Concept of Reward Management
Reward means a thing given to anyone because of his contribution to the organization. Rewards and incentives contribute to strategy implementation by shaping individual behavior in the organization. Reward management is important for any business that has employees. Human resources are usually in charge of the reward management program in a company. This lesson discusses the theory and importance of reward management. A good design reward system is consistent with organizational goals, visions, missions and job performance. The most obvious reward that individual gets from the job is in the form of pay.
Reward management is a motivational practice that businesses use to reward employees for their achievements and success. In managerial term, the reward is defined as the total return given by an employer to an employee for rendering his/her services towards the organizational objectives. The company sets goals and establishes rules for its employees to follow to achieve those goals. This is the overall return from the work. Every person asks for return from the organization before involving in any type of activities, which is termed as the reward. It attracts a worker’s attention and inspires him/her to perform the task. Moreover, a reward is a pay-off for performance which is directly concerned with the level of motivation and job satisfaction.
Reward management is important for the following reasons:
- Retains employees
- Attracts new employees
- Avoids the cost of hiring and training new employees
- Builds loyalty and honesty
- Creates a healthy work environment
- Encourages positive attitudes and behavior
- Makes employees more likely to seek advancement
Therefore, management of reward in an organization helps to motivate and retain employees at work. It is a vital aspect of HRM because a well-designed reward system will lead towards organizational productivity and employees satisfaction. Moreover, reward management is the process of creating, implementing and controlling an effective reward system in the organization that helps to maintain and improve organizational performance. It senses the strategic purposes of attracting, motivating and retaining employees. Reward management basically focuses on how the employees can be retained or motivated at work. All employees follow the same reward system, and the system is organized and just. Using a website to track employee development enables the employee and employer to monitor progress and easily identify when goals are reached and rewards earned.
Hence, reward management is a crucial aspect of Human Resource Management that revolves around designing and implementation of the appropriate payment system. This system helps improve organizational performance and get people motivated at work.
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