ Job satisfaction consisting of the intrinsic rewards of carrying out the job.

  ■ Cultural satisfaction, which arises from rewarding relationships with colleagues and working within an ethically satisfying organisation or sector.

  ■ Security, which, although not greatly evident today, still applies in a number of settings either explicitly through long-term contracts or through the nature of the psychological contract between the organisation and its staff.

  ■ Personal growth, including the learning of new skills.

  ■ Career development opportunities and the way they are developed.

  Figure 6.3 Components of the reward package

  Each of these areas will be covered in this chapter. Reward, however, is not just about pay, although this is the major part, and organisations need to develop a balance between the various components. For example, there are some organisations that pay high salaries, based on performance bonuses, but still have difficulty retaining their staff, many of whom are not comfortable with the insecurity and pressure that this brings. Other organisations, perhaps still a small minority, maintain high staff performance without any form of incentive and without high base salaries. They concentrate on ensuring the indirect rewards are of high quality. Later in this chapter, we will examine different aspects of performance pay and benefits. Indirect rewards will be looked at in Chapter 8

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  Managing Employee Performance and Reward

  Concepts, Practices, Strategies

  • John Shields(Author)
  • 2007(Publication Date)
  • Cambridge University Press

    (Publisher)

  A further potential advantage of such rewards is that they can be readily applied to work teams as well as to individuals. The days when non-cash recognition was limited to a gold watch for long service or at retirement are long gone. McAdams (1999: 245–51) identifies seven basic forms of non-monetary recognition in current use: 392 Rewarding employee performance 1 social reinforcers: a pat on the back, respect, positive feedback, staff involvement in planning and decision-making 2 in-house learning and development opportunities 3 merchandise: either pre-selected items of significant monetary value or access to self-selected goods and services by means of shopping vouchers or certificates, retailer-specific debit cards, or printed or on-line catalogues from which specific items can be acquired by accumulating sufficient recognition points over a period (Russell 2004b) 4 travel: all-expenses-paid trips for individuals, families or groups 5 symbolic awards: plaques, personal letters from the CEO, flowers, books, ‘thank you’ notes, publicity in in-house journals or the staff intranet, pins, gold watches, pens and desk-sets, books, CDs and DVDs, restaurant meals, theatre tickets, tickets to sporting events, access to corporate ‘boxes’ at entertainment venues, T-shirts, embossed mugs, company umbrellas or hats, gym or sporting club membership, concierge services, massages, free parking spaces and the like 6 earned time off: time-off with pay additional to normal paid leave enti- tlements 7 flexible or family-friendly work schedules: ability to adjust working hours to fit personal needs and family commitments. McAdams notes (1999: 246) that in the USA merchandise, travel and earned time off are the most popular non-monetary means of recognising outstand- ing performance.

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  Unlocking Human Resource Management

  • Margaret Inman, Nuala O'Sullivan, Adrian Murton(Authors)
  • 2014(Publication Date)
  • Routledge

    (Publisher)

  As you can see, most motivation theories date back many years and so their relevance to today’s work environment, could be questioned. Some believe that motivation in the twenty-first century should be based on a different set of criteria such as friendship, the benefits of work and respect (Reis and Pena 2001). In fact in Mercer’s Global Total Reward Survey (2008) ‘respect’ was rated as the highest factor in employee motivation (80 per cent), followed closely by ‘type of work’ (73 per cent), the ‘people who work with you’ (71 per cent) and ‘work-life balance’ (69 per cent). Pay and benefits were amongst the lowest rated motivators. Despite this, there is a general support for some of the early theories, particularly those of Maslow and Herzberg, as they are seen to provide basic principles on which organisations can motivate and support their employees (Mullins 2008). Being aware of the different motivational theories coupled with more recent research will ensure that the complexity of motivation is not forgotten when deciding appropriate reward strategies.

  Reward systems

  Rewarding people for a good job done should be linked to the values or strategy of the organisation. So if an organisation wants to encourage good customer service then it would make sense to reward those who give good customer service. Similarly those organisations who value teamwork, should reward effective teamworking. The value individuals in the organisation put on different types of reward should also inform decisions of how much and in what form, to reward their employees. Reward is not just about the money paid in a salary. Reward can come in many forms. Financial rewards can be in the form of basic salary, but it can also be through share ownership and financial benefits such as pensions or private health care. People can also be rewarded in non-financial ways such as through recognition, career opportunities or a good quality of working life. Whatever form of reward a company operates, the fairness of how people are rewarded is essential. Any reward system which is perceived as unfair will not be effective and is likely to leave employees disillusioned and demotivated. We will first look at the types of financial reward which operate in organisations.

