REWARD MANAGEMENT

Reward management is referred to formulation and implementation of

strategies and policies that are aimed to reward people fairly, justly and in
accordance with their position in the organisation.

About Rewards
Reward management is a good motivational practice that companies use in
order to reward their employees for their success and achievement. The
company sets their goals and authorizes rules for their employees so that they
can follow and achieve those set goals.
This makes sure that the employees are completely aware of the rules and goals
and they receive their rewards for their performance. All employees follow the
generic reward system as it is a just system.

Having a wonderful reward system helps keep employees satisfied, happy and
loyal to the company. They stay eager to take more steps and climb up the
ladder and reach a mightier place within the company.
Rewards like additional pay and public recognition motivate employees so that
they can work harder. Using software in place to track the employee
performance empowers the employee and the employer to monitor the progress
and identify when goals are achieved and rewards are earned.

Types of Reward Management

1. Extrinsic Rewards: Extrinsic rewards satisfy the basic needs like bonuses,
salary raise, gifts, promotion in job etc.

2. Intrinsic Rewards: These rewards focus on satisfying higher level needs

like development and esteem. These may include Recognition by the
management, the employer entrusting/empowering its employee or highly
positive feedback.

3. Individual Rewards: Includes basic pay/salaries, incentives, rewarding

attendance, performance, competence, and other benefits.

4. Team Rewards: Includes team benefits and reward groups cooperation.

5. Organisation may include profit sharing, gain-sharing and revenue sharing in
case of organisation earning high profits for a particular year.

Objective of Employee Compensation in HRM

1. Support the company’s strategy

2. Recruit & retain
3. Strengthen psychological contract
4. Motivates the employees to a greater extent
5. Comply with legislation
6. Financially sustainable
7. Retaining the employee
8. Attracting new employees
9. Encouraging positive attitude
10.Encouraging honesty and loyalty
11.Provoke employees to seek advancement
12.Help strengthen company’s reputation

Therefore, management of reward in a company helps to motivate and retain

employees in the company itself.
Compensation system is an important aspect of HRM as a well-designed reward
system always leads towards company’s productivity and employee satisfaction.
Also, reward management is a unique process of implementing, creating, and
controlling a fruitful reward system in the company which helps to improve and
maintain company’s performance. It observes the strategic purposes
of motivating, attracting, and sustaining the employees.
Reward management is a critical aspect of Human Resource Management and
revolves around development, designing and implementation of appropriate
salary system. This system surely helps improve company’s performance and
keep employees motivated at work.