Reward systems management
Introduction
When people decide to take up a job, there are various factors they consider such as
working conditions, the reputation of the organisation, training opportunities, and secu-
rity of tenure and perhaps most importantly, reward for the job, that is, how the attrac-
tive the job is in terms of monetary and non-monetary compensation. Although the at-
tractiveness of the reward package depends on personal perceptions, the higher the re-
ward the better the chance of attracting, utilising, and retaining the best human resource
in the organisation. This chapter provides a general overview of reward systems in an
organisation and how managers can use different strategies and techniques to reward
employees as part of the efforts to improve employees’ commitment.
Therefore, at the end of the topic, the learner is expected to:
- Recognise and appreciate various types of rewards.
- Be aware of factors which determine pay packages.
- Use job evaluation methods to determine pay.
- Appreciate the role of effective rreward methods in improving job performance.
Reward management
Under HRM philosophy, rewards are financial and non-financial means used in order to
get the best effort and commitment from the employee as a partner in business. As ob-
served by McKenna & Beach (2002), and rightly so, that while the financial aspect of
rewards relates to extrinsic motivation meant for the satisfaction of basic needs of life,
the non-financial rewards are more intrinsic, in that, they are meant for the satisfaction
of psychological needs including job variety and challenging people, achievement, rec-
ognition, employee development and involvement in determining the affairs of the or-
ganisation. These ideas are well developed by various motivation theories including
Maslow’s hierarchy of needs and Herzberg’s two factor and expectancy theories (Brat-
ton & Gold 2007). Armstrong in all of his works on HRM takes the position that reward