  4.3	Financial rewards

  Base pay

  This is the amount of money which is paid for a particular job. It is often called ‘payment by time’ where an individual is paid for a specified amount of time at work. This can be based on an hourly rate or as a weekly or monthly salary. There are many different types of pay structures but they tend to fall into two categories, spot pay and graded pay.

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  Organizational Psychology and Organizational Behavior

  Evidence-based Lessons for Creating Sustainable Organizations

  • Steve M. Jex, Thomas W. Britt, Cynthia A. Thompson, Cynthia A Thompson(Authors)
  • 2024(Publication Date)
  • Wiley

    (Publisher)

  Intangible Rewards Although organizations often reward employees with tangible resources such as money and fringe benefits, these represent only a subset of the rewards organizations use to influence employees’ behaviors. Many organizations also recognize employ- ees’ performances with what we refer to as intangible rewards. An intangible reward is defined as one from which the employee does not realize financial or material gain. Although clearly not as powerful as finan- cial rewards, intangible rewards are used frequently and, in many cases, are highly valued by employees. One of the most com- mon intangible rewards in organizations is a combination of recognition and awards. In some companies, recognition and citations come with tangible rewards attached, but the tangible reward is often less meaningful to the employees than the recognition and appreciation that are conveyed. For exam- ple, many organizations formally recognize employees after a certain number of years of service or when they have achieved some change in status, such as a promotion. Awards may also be given out for specific work-related accomplishments such as coming up with a novel work process or a cost-saving measure. Interestingly, there is not much research on these types of rewards. One large organization that uses recogni- tion and awards to a great extent is the U.S. military. The armed services have a hierar- chically structured series of awards ranging from awards reflecting good discipline to the Medal of Honor, awarded for the highest acts of courage and self-sacrifice. When used consistently to reward superior perfor- mance, these awards can be effective moti- vators of service member behavior under extremely stressful conditions. Thomas and Castro (2003) have discussed the fair distribution of awards and recognition in supporting service member motivation, retention, and performance. Britt et al. (2007) also examined job recognition as a predictor of morale among soldiers deployed

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  Managing Employee Performance and Reward

  Concepts, Practices, Strategies

  • John Shields, Michelle Brown, Sarah Kaine, Catherine Dolle-Samuel, Andrea North-Samardzic, Peter McLean, Robyn Johns, Patrick O'Leary, Geoff Plimmer, Jack Robinson(Authors)
  • 2015(Publication Date)
  • Cambridge University Press

    (Publisher)

  239 Part 4 Rewarding employee performance Having considered the main options and processes associated with base pay and benefits, we can now consider the remaining major area of reward practice, namely, performance-related rewards. Also known as ‘incentive plans’, these are rewards that are contingent or ‘at risk’ in some way, rather than being ‘fixed’ or ‘guaranteed’, as is the case with more traditional forms of base pay. For this reason, such rewards are also commonly referred to as ‘contingent’ or ‘variable’ pay plans. Moreover, while many such rewards are financial in nature (i.e. performance pay or cash incentives), performance-related rewards may also take a non-financial form. The six chapters in part 4 offer a detailed coverage of the main types of individual and collective performance-related rewards and of key themes and debates associated with such rewards. Chapter 11 outlines the main types of performance-related rewards, considers some of the general motives for adopting performance-contingent rewards, and overviews the main arguments and supporting evidence for and against such plans. Chapters 12 to 15 examine specific types of performance-related reward plans that are commonly applied to line employees and managers, with particular emphasis on plan usage, strengths and weaknesses. Plans covered include individual merit pay; recogni- tion awards; results-based individual incentives; collective short-term incentives; and collective long-term incentive plans in the form of broadly based employee share plans. While these chapters focus chiefly on ways of recognising and rewarding the per- formance of those who comprise the majority of a typical organisation’s workforce, namely, line employees, supervisors and line managers, middle managers and profes- sionals, the final chapter in part 4 (chapter 16) considers the special case of incentive plans for executive-level employees.

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