Reward management is concerned with the formulation and implementation of strategies and policies in order to reward people fairly, equitably and consistently in accordance with their value to the organization. It deals with the development of reward strategies and the design, implementation and maintenance of reward systems (reward processes, practices and procedures) which aim to meet the needs of both the organization and its stakeholders. Reward can be regarded as the fundamental expression of the employment relationship.
Thus we can shortcut purpose of reward management in:
• Reward people according to what the organization values and wants to pay for.
• Reward people for the value they create.
• Reward the right things to convey the right message about what is important in
terms of behaviors and outcomes.
• Develop a performance culture.
• Motivate people and obtain their commitment and engagement.
• Help to attract and retain the high quality people the organization needs.
• Develop a positive employment relationship and psychological contract.
• Align reward practices with both business goals and employee values; as Duncan
Brown (2001) emphasizes, the ‘alignment of your reward practices with
employee values and needs is every bit as important as alignment with business
goals, and critical to the realization of the latter’.
• Operate fairly – people feel that they are treated justly in accordance with what
is due to them because of their value to the organization (the ‘felt-fair’ principle
of Eliot Jacques (1961).
• Apply equitably – people are rewarded appropriately in relation to others within
the organization, relativities between jobs are measured as objectively as possible
and equal pay is provided for work of equal value.
• Function consistently – decisions on pay do not vary arbitrarily and without
due cause between different people or at different times.
• Operate transparently – people understand how reward processes operate and
how they are affected by them.
thanks
ReplyDelete