1 Introduction to Reward Management
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Transcript of 1 Introduction to Reward Management
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INTRODUCTION TO REWARD
MANAGEMENT
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Meaning of Reward
Management Reward management deals with the
strategies, policies and processes
required to ensure that the
contribution of people to theorganization is recognized by both
financial and non-financial means.
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Reward Management
Reward management is about thedevelopment, implementation,
maintenance, communication, and
evaluation of reward processes.
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Characteristics of Reward
Management1. Reward Management and People
Individual, group, employer
satisfaction
2. Stakeholder Approach
3. Integrated Reward Management
Integration of corporate, personnel and
reward strategies.
Resources
Employees Development
Or anizational Effectiveness.
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Characteristics of Reward
Management4. Strategic Reward management
5. Evidence-Based Reward
Management
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Areas of Reward
Management1. Non-Financial Rewards
2. Employee Benefits- pension plan
3. Pay Structures- wage and salary
4. Performance Management and
Measurement
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Significance of Reward
Management
1. Reward as source
of Organizational
effectiveness
2. Reward asmedium between
organization and
employees
3. Reward asavenue of multiple
motivations
fulfillment
6. Reward as a
source of
differentiation
7. Reward as sourceof employee
involvement
8. Reward as source
of innovation
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Significance of Reward
Management
4. Reward as factor
of motivation
5. Reward as
performance guide.
9. Reward as source
of competitiveness
10. Reward as
source oforganizational
harmony.
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Project
Find out non financial reward given byat least 3 companies.
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This resource is part of a range offered free to academics and/or students using Armstrongs Handbook of Reward Management Practice, 3rd edition, as part of their course. For more academic resources and
other FREE material, please visit www.koganpage.com/resources and then click on Academic Resources.
THE REWARD MANAGEMENT FRAMEWORKPrimary aims:
Support achievement of
business goals
Develop performance culture
Reward people fairly
Fundamental concepts:
Resource-based view
Human capital management
HR process advantage
Motivation theory Principal agent theory
The psychological contract
Total reward
Financial rewards:
Contingent pay
Benefits
Performance management
Manage rewards:
Plan
Evaluate
Control
Strategic integrated reward:
vertical integration
with business strategy
horizontal integration
with other HR strategies
internal integration
of reward practices
Contextual factors:
Internal: culture, sector,
technology, people, social
and political pressures
External: globalization,
market pay, unions,
legislation
Engage people:
job design
work system
leadership
reward
Value jobs:
internally
equitable
externally
competitive
Non-financial rewards:
Recognition
Learning and
development
Work environment
High performance
work system
Pay level concepts:
Economic theories of
pay
Principal agent theory
Human capital theory
The effort bargain
Tournament theory
Equitable pay
Job evaluation
Market rate analysis
Grade and pay structure
http://www.koganpage.com/products/armstrongs-handbook-of-human-resource-management-practice/HumanResources/H/Human_Resources_Management/H001/1002602/9780749452421/http://www.koganpage.com/products/armstrongs-handbook-of-human-resource-management-practice/HumanResources/H/Human_Resources_Management/H001/1002602/9780749452421/http://www.koganpage.com/resourceshttp://www.koganpage.com/resourceshttp://www.koganpage.com/products/armstrongs-handbook-of-human-resource-management-practice/HumanResources/H/Human_Resources_Management/H001/1002602/9780749452421/http://www.koganpage.com/products/armstrongs-handbook-of-human-resource-management-practice/HumanResources/H/Human_Resources_Management/H001/1002602/9780749452421/ -
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Aims/objective of Reward
Management1. To improve organization performance
2. To encourage value added
performance
3. To support the management of theorganizational culture
4. To achieve integration
5. To support management
6. To empower individuals and teams
7. To compete in the labor market
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Aims/objective of Reward
Management
8. To motivate
9. To increase commitment
10. To achieve fairness and equity
11. To support new developments
12. To enhance quality
13. To promote teamwork
14. To encourage flexibility
F i fl i hi
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Factors influencing achievement
of aims
Contextual Factors
1. Internal Context
2. External Context
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Contextual Factors
Internal Context
1. Corporate culture
2. Strategy and
rewards3. Structure and
rewards
External Context
1. Globalization
2. Employment
trends3. Demographic
trends
4. Rates of pay inthe marketplace
5. employment
legislation
6. Trade union.
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Fundamental concepts
1. Resource based view
2. Human capital management
3. Human process advantage
4. Motivational theory5. Instrumentality theory
6. Content (needs) theory
7. Process theory8. Cognitive evaluation theory
9. Principal agent theory
10. Psychological contract
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1. Resource based view
1. Financial Resource
2. Physical resource
3. Human resource
4. General organizational resources
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2. Human capital
management Human capital management is an
integrated effort to manage and
develop human capabilities to achieve
significantly higher levels ofperformance.
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3. Human process advantage
Human resource plays a key role indeveloping the processes and
providing guidance to mangers on
their implementation.
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4. Motivation Theory
Intrinsic motivation
Extrinsic motivation
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5. Instrumentality theory
Money acts an instrument to achieveends.
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6.Content (needs) theory
All behavior is therefore motivated byunsatisfied needs
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7. Process theory
It focus on how behavior changes andperson comes to behave in a different
way.
Behavior change is rewarded.
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8. Cognitive evaluation theory
Monetary rewards decreases theinterest of people in the work. Ie
extrinsic reward erode intrinsic
interest.
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9. Principal agent theory
Employees (agent) and employer(principal )
Employee- Pay
Employer- more work.
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10. Psychological contract
Employees perception andpsychology
Treatment
Security
Pay Career
Employers perception and
psychology Competency
Effort
Loyalty
commitment
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Effective Reward
Management1. Focus on alignment
2. Ask employees what they want
3. Measure and manage costs and
risks
4. Strengthen performance
management system
5. Sharply differentiate between topperformances and everyone else
6. Make greater use of incentive based
pay
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Effective Reward
Management7. Review incentive funding metrics and
targets
8.Make communication and education a
priority9. Use long term incentives throughout
the organization
10. Manage rewards in a trulyintegrated way
repare y : ss ro ru
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repare y : ss . ro . ruDaruwala
Sigma Institute of Management Studies
