Managing rewards

Published on August 30, 2022   9 min
My name is Ronan Carbery, and I'm senior lecturer in management in Cork University Business School, UCC, Ireland. In this video, I'll be talking about reward management.
A critical aspect of the employment relationship involves the management of rewards. An organization's strategy and culture influence reward management, and the reward package impacts employee attraction, motivation, and retention, which in turn are linked to employee and organizational outcomes, including performance. Historically, the concept of a fair day's work for a fair day's pay was a guiding principle and how employees were rewarded for the efforts they put in while at work. While reward management is now significantly more strategic and complex. The fairness of reward policies and practices based on internal and external comparisons remain important. Rewards are used to attract quality of applicants required to drive organizational performance and also retain those employees who contribute to that objective. We will look at the objectives of our reward system and some of the challenges that this presents to employers. We then explore different options and choices for a reward package and discuss how organizations determine the relative worth of jobs. Finally, the role of pay as a motivator is discussed.
The reward system refers to the combination of financial and non-financial elements used by an organization to compensate employees for their time, effort, and commitment at work. This system is shaped by the organization's philosophies, strategy, competition, ability to pay, and legal responsibilities. The objectives of the reward system are to support the organization by designing policies aligned with organizational strategies and goals, to attract and retain employees who add value to the organization by offering an attractive reward package, to motivate employees to perform effectively, to achieve valued organizational outcomes by applying policies in a fair and consistent way, to integrate with other HR policies, including career development and work- life balance, to comply with legislation. Organizations are increasingly focused on rewarding the jobs in employees who add the most value. HR departments are expected to have the line pay policies to the behaviors required to achieve organizational strategy.