REWARD STRATEGY - GENERAL MANAGER

Reward Strategy - General Manager



Reward Strategy - General Manager

Bonuses are used, particularly in City Institutions, as the core way of motivating and recruiting staff.  Indeed, in the newspaper article of 26/7/07 Ian Davidson, head of compensation and benefits at Commerzbank states that they are “the only way to retain talented staff”. In this essay we will explore the theories of motivation.  We will then look at reward policy, linking this particularly to retention.  Concepts used in the essay come up in different sections.  This is because motivation and retention are interlinked- if motivation can be improved, so will retention. And because a reward system is designed to affect both, an effective reward system will rely heavily on the theory of motivation.

Retaining and motivating employees are two of the most difficult tasks for any company Boyens, John.2007 (p59). Motivating staff is the principal key to success of teams, departments and companies. The employee should feel deeply committed to management and the company in order to put their best efforts to achieve peak performance. To motivate the employees, leaders must first understand the reasons behind employee behaviour. By recognizing the nature and behaviour of employees, a range of methods of communication, training, reward and motivation can be chosen. (Bossé-Smith, 2005 (p22) 

Motivation, to link to Maslow's Hierarchy of Needs and elaborated by Hertzberg (Taylor, 2006), does require a hygiene factor of how far the job meets their requirements in terms of income to satisfy the basic physiological needs.  However, Money is a not the top motivator as it actually doesn't encourage the employees to put forth their best efforts. In order to ascend the “pyramid” towards “self actualisation” more is needed to facilitate the fulfillment of the “ego” and “love” needs. The primary need for employees is to feel that their individual contributions are both important and recognized.  This feeling can be met by various means - both in the way people are managed on a day-to-day basis, and in the way the reward system is designed.

Reward system design can be a powerful reinforcer to the above. Reward management is mostly concerned with the benefits given to the employees in return for working for an organisation.  Along with the evolution of personnel management into Human Resource Management, it has changed from a focus on just pay to something more encompassing, designed to both recognise contributions and reward achievement. Reward systems can be classified into two; intrinsic and extrinsic rewards. 

Intrinsic rewards concern work design, aiming for a job that is both fulfilling and contributing to an individual's self esteem.  This has had major attention from theorists, particularly Herzberg, with a belief that through job design, work can be “enriched”, evolving into the concept of a “high performance work system”.  Herzberg claims that pay, working conditions and supervisory style are but “hygiene factors” (potential demotivators if lacking).  To actually motivate, the job content needs to contribute to the individual's feelings of achievement, advancement and growth though recognition and ...