1. Employees who are satisfied with their jobs are more likely to
perform better than those who are unhappy in their jobs. That's
why for companies, it is important to create an atmosphere in
which employees feel appreciated and have opportunity to
advance.
PERFORMANCE APPRAISAL & REWARD SYSTEM
Employee recognition programs can boost the morale (confidence) of
employees and positively change the health of an organization. By
introducing performance appraisal and reward systems, an
employer lets its workers know that their hard work plays a vital
role and is appreciated.
2. BENEFITS
When employers praise their employees’
performance it is almost always a beneficial and
positive experience for both the manager and the
employee. Appraisal enhances motivation, keeps
employees goal-oriented and morale high. With
high morale and a feeling of worth, employees will
want to exceed in the workplace.
3. A reward system is the standards, rules and procedures associated with the
compensation and allocation of benefits or rewards to employees for a job well
done. It also refers to the collection of brain structures that try to control and
regulate behaviour by encouraging pleasure.
TYPES OF REWARD PROGRAMS
There are a number of different types of reward programs aimed at both individual
and team performance.
1. VARIABLE PAY: Variable pay or pay-for-performance is a compensation
program in which a portion of a person's pay is considered "at risk." Variable
pay can be tied to the performance of the company, the results of a business
unit, an individual's accomplishments or any combination of these. It can take
many forms, including bonus programs, stock options and one-time awards for
significant accomplishments.
4. 2. BONUSES: Bonus programs have been used in American
business for some time. They usually reward individual
accomplishment and are frequently used in sales organizations
to encourage salespersons to generate additional business or
higher profits. They can also be used, however, to recognize
group accomplishments.
Bonuses are generally short-term motivators and perfectly
legitimate means of rewarding outstanding performance, which
can actually be a powerful tool to encourage future top-level
efforts.
5. 3. PROFIT SHARING: Profit-sharing refers to the
strategy of creating a pool of monies to be distributed to
employees by taking a stated percentage of a company's
profits. The amount given to an employee is usually
equal to a percentage of the employee's salary and is
paid after a business closes its books for the year.
6. 4. STOCK OPTIONS: Employee stock-option programs give employees
the right to buy a specified number of a company's shares at a fixed price
for a specified period of time (usually around ten years). They are generally
authorized by a company's board of directors and approved by its
shareholders. The number of options a company can award to employees is
usually equal to a certain percentage of the company's shares outstanding.
Like profit-sharing plans, stock options usually reward employees for
sticking around, serving as a long-term motivator. Once an employee has
been with a company for a certain period of time (usually around four
years), he or she is fully vested in the program. If the employee leaves the
company prior to being fully vested, those options are canceled.
7. 5. Group-Based Reward Systems
As more small businesses use team structures to reach their goals,
many entrepreneurs look for ways to reward cooperation between
departments and individuals. Bonuses, profit sharing, and stock options
can all be used to reward team and group accomplishments.
Group-based reward systems are based on a measurement of team
performance, with individual rewards received on the basis of this
performance. While these systems encourage individual efforts toward
common business goals, they also tend to reward underperforming
employees along with average and above-average employees.
8. 6. Recognition Programs
For small business owners and other managers, a
recognition program may appear to be merely extra effort
on their part with few tangible results in terms of
employee performance. While most employees certainly
appreciate monetary awards for a job well done, many
people merely seek recognition of their hard work.
9.
10. The field of organizational behavior involves
the study of individuals' behavior in the
workplace. Skills specific to effective
workplace interaction, as well as general
psychology skills, can be highly useful to
managers in supervising their employees and
maximizing their potential.
11. Effective interpersonal communication skills are crucial for a manager
when interacting with his employees. Employees need to clearly understand
what is expected of them, which can be accomplished verbally or through
the use of handout materials to communicate key points.
Managers may choose to incorporate an open-door policy as a way of
establishing strong communication with their employees. Open-door
policies "seek to encourage employees to bring issues forward for
resolution,". This type of policy keeps the lines of communication open
between a manager and his/her employees, and helps employees feel that
their thoughts, opinions and suggestions are valuable to their manager.
12. Assessing employees' individual personality is a
valuable skill for managers. Each personality type
has its own strengths and weaknesses, and the
ability to identify them among employees, allows
a manager to effectively interact with and
delegate tasks to employees, as well as perform
efficient planning and team building, when
necessary.
13. Managers need to have the ability to provide effective
training to their employees. One-on-one instruction or
group training can be conducted, depending on the
situation and material presented. In cases where
corrective training or retraining is needed, managers can
employ constructive feedback techniques to remedy the
situation, or possibly assign a coach or mentor to the
employee to help rectify the problem.
14. Determining effective motivation techniques for
employees is also a significant managerial skill. Here,
employees' personalities can again be considered to
ascertain what types of incentives will motivate
employees to their peak performance, for example, by
determining whether an individual employee is
intrinsically or extrinsically motivated.
15. Managers need to be able to effectively defuse
tensions or disagreements when they arise.
Objectivity and sensibleness are key for managers
as they approach the issue, assess all aspects and
points of view, and, if possible, create a win-win
resolution to the problem at hand, one in which
no employee feels as if he is on the losing end of
the solution.
