Reward and appreciate your employees

Reward and appreciate your employees

Rewards and benefits management is another important policy within HRM. It is a strategy formulated with the intention to appreciate employees for their performance and contribution to the organisation (McClurg, 2001). Rewards and benefits management can be segregated in to two segments, financial and non-financial rewards; the former focuses on monetary benefits such as performance bonuses, travel and schooling allowances including profit sharing schemes, while the latter involves employee recognition, increased job responsibilities, training and development, leadership opportunities, flexible work schedule and so on (Chiang and Birtch, 2012).

Rewards and benefits management is influenced by internal and external factors. Internal factors include organisational culture, organisational structure, business objectives and internal equity, whereas external factors consist of inflation, labour markets, market pricing and business competition (Dulebohn and Werling, 2007). The fundamental purpose of a rewards and management strategy is to ensure that individuals are compensated fairly and equally for the efforts, performance and efficiency they have shown to achieve business objectives; it has also been proven that a rewards strategy can motivate employees to perform better, which has a positive effect on employee retention (Güngör, 2011).

During my professional tenure in the Middle East, I noticed that rewards and benefits management were rarely followed and sometimes inconsistent in regional (private and public sector) entities. There is a high probability that leaders, as well as HR specialists,  are unaware of the advantages of such strategies and the positive impact it may have on employee morale and commitment to the organisation. Once again, there is a clear indication that leaders and HR specialists should be continuously educated on HRM processes.

References 

Chiang, F.F. and Birtch, T.A., 2012. The performance implications of financial and non‐financial rewards: an Asian Nordic comparison. Journal of Management Studies, 49(3), pp.538-570.

Dulebohn, J.H. and Werling, S.E., 2007. Compensation research past, present, and future. Human Resource Management Review, 17(2), pp.191-207.

Güngör, P., 2011. The relationship between reward management system and employee performance with the mediating role of motivation: A quantitative study on global banks. Procedia-Social and Behavioral Sciences, 24, pp.1510-1520.

McClurg, L.N., 2001. Team rewards: how far have we come?. Human Resource Management: Published in Cooperation with the School of Business Administration, The University of Michigan and in alliance with the Society of Human Resources Management, 40(1), pp.73-86.