Reward Aims and Characteristics

Reward Aims

• Employer’s point of view

Organizations pay employees for their potential, their input-in the form of competencies, their output like meeting targets & to maintain both internal as well as external relativities like market competitiveness.

• Employees’ point of view

Apart from receiving monetary rewards, employees expect to be involved as stakeholders in the organization with fair treatment and good communication on how their expectations are met by the reward policy in place.

Hence, Reward characteristics differ not only in terms of the expectations on both sides but also on the type of organization.

In Traditional organizations, the concept of collective pay bargaining is still used. Centralised policies are applicable which allow progression up the reward scale only by the length of service in the company. Widespread use of job evaluation makes the performance rewards small & mainly available to senior staff. The response to market influences is also quite cautious.

In Leading organizations, pay is mostly directly related to individual and corporate performance. Decentralised policies allow line managers the freedom to use performance management as a criteria to higher attainment of organizational goals as well as rewards. Hence, there are a lot of flexi-benefits available with broad branding of the pay grades. Increased variable pay is also seen based on team & individual performances and competencies.

In Small Startups, there are no specialist HR policies or Reward management structures. Spot salaries are given wherein the owner decides the amount with no actual time period for a job evaluation. Salary hikes are given at will or when staff threaten to leave while ownership share happens only incase of a ptential for capital gain.