HRM: The Importance Of Reward

Importance of Reward

Rewards can be given based both on individual and group performance. The organization has a combination of these two, which all respondents were in favour of in some way. A large company does not exist of only one person; it is about collaborating among the employees. Group performance often leads to greater affinity among the co-workers. A great result and profit are not usually made by one person but often a group, many times making a group- based reward more suitable. Reward constitutes an important element in HRM. They perceived the reward as more general than performance based meaning that the bonus is too difficult to influence, wishing it to be more performance based. Short term is defined over periods of one year

The design and operation of reward management processes and practices should start from an understanding of the implications of the psychological contract concept, motivation theory and the factors affecting pay levels. These needs are most likely to be met if reward processes are based on an articulated and integrated approach to the development of a frame work of reward philosophies, strategies and policies that will support the achievement of the organization’s business strategies, as well as acting as levers for change. Reward exceptional performance which should be appreciated by employees. From the company’s perspective the possibility of risk-sharing is an advantage which makes compensation follow the company’s performance. That the rewards are due to exceptional performance is not an opinion shared with our respondents. Throughout this study we have examined if a reward system is motivating and if

The frame of reference says that performance and rewards are linked together by goals and an assessment of how they are achieved. Company uses both financial and nonfinancial goal to do this. The financial measures tend to be short-termed while the non-financial usually has more long-term perspective. References state that it is important to find a balance between realistic and challenging targets for them to be stimulating and not de-motivating. The goals are set in a dialog between the manager and the employee. The managers thought that the salary was the most important part of the reward system whilst the bonus and shares were seen as extra. According to Herzberg money is seen as a