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Unit v final

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  • 1. Unit-5 REWARD SYSTEM DEFINITION  Reward Management is about the development, implementation, maintenance, communication and evaluation of reward processes.  These processes deal with the assessment of relative job values, the design and management of pay structures, performance management, the provision of employee benefits and pensions.
  • 2. OBJECTIVES  What the organization values and want to pay for  The value they create for their organizations  The right behaviors and actions of the employees in order to reinforce appropriate behaviors and outcomes  Foster and maintain a high performance work culture  Motivate employees in order to obtain their commitment and engagement
  • 3. OBJECTIVES  Attract and retain talents the organisation needs  Emphasize the right mix of financial and non- financial rewards  Develop a positive employment relation and psychological contract  Align reward practices with the business strategy of the organisation and communicate business values and direction to employees  Operate in ways that are fair, equitable, consistent and transparent.
  • 4. COMPONENTS  Financial reward – Salary, Wages, Incentives, etc.,  Non-financial reward – Medical Insurance, Life insurance, subsidized canteen, subsidized transport, free uniforms, interest free loans, etc.,  Psychological satisfaction – Social interactions with others in the workplace, job training, career advancement opportunities, recognition,
  • 5. DIMENSIONS  Intrinsic Reward – Psychological reward that is experienced directly by an individual. Ex: Feelings of accomplishment, Increased self-esteem, satisfaction of developing new skills, sense of fulfillment, etc.,  Extrinsic Reward – A reward that is provided by outside agent, such as a supervisor or work group. Ex: Bonus, promotions, increase in salary, perks, appreciation or praise, etc.,
  • 6. CONSTRAINTS  Statutory compulsions  Industry wise wage boards  Operative long term settlements  Lack of mutual trust  Lack of visional and innovative approaches  Lack of commitment  Lack of system  Fear on personal authority
  • 7. LINKAGE BETWEEN THE REWARD AND PERFORMANCE Value of reward Received Effort-reward probability Efforts Abilities and Traits Task Perceptions Performance accomplishmen t Intrinsic Reward Extrinsic Reward Satisfaction
  • 8. IMPLICATIONS FOR MANAGERS  Determine the rewards valued by each subordinate.  Determine the performance desired  Make the performance level attainable  Link rewards to performance to maintain motivation  Analyze what factor might counteract the effectiveness of the reward
  • 9. IMPLICATIONS FOR ORGANIZATIONS  The organisation’s reward system must be designed to motivate the desired behaviour and results.  The jobs should be designed to the employees to fulfill some of the higher needs such as independence or creativity  The immediate supervisor has an important role in the motivation process. He has to trained in the motivation process and given enough authority to administer rewards.
  • 10. MONETARY AND NON-MONETARY REWARDS MONETARY REWARDS NON-MONETARY REWARDS  Salary increments  Promotions with increments  Paid up insurance  Loans  Transport(Car/Two Wheeler)  Telephone  Profit sharing  Free Lunch  Picnics  Dinner with boss  Birthday treats  Trophies  Certificate  Letter of Appreciation  Vacation trips  Special Leave