Reward Management Essay Example | Topics and Well Written Essays - 1500 words

Reward Management - Essay Example Unarguably, reward management is a sensitive and controversial area that has been extensively debated at both practical and theoretical levels. 'The significance of pay as a means of attracting, retaining and providing tangible rewards to people is not to be underestimated. It is important to get it right - much harm can be done by getting it wrong. But as a means of generating long-term commitment and motivation, pay has to be regarded as only part of the whole. It is the non-financial rewards that will ultimately make the difference." Michael Armstrong and Duncan Brown Reward structures can speak volumes; not only in their implications of values, equality and worth to the employees and the community they serve, but to the performance of the authority itself. In this context, it is important for the organization to realize that the organizational rewards have many meanings for employees. There are two values associated with every reward - surface and symbolic. The surface value of a reward to an employee is its objective meaning or worth (a measure of spending power of the employee). In addition to the surface value, every reward also has a symbolic value, which is simply the personal or subjective meaning the employee attaches to it. However, a high salary doesn't always mean a high satisfaction with salary! Nor does a rise in salary necessarily translate into a corresponding rise in satisfaction. The DQ-IDC IT-survey of 2004 reveals this very fact . HP, the best paymaster in the industry, has many employees who look dissatisfied with their salary levels. The employees at Siemens also tend to echo the HP employees' views. On the other hand Mindtree, which is near the bottom of the table in terms of size of the packet, has relatively satisfied employees. So does TCS. And Oracle employees are quite satisfied with their salaries despite Oracle featuring quite low on a ctual salaries. It is results like these that make Maslow's hierarchy of needs look like the absolute truth. In short, managers need to tune in to the many meanings rewards can convey - not only to the surface messages but to the symbolic messages as well. Types of rewards Organizations use various types of rewards (listed below) which when combined form the compensation package of the individual. * Base Pay * Incentive systems * Benefits * Perquisites, and * Awards In the Indian context, while the base pay package (the most important rewards people receive for their work) has seen an increase of 11.3%, an interesting feature to be noted is the rising prevalence of variable pay plans. According to the Asia Pacific Salary Increase Survey conducted by Hewitt , a greater proportion of respondents reported having a variable pay plan in 2004 (88.1%) as compared to 2003 (85.3%). Clearly, performance-based pay which was confined to the higher echelons of management is now creeping in to the lower grades as well. Another matter of debate in