1. REWARD MANAGEMENT Michael Armstrong (2003:13) defines Reward Management as being concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization. It deals with the design, implementation and maintenance of reward practices that are geared to the improvement of organizational, team and individual performance.

2. REWARD MANAGEMENT Analysis of definition 1.Is about rewarding people i.e. giving them their net contribution in the employment relationship. 2.Has to be expected through particular strategies and policies (systematic). 3.Is about fairness and equity. 4.Has to be executed consistently 5.It recognizes that employees create value for the organization and hence have to be rewarded accordingly 6.Its overall intention is to motivate and retain individuals and improve organizational performance.

3. REWARD MANAGEMENT

4. Objectives of reward mgt  Support the organization's strategy  Recruit & retain  Motivate employees  Strengthen psychological contract  Comply with legislation  Reward people for the value they create  Develop a performance culture  Apply equitably.

5. Context of reward mgt.

6. characteristics of REWARDS -Simplicity -Fairness & equitability -Perceived fairness & equitability -Participatory -Should be in alignment with organization goals. Objectives, mission & vision

7. Types of REWARDS Reward system of a company should also be in alignment with its goals, objectives, mission and vision. On the basis of the job profile, both monetary and non-monetary rewards can motivate employees to contribute more to the organization.

8. Types of REWARDS Financial Rewards  A hike in salary  Incentives  movie tickets  vacation trips  monetary allowances on special occasions  redeemable coupons,  commissions

9. Types of REWARDS Financial Rewards  cash bonuses  gift certificates  stock awards  school/tuition fees for employees’ children  free or discounted health check-ups for the complete family

10. Types of REWARDS Non-Financial Rewards  Awards  certificates  letters of appreciation  dinner with boss  redecoration of employee cabin  membership of recreation clubs  perks

11. Types of REWARDS Non-Financial Rewards  use of company facilities, suggestion awards  tie-pins  brooches  diaries  promotion  a say in management, etc.

12. Types of REWARDS Rewards by: Individual - base pay, incentives, benefits – rewards attendance, performance, competence Team - – team bonus, rewards group cooperation Organisation - – profit-sharing, shares, gain-sharing

13. Equity theory & reward management  Theory developed by John Stacey Adams(workplace and behavioural psychologist) in 1963.Named Adams equity theory  fair balance between an employee's inputs and an employee's outputs  Employee inputs include hard work, skill level, trust in superiors, enthusiasm,flexibility, adaptability  Employee out puts include salary and benefits, recognition, praise, job security, sense of advancement/growth

14. Equity theory & reward management  According to the theory, managers should strike a balance between inputs an employee gives and output received  If balance lies too far in favour of employer then employees will try to strike balance on their own by asking for more compensation or recognition  If balance is in favour of employer other employees will be demotivated and some will seek alternative employment  Employees expect a fair return for what they contribute to their jobs

15. Agency theory and reward management  Agency theory refers to the conflict of interests between principal (shareholder) and agent (director)  Principal  Agent  Agency  Agency cost

16. Total reward package  As defined by Manus and Graham (2003), total reward ‘includes all types of rewards – indirect as well as direct, and intrinsic as well as extrinsic’. Each aspect of reward, namely base pay, contingent pay, employee benefits and non-financial rewards, which include intrinsic rewards from the work itself, are linked together and treated as an integrated and coherent whole.  Total reward combines the impact of the two major categories of reward: 1) transactional rewards– tangible rewards arising from transactions between the employer and employees concerning pay and benefits, and 2) relational rewards – intangible rewards concerned with learning and development and the work experience  The concept of total reward is exerting considerable influence on reward management  An equally wide definition of total reward is offered by WorldatWork (2000) who state that total rewards are ‘all of the employer’s available tools that may be used to attract, retain, motivate and satisfy employees

17. Total reward package

18. Benefits to Employees Improved standard of living as it addresses employee needs Motivates employees Avoiding job hopping thereby getting valuable experience Benefits to Employers Productivity improves as employees are motivated Becomes employer of choice thereby attracts and retains best talent

19. Total reward package Components of an effective reward strategy Brown (2001) has suggested that effective reward strategies have three components: 1.They have to have clearly defined goals and a well-defined link to business objectives. 2. There have to be well-designed pay and reward programmes, tailored to the needs of the organization and its people, and consistent and integrated with one another. 3. Perhaps most important and most neglected, there needs to be effective and supportive HR and reward processes in place.

20. References Corehr, wordpress (2012), human resources management https://www.tutorialspoint.com/human_resource_management/human_resource_manage ment_rewards_and_recognition.htm Armstrong, M (2007) A Handbook of Employee Reward, 2nd ed, Kogan Page, London Bloom, M and Milkovich, G T (1998) Rethinking international compensation, Compensation & Benefi ts Review, 30 (1), pp 15–23 Brown, D (2001) Reward Strategies; From intent to impact, CIPD, London