Reward System

Reward System

Introduction

Human resource management is a systematic and strategic approach towards incorporating competitive workforce for the organization. For an organization, employee is the most valuable asset. To recruit and select effective workforce, the management need to incorporate an affective system that determine and evaluate that best in the interest of the organization. Integration between the operation and people within the organization help in performing effectively. Nowadays, Human resource management is incorporating strategies that drive a performance based system. The performance based system orient high performance because the employee knows that they are been continuously evaluated. Competitive reward systems are established in accordance to the performance levels delivered. It has been evident from the past that the employee performs better when considered an integral part of the organization (Armstrong, 2007).

Reward System in an Organization

In the former organization, used to spend money on making an environment that can make employee perform better with better productivity. But the concept has changed all together in this facts pace century today employee performance should be recognized and rewarded that leads to constant and better performance. The main responsibilities lies on the leaders shoulder to understand & implement on how performance can be evaluated and rewarded. Money is not the only mean to reward a good performer and performance. There is always something that money cannot do. Appreciation and large of praise sometimes act more effective in comparison to monetary rewards and recognition. The main thing is to incorporate which type of reward serve better for which employee for which sort of performance. Management needs to build strong understanding of distinguishing and recognizing the type of appraisal for every employee (Armstrong, 2007).

Types of Reward & Remunerations

At present, the approaches towards rewards and recognitions' have changed immensely. The prevalent economic climate and the fast changing pace of the business should align with the reward system. An appropriate reward system is one which motivates and influences the employee to work more than expected. Their performance is valued through rewards. Rewards in an organization come in the form of monetary reward non monetary rewards, recognition, appreciation and promotions. These rewards work as motivators for driving best performance out of an individual. The rewards that the organization offered are in general divided into two bases;

Monetary Reward

The monetary rewarded are delivered to the employees in the form of financial rewards offered in exchange of the service rendered them. The amount of financial reward given in exchange of work performed depends upon the quality and quantity of the work performed. Performance based reward system runs in deciding the monetary reward. Various types of monetary rewards offered are as followed; (Heskett, 2012).

Variable Pay

Variable pay also known as pay for performance is a type of compensation program offered to the employees in exchange of the work performed. This type of compensation program makes some part of employee pay portion at risk. The variable of which the variable pay portion of the individual is aligned varies from person to ...