Reward Management Theories

recognize Management Theories proceeds instruction has been described as a key function in HRM systems in modern compositions, and it is often designed to attract, retain and motivate employees (Milkovich and Newman, 2004 cited in Yu, Ying ying and Angeles, 2011, pp 2). Because of the strategical nature of human resource in the attainment of unified goals and organisational competitiveness (Wright and McMahan, 1992), many authors fill discussed the subject of pay steering from assorted perspectives. Some of these perspectives focus on dividing avenge systems into dickens categories inessential and intrinsic reinforces. Extrinsic honour systems generally focus on whirl murder-linked salary increases, monetary reenforcements, long term incentive forges, team-based rewards, and security benefits to employees (Laursen and Foss, 2003). These authors postulate in favour of the nurses of these types of reward in boosting the morale of employees and improve their produc tivity as the same fourth dimension.The result of this to the scheme is better supply line performance through increased revenue and profitability (Yu, Ying Yang and Angeles, 2011). indispensable rewards ar non-monetary rewards and could come in form of enriching duty responsibility and authorization (Oldham and Cummings, 1996), providing training resources and comprehensive learning opportunities (Hennessey and Amabile, 1998), and maintaining good interpersonal relationships among employees (Ruppel and Harrington, 2000). Yu, Ying and Angeles (2011) identify both reward counselling perspectives based on the above classification and they bellow extrinsic reward systems, utilitarianism and intrinsic reward systems, romanticism. According to these authors, these ar the two highly debatable theories of reward counselling in the HRM field. One of the introductory assumptions central the theories of reward management is that the performance and motivation of employees can be improved by establishing a link mingled with efforts and rewards through adjudge and specific individual targets (Fay and Thompson, 2001).Although many authors and writers train established that there ar enormous benefits for organizations in putting in a place an impressive reward management system, some authors still warn against over-reliance on reward systems because of its potential to create several organizational issues which focus on righteousness and diversity (Beer and Cannon, 2004). Many other authors have critically examined the underlying philosophies of reward management and the variables that make up a typical reward mix. Baeten (2008 cited in Jonathan and Cl be, 2011, pp 2) provides a deeper insight into this when they argue that there are 34 different possible theories underlying a reward management system. Eisenhardt (1988 cited in Jonathan and Clare, 2011, pp 3) moreover limits reward management theories to two namely The agency theory and the institutio nal theory. Agency theories of reward management basically seek to align organization and individual objectives. The main aim is to use incentives to direct employees towards the interests of the owners of the business, and to design the reward mix to reflect that. On the other hand institutional reward management theory focuses on the formal and informal pressures exerted on organizations by other organizations with which it is connected. Some of these pressures could come in form of employment legislations, profound requirements, tax policies, and a desire to guide the policies that others have adopted so as to gain the security that conformity is perceived to bring (DiMaggio and Powell , 1991). lastly other known theory of reward management under the institutional classification is normative pressure. This occurs when members of an organization collectively come together to subtend the conditions and methods of their works.4 The design of insurance insurance insurance and spate of proceduresHP operates in a highly competitive industry with a peculiar high supply turnover rates. Employees are often influenced by competitive reward policies that bring to the attainment of their personal development goals and objectives. Kerr (1999) argues that rewards should be the third thing in an organization measurements should be second, and clear articulation of the desired outcomes should be the first. In designing a reward polity for HP the following are the key objectives to be attained4.1 Policy statementHPs goal is to attract and retain the nigh talented workforce which are strategically connected to the organizations ability to meet its strategic goals and objectives. With this in mind we seek to offer a combination of the most competitive and flexible financial rewards in the US mobile and computing device industry to all cadres of employees immediately they join us. We believe that this is important to the sustentation of our actual leadership posit ion in the industry and we seek to follow up on this policy as doggedly as possible with all luridness and equity.4.1.1 ProceduresAimThe central aim of this policy is to enable enhance HPs ability to recruit the most talented experts in the US mobile and computer technology industry which we consider as strategic to the achievement of our corporate goals and objectives.ScopeThis financial reward policy shall have got to all regular full time and regular part time employees of HP immediately they join the club.PrinciplesThe entire reward policy of this company shall be built on a foundation of e character reference, commitment to diversity, achromasia and a sense of good judgementThe entire reward policy exit be operated as fairly as possible and it will be made to comply with national regulatory frameworks for employee interlock in the computer and mobile technology industryAll categories of employees that contribute more by measure of productivity shall be financially rewa rded more. HP shall non take any extra contribution of any employee for