Home Human Resources Strategic Reward System | Aims | Approaches | Policies | Practices

Strategic Reward System | Aims | Approaches | Policies | Practices

Reward system is not simply about pay and benefits. It is similarly concerned with non-financial rewards such as gratitude, learning and development opportunities and superior job responsibility.

Strategic Reward System | Aims | Approaches | Policies | Practices  Reward System Strategic Reward System | Aims | Approaches | Policies | Practices strategic reward system
Strategic Reward System | Aims | Approaches | Policies | Practices

Reward system principally deals with the approaches, policies and practices required to make certain that the input of people to the organisation is acknowledged by both financial and non-financial means.

It is about the plan, application and maintenance of reward, which vitally aims at meeting the requirements of both the organisation and its stakeholders.

The general objective is to reward people fairly, impartially and reliably in accordance with their value to the organization.

Reward system is not simply about pay and benefits. It is similarly concerned with non-financial rewards such as gratitude, learning and development opportunities and superior job responsibility.

When people are given greater rewards than what they deserve, at first their performance progresses, but then they start reasoning that they really are worthy and begin to slack off.

Aims of the reward system

  • To reward workforce based on the value they generate for the organisation
  • To bring into line reward practices with business goals and with employee values and desires
  • To reward the right things to deliver the right communication about what is significant in terms of actions and results
  • To support to entice and retain the high-grade people the business requires.
  • To influence people and gain their commitment and assurance
  • To improve a high-performance culture in the organisation.

Achieving the aims

The aims of reward systems are achieved by evolving and applying suitable approaches, policies and practices that aim at delivering justice, impartiality, equity, consistency and transparency in the workplace.

Justice: It refers to how rewards are given to people. It is important to make certain that people have been treated according to the value of their contribution to the organisation.

The key elements including a proper consideration, an adequate explanation, and a valid justification are important to be considered in order to take any decision.

Impartiality: An impartial reward system is one that functions in accordance with the values of distributive and procedural justice.

It fundamentally emphasises to make certain that ‘standard of fair payment for any level of work’ is executed as accurate as possible. According to this particular practice, people should not be given less pay than they deserve by comparison with their fellow employees.

Accounting & Finance

Entrepreneurship

Leadership

marketing

Operations

Strategy

Equity Theory: Equity is attained when people are reward properly in relation to others within the firm. Equitable reward procedures make sure that equal pay is provided for work of equal worth.

Consistency: A consistency approach in reward system is considered to be one of the key aspects of fairness. If your reward system is understood as unfair, it decreases the evaluation to outcome influences because people cannot acceptably expect what results will take place subsequent to high or low performance.

Transparency: Transparency occurs when people understand reward procedures function and how they are impacted by them. Pay transparency provides more information with which to measure the fairness of pay allocation. It furthermore improves the quality and speed of decision making.

As a whole, when people are given greater rewards than what they deserve, at first their performance progresses, but then they start reasoning that they really are worthy and begin to slack off.  In order to avoid pitfalls and attain better results, it is highly essential to be well-adjusted and carefully reviewed.

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