The document discusses the key features of reward management systems, emphasizing the importance of both monetary and non-monetary incentives in motivating employee performance. It outlines various types of rewards, including intrinsic and extrinsic motivations, and the significance of clear communication and timing in implementing effective reward plans. Additionally, it highlights the expectancy theory, which relates the attractiveness of rewards to performance and effort linkages.

1. Reward Management
Mr. Shahab Ud Din
Assistant Professor
DCBM
Integral University
9580624322

2. Rewards
 A reward system has the following important
features:
– an incentive plan may consist of both
‘monetary’ and ‘non monetary’ elements
– the timing, accuracy and frequency of
incentives are the very basis of a
successful incentive plan
– the plan requires that it should be properly
communicated to the employees to
encourage individual performances,
provide feedback and encourage
redirection

3. Financial Non-Financial
Intrinsic Extrinsic
Decision making
Job freedom
Responsibility
Job enrichment
Personal growth
Diversity of activities
Rewards

4. Rewards
Extrinsic Rewards
Financial
Performance based Explicit membership
based
Piece work Group Personal Insurance
Commission Hospitalization
Incentive Sick leave
Performance bonus
Merit pay

5. Extrinsic Rewards
Non Financial
•Office décor
•Preferred lunch hour
•Preferred assignments
•Preferred location
•Secretarial assistance

6. Rewards and Expectancy Theory
According to the expectancy theory the
tendency to act in a particular way
depends upon the strength of an
expectation that the act will be followed
by a given outcome and how attractive
that outcome will be

7. Rewards and Expectancy Theory
There are two variables involved here
Attractiveness of the reward / outcome
Performance - reward linkage—the degree to
which an individual feels that a certain level of
job performance will lead to a certain job
outcome
Effort - performance linkage—the probability
that a given effort will lead to a certain
performance

8. Types of Rewards
Intrinsic vs extrinsic rewards
Financial vs non-financial rewards
Performance based vs membership
based rewards

9. Intrinsic Rewards
 Intrinsic rewards come from the
satisfaction one gets from the job itself
 This satisfaction comes from self-
initiated rewards, such as having pride
in one’s work, having a feeling of
accomplishment, or being part of a team

10. Extrinsic Rewards
 Extrinsic rewards include money,
promotions, or fringe benefits
 For money or other extrinsic rewards
to be used as effective motivators,
they should be made contingent on the
employee’s performance

11. Extrinsic Rewards
 Rewards may enhance the employee’s
financial well being
directly
– through wages, bonuses, profit-sharing,
or indirectly
– through supportive benefits such as
pension plans, paid vacations, paid sick
leave, and purchase discounts

12. Non-financial Rewards
 Non-financial rewards emphasize making
life on the job more attractive
 Care must be taken in providing the
‘right’ non - financial reward for each
person
 For example: a paneled office, a carpeted
floor, or a private bathroom may be just
the office furnishings that stimulate an
employee towards top performance

13. Non-financial Rewards
 Performance-based rewards are
exemplified by the use of commissions,
piecework pay plans, incentive systems,
group bonuses, or other forms of merit
pay plans
 Membership - based rewards include cost-
of- living increases, profit sharing,
benefits and salary increases attributable
to labour market conditions, seniority or
time in rank, or future potential

14. Qualities of Effective Rewards
Significance
Equitable distribution – fairness
Visibility
Flexibility, e.g. annual performance bonus
Low cost—cost benefit of reward

15. Criteria for Determining Rewards
• Performance
• Effort- hard work but average performance
 Seniority
 Skill levels
 Job complexity