Reward System For Employees
When an employee works hard enough, a company or management is expected to give something in recognition of his or her service, effort or achievement. A Reward system is used to increase employees' productivity, how much work they get done and how effective they are to the organisation. It sets out to attract and retain employees that fit the job, and bring value to the establishment as a whole. It also reduces every form of tension and conflict between employees and the organization. For an organization to keep its shareholders, employees and society happy, its top management must develop a relationship betwreward system 3een the organization and employees that will keep the management's performance at its optimum.
Most organizations have this belief that the reward system is designed to pay off for merit. Some define merit as 'deserving', while to others, merit is 'achieving excellence'. Deserving rewards may take into consideration such factors as how intelligent he or she is, the effort they put in or seniority in position. Rewards should be determined by the following;
Performance: A difficult issue with performance is differentiating between quantity and quality. If an individual performs at more hours, the management should not reward based on the amount of hours put in, but the quality of the work that is put in.
Effort: The rewarding of effort represents the classical example of rewarding means rather than the ends. In many cases, effort can count more than actual performance. The employee, who can show his effort, without really putting one, will stand to be rewarded more than his sincere counterparts.
Seniority: Seniority dominates most government organizations in the world, and while they do not play an important role in business organizations, there are evidences that length of time on the job is a major factor in determining the allocation of rewards. In comparison to other criteria of reward, it is easiest to measure how long someone have worked for an organization.
Skills Held: Another practice that is not common in organizations is to allocate rewards on the basic skills of employees, regardless of whether the skills are used. Those individuals who possess the highest skills or talents will be rewarded commensurately.
Job Difficulty: those jobs that are highly repetitive and can be learnt more quickly may be viewed as less deserving in reward than those that are more complex and sophisticated. Jobs that are difficult to perform, or are undesirable due to stress or due to unpleasant working conditions, may have to carry with them rewards are higher in order to attract workers to these activities.
Advantages of rewarding staff include:
Healthy Competition: Employee incentives can generate healthy competition between individuals or teams of employees within a company. If only a certain number of employees receive incentives based on individual or group performance, this can make everyone work harder if the incentive is compelling enough. Also, commission schemes, which are another type of incentive, can motivate sales staff to work smarter and harder, because a significant portion of their pay depends on performance incentives.
Retention: Intelligently designed incentives can be a plus to companies looking to retain employees for the long term. Lucrative incentives, whether these are in the form of stock or bonuses, make it worthwhile for employees to stay at your firm, even if a salary offer from a competitor is more attractive. Incentives can also make employees feel as if their hard work is appreciated, thus reflecting well on their managers and the company as a whole.
Disadvantage of rewarding employee.
Resentment: Where the employees who work the hardest always reap the most rewards, incentives pose little problems. Companies operate in an ideal world and thus incentives can breed resentment and disharmony among teams and employees. While it's easy to quantify a salesman's performance, it is harder to quantify a staff writer's contribution to the department, even if the writer is adding just as much value to the company. This can lead those under an incentive scheme to feel unappreciated or the recipients of unfair treatment.
- Increased Costs: Giving gifts to employees' increase business costs. Whether the gift is a cash bonus or a physical object, money must be used to cover the cost of the gift, and this cuts into business profits and may become a significant expense if gifts are given to a large number of employees or are given multiple times within the same financial year.
- Planning and Execution: In addition to the cost of giving gifts to employees, time must be set aside to plan and execute the giving of gifts. If the gifts are a performance-based incentive, the performance of employees must be evaluated before the gift can be given. Even if the gifts are for all employees regardless of performance, the purchasing, preparing and distribution of the gifts takes time. Time must also be spent determining the procedure for getting the gifts and deciding who in the company is qualified and impartial enough to set those criteria fairly.
Significant examples of reward incentives are:
Taking Care Of The Family: The Company can decide to take care of the family if one of their staff suddenly loses his or her life. For example Google pays the spouse of a deceased employee 50% of the spouse's salary every year for the next decade, no matter how long or short the tenure was.
- Giving Free Vacations: this incentive is most common with the top 100 companies in the world. For example, an organization may decide to treat workers to a free vacation every two years.
- Big Money Incentives: A company can promise staff that if the company doubles its production rate and reserves, every employee will get a cheque for $100,000.
- Saying Thank You! : Often times, employees just want to be recognized for their good work. A simple "Good Job" from the CEO can go a long way. Getting a call from a senior executive and other top ranked employees just to say thank you can go a long way.
- Keeping Employees Healthy: Using a credible medical center that provides primary care, wellness exams, complete physicals, vaccines, and lab tests at little or no cost to employees.
- 6. Having Fun at The Office: Playing board games at the office in the final three hours on a Friday can be reward for getting the job done during the week.
- Employee Appreciation Week: A company can host an annual six-day appreciation week; that includes theme park visits, film showings, skating, and daily giveaways.
- Immediate Vacation Time: A company can enhance its vacation policy by giving new employees three weeks off in threward system 2 anthonyeir first year instead of having to wait five years.
- The Monthly Hero: This can be given to the most hardworking staff for the month. A Gift bonus in a credible shop, beauty salon or restaurant can be given to the individual. The person's picture may also be put on the wall framed "the hero of the month".
A reward system is best when there is someone that gives a feedback to the top management on everybody's output in the organisation. When this occurs, no one feels left out and cheated on the incentives generally being offered to employees.