granted. We believe that is decisive to fulfilling our commitment to equality and fairness.ResponsibilitiesRoleAccountabilityRewards teamEnsuring that financial policy reward activities are firmly in place and monitoring that the underlying principles of the reward are upheldHR Director and HR leadership teamProviding control initiatives in situations where the principles of the policy are not upheldSenior management groupEnsuring the proper alignment of HPs corporate system and the reward policy4.2 Correspondence to relevant national legislationThe US department of proletariat has established regulations regarding employees salaries and wages in place. One of such regulations is the fair labour standard Act of 1938 which is administered by the wages and minute of arc division. This Act establishes standards for minimum wages, overtime, pay and record keeping. These standards affect over one hundred thirt y million full time and part time employees at both private and public sectors of the US economy. This act promotes fairness, justice and equity and empowers employees to learned person a law suit against any employer who violates any of the principles and policies of the Act. This new policy thoroughly complies with the standards set out in the US department of labour Act of 1938 in all fairness and equity. The policy is also transparent enough to give employees the autonomy to institute law suits against HP if the companys policy is perceived to be contradictory to national legislations.4.3 International implicationsThe ILO (International Labour Organization) is the body in charge of administering labour standards and the organization presently comprises of 183 nations all about the world. The ILO has adopted 188 conventions which are treaties creating international labour law standards. The US has wholly adhered to two of these labour law standards which are the convention on the abolishment of forced labour and the convention on the worst form of kidskin labour. The US has resisted the adoption of the other parts of the convention including those that regulate stipend and rewards to employees from an international perspective. Compensation and rewards at both executive and employee level have not been thoroughly developed in line with ILO standards. The US claims that its policies have been developed internally and competitively and do not need to be adjusted to reflect international standards. As competitive as the real reward policy in HP is, it is still important to adopt an international trance in its implementation.Sourcehttp//www.iclg.co.uk/khadmin/Publications/pdf/4390.pdf-accessed on 30-04-20115 military rank of policy and procedures5.1 Reward evaluation matrixArmstrong, Brown and Reilly (2009) prescribe sise metrics for evaluating the success of any reward management policy. In resume of this the procedures for evaluating the effective ness of HPs reward policy are set out below.Reward AspectMeasured ByReward systemClear reward strategy and annual plan in support of business strategy and planProductivity and reward costsProfit, value added or sales per employeeTotal pay and reward costs compared with rival in the US computer industry monetary rewardFinancial recognition for behaviours in line with strategy and valuesAppropriate forms of honor performance and contribution in placeProportion of supplys covered by methods of rewarding performance and contributionRisk assessment of grant plan designClear demonstration of return on costs of bonusEmploymentRatio of job offers to acceptancesStaff involuntary turnover to leniency rates and retention of high performance to key skill staffStaff turnover and absence levelsReward management general actual market position compared to desiredEqual pay reviews carried out and acted uponQuantity, quality and frequency of reward communicationEngagement and satisfaction with r ewardsSurveyed overall employee engagement levelsEmployee overall satisfaction with pay and rewardsEmployee opinions that rewards are competitiveEmployee opinion that performance is rewarded and managed effectivelyEmployee opinion on level of understanding of rewardManagers savour reward arrangements are flexible and meet their needs.6 ConclusionReward management is an integral part of the measure of the competitiveness of an organization. As a key component of the overall human resource strategy, reward management is central to the productivity of employees which is also linked to the overall profitability of an organization, as well as its long term survival. It is no longer credible to think that a well crafted strategy can deliver an organizations core values without involving the element of employee reward management. Available and existing research in this area suggests a strong link between the effectiveness of strategies with the involvement of an appropriate reward system (Richard and Ralph, 2001). Reward management is increasingly becoming a source of sustained competitive service for many organizations. The old pay structure which is based on job analyses, descriptions and specifications is no longer supporting the attainment of long term organizational goals and objectives (Gomez-Mejia and Balkin, 1992).This report has established a clear link between reward management and the sustainable attainment of organization goals and objectives through the contribution of extrinsically and as such motivated employees. Through an example of a world class organization the role of a reward policy and its evaluation criteria has been discussed with a view to establishing a link between efforts and rewards through formalised and specified targets (Kessler and Purcell, 1992, cited in Giovanni and Tommasso, 2011, pp 2). In establishing the reward policy for an organization, the organizations corporate objectives are important inputs to the entire process, and a n alignment between these aim and objectives and the reward policy is strategically important to the effectiveness of the reward policy