Reward management corelates pay and also other benefits to objectives of the company plus the individual. Prize Management features fundamental importance in relation to very good management. With no solid strategy towards prize management, a great organisation is likely to have an disappointed or unmotivated workforce. That covers equally strategy and practice when it comes to pay systems. It has to support the success of the business strategy. The overall aim of praise management is that employees must be rewarded pertaining to the value they create.
Pay is very important to the individual worker, since it is the most important reason why most go to job. According to Milcovich, Newman and Milcovich (2001, p6): " staff may see reward as a come back in exchange among their company and themselves, as an entitlement if you are an employee from the company, or вЂ¦ for any job very well doneвЂќ (original emphases) A great organisation's prize policy has to take consideration of individual needs and what influences worker satisfaction with the needs. There are many ways to prize staff for his or her performance, however it is essential that the members of staff worth the rewards that are on offer. They also have to believe that, in order to obtain a better reward, they should put in a much better performance. Many organisations make use of contingent spend, pay that is related to " performance, competence, skill or perhaps serviceвЂќ (Armstrong, 2003) This kind of results in a number of forms of incentive for the individual. It can be a cash lump sum, which leads to incentives such as added bonus schemes, revenue sharing, and share ownership. Then simply there is a consolidated increase towards the basic level of spend. This can be an bonus which aims to motivate automobile to achieve all their objective and improve their functionality, or it's rather a reward, which offers recognition towards the employee because of their achievement. But the organisation needs to decide which method of contingency pay to use. It can use efficiency, competence, contribution or service related spend. Performance related pay (PRP) means that increases to basic pay or perhaps bonuses will be related to functionality assessment. You will find advantages for this for the individual worker, because it links returns to goals and that rewards accomplishments. It also demonstrates that good efficiency is important to the business, and that it will be paid. However , it can have some down sides to the individual, as it relies on the considering of performance, which can be subjective. The individual staff also has to rely on the management knowing what they are looking for in terms of efficiency. On the whole, PRP can only help the individual once performance inside the organisation could be measured objectively. But it is suitable for an individual who is more likely to be motivated by money. Competence related pay links pay out increases to level of could be competence. This encourages the person to develop their very own competencies in order to increase their advantages. But , much like PRP, it has to rely on the management who also should be educated. Contribution related pay returns the individual intended for both skills and performance. The advantages the individual, because they are rewarded for not only what they do, but how they do it. But it suffers from similar disadvantages since both PRP and contribution related pay out. The last form of contingent pay is support related pay. This is when pay out is related to the size of service someone has dished up. This has a plus for the as it eradicates the possibility of the bias by line managers which affects the previous shell out schemes. But it really means that most people are treated similar, regardless of how well that an person does. This pay system treats everyone the same, although does not advantage the individual who feels they may have worked above and beyond their work. It could bring about employees performing the bare minimum, as they realize that the for a longer time that they work for the business,...
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