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  • 1. Unit-5REWARD SYSTEMDEFINITION
    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
    • 3. The value they create for their organizations
    • 4. The right behaviors and actions of the employees in order to reinforce appropriate behaviors and outcomes
    • 5. Foster and maintain a high performance work culture
    • 6. Motivate employees in order to obtain their commitment and engagement
  • 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.
  • 7. 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,
  • 8. 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.,
  • 9. 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
  • 10. LINKAGE BETWEEN THE REWARD AND PERFORMANCE
    Value of reward
    Abilities and Traits
    Intrinsic Reward
    Efforts
    Performance accomplishment
    Satisfaction
    Extrinsic Reward
    Received Effort-reward probability
    Task Perceptions
  • 11. 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
  • 12. 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.
  • 13. 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