6 Reward Management

Special Topic
in
Human Resource Management
Submitted by:
Rafael A. Caparal
Mary Grace C. Alabado
BSBA HRM 4-A
Submitted to:
Dr. Analyn Banagbanag,DM,BM

Subject Teacher
Reward Management
➢ Is concerned with the formulation and implementation of strategies and policies
in order 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 processes and practices that are geared to the
improvement of organization, team and individual performance. It should be
emphasized that reward management is not just about pay and employee
benefits. It is equally concerned with non-financial rewards such as recognition,
learning and development opportunities and increased job responsibility.
Aims of Reward Management

The strategic aim of reward management is to develop and implement the reward
policies, processes and practices required to support the achievement of the
organization’s business goals. The specific aims are to:
• Reward people according to what the organization values and wants to pay for.
➢ This aim focuses on ensuring that employee rewards align with the
organization’s core values and strategic goals. It means recognizing and
compensating employees for behaviors and outcomes that the organization
deems important, thereby reinforcing desired actions and priorities.
• the right things to convey the right message about what is important in terms of and
outcomes.
➢ This involves establishing a reward system that emphasizes specific behaviors
and results that the organization wants to promote. By rewarding the right
actions, the organization communicates its priorities and encourages
employees to adopt those behaviors.
• Develop a performance behaviours culture.

➢ This aim seeks to create an environment where high performance is recognized
and encouraged. Reward A performance culture motivates employees to excel
by linking rewards to their contributions and achievements, fostering a sense of
accountability and continuous improvement.
• Motivate people and obtain their commitment and engagement.

➢ Reward management aims to inspire employees to be committed and engaged
in their work. By offering meaningful rewards, organizations can enhance
employee motivation, leading to higher levels of productivity and job
satisfaction.
• Help to attract and retain the high-quality people the organization needs.
➢ This aim emphasizes the importance of a competitive reward system in drawing

in and keeping talented employees.
The Importance of Reward Management

The elements of reward management within a business organization are all the things
that they use to attract potential employees into their business which includes salary,
bonuses, incentive pay, benefits and employee growth opportunities such as
professional development and training opportunities. Having a reward management
system in place provides the business with many advantages, especially in small to
medium size organizations where the managers must have a good relationship with
the employees. Reward programmes have proved to be very successful in motivating
employees and in turn increase the performance of the organization as a whole.
Below are some of the reasons why a reward management is important:

• Mutually beneficial
➢ A reward system is beneficial not only to the employee but also to the
organization. The employee will feel more motivated to work harder by having
a reward system in place the employee will feel more committed to their work
and their productivity will increase. An increase in productivity will then benefit
the organization. Therefore, a reward system is mutually beneficial to the
employee and the organization.
• Motivation
➢ A reward system will motivate employees by reaching targets and
organizational goals in exchange for rewards. A reward system is great at
motivating employees but they will also be motivated to prove themselves to
the organization.
• Absenteeism
➢ A reward system will reduce absenteeism in the organization. Employees like
being rewarded for a job well done and if there is a reward system in place,
employees will be less likely to be ringing in sick and not showing up for work.
Also, by having a reward system in place the employees will be clearer about
the targets and goals of the organization as they will be rewarded when reach
certain targets. So, by having a reward system as an incentive they will be less
likely to be absent from work.
• Loyalty
➢ A reward system will increase the employee’s loyalty to the organization. By a
reward system being in place the employee feels valued by the organization
and knows that their opinion matters. If an employee is happy with the reward
system, they are more likely to appreciate work place and remain loyal to the
organization.
• Morale
➢ Having a reward system in place providing employees with incentives and
recognition will boost their morale. By encouraging employees to meet goals
and targets it gives them clear focus and purpose which will their morale. By
the employee’s morale being boosted this will increase the morale of the entire
organization. This is all down to a reward system in the organization.
• Teamwork
➢ The reward system will increase the teamwork spirit in the organization. The
reward system will promote teamwork to the employees. The employees will
work together as part of a team to achieve their targets in return for rewards.
Teamwork within the organization will help increase efficiency and create a
happier workplace. This is another reason why reward systems are important
in business organizations.
Development of Reward Management

1. Set Clear Objectives
➢ This step involves defining specific goals that the reward management system
aims to achieve. Clear objectives guide the design and implementation of the
reward strategy, ensuring it aligns with the organization’s overall mission and
values.
2. Audit Existing Practices

➢ This entails reviewing current reward systems and practices to identify what is
working and what isn’t. The audit helps in understanding the effectiveness of
existing rewards and highlights areas that need improvement or adjustment.
3. Gather Employee Feedback

➢ In this step, organizations collect input from employees about their perceptions
of the current reward system and what they value. This feedback is crucial for
designing a system that meets employee needs and enhances satisfaction.
4. Design a Fair and Transparent System

➢ This step focuses on creating a reward system that is equitable and easy to
understand. Transparency in how rewards are determined fosters trust and
ensures that employees feel fairly treated.
5. Communicate the Plan

➢ Effective communication involves sharing the details of the reward
management system with all employees. This ensures that everyone
understands how the system works, what behaviors and outcomes are
rewarded, and how they can benefit from it.
6. Monitor and Adjust

➢ After implementation, organizations need to continuously evaluate the reward
system’s effectiveness. This step involves collecting data, assessing employee
satisfaction, and making necessary adjustments to ensure the system remains
relevant and effective over time.
Perspectives of Reward Management

• Total Reward Approach
➢ Reward management adopts a “total reward” perspective, integrating all
aspects of compensation and benefits into a cohesive system. This includes
not only financial rewards like salaries and bonuses but also non-financial
elements such as recognition, career development opportunities, and work-life
balance initiatives. The goal is to create a comprehensive package that meets
the diverse needs of employees.
• Importance of Alignment
➢ Effective reward management aligns with both organizational goals and
employee values. This alignment ensures that the rewards system motivates
employees to achieve business objectives while also addressing their personal
and professional aspirations. For instance, a company might tie rewards to
performance metrics that reflect its strategic goals, thereby fostering a culture
of accountability and motivation.
• Employee Engagement and Retention

➢ A well-structured reward management system enhances employee
engagement and satisfaction. By recognizing and rewarding achievements,
organizations can cultivate a positive work environment that reduces turnover
rates. Research indicates that organizations with robust recognition programs
can experience significantly lower voluntary turnover.
• Fairness and Transparency

➢ The philosophy of reward management emphasizes fairness, equity, and
transparency. Employees are more likely to feel valued and motivated when
they perceive the reward system as just and consistent. This involves clearly
communicating the criteria for rewards and ensuring that all employees
understand how they can achieve them.
Total Rewards Framework

Reward Management is a complex process with many interconnecting elements and
underpinning concepts. The reward management framework expressed as a concept
map is shown below:
Bibliography
Management Study Guide. (n.d.). Development of reward processes. Retrieved from
https://www.managementstudyguide.com/development-of-reward-
processes.htm
Choi, J. N., & Lee, J. (2016).
The relationship between occupational culture dimensions and reward

preferences: A structural equation modelling approach. International Journal of
Human Resource Management, 27(10), 1097-1120.
https://doi.org/10.1080/09585192.2016.1230440
MyEducator. (n.d.). Total rewards framework. Retrieved from
https://app.myeducator.com/reader/web/1109/topic1/bc0vg/#:~:text=The%20t
otal%20rewards%20framework%20shows,%2C%20Benefits%2C%20and%20
Intangible%20Rewards.
Study.com. (n.d.). Reward management: Theory and importance. Retrieved from
https://study.com/academy/lesson/reward-management-theory-
importance.html#:~:text=Reward%20management%20are%20workplace%20
strategies,performance%20with%20rewards%20and%20recognition.

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Special Topic

Dr. Analyn Banagbanag,DM,BM

Aims of Reward Management

• Develop a performance behaviours culture.

• Motivate people and obtain their commitment and engagement.

➢ This aim emphasizes the importance of a competitive reward system in drawing

The Importance of Reward Management

Below are some of the reasons why a reward management is important:

Development of Reward Management

2. Audit Existing Practices

3. Gather Employee Feedback

4. Design a Fair and Transparent System

5. Communicate the Plan

6. Monitor and Adjust

Perspectives of Reward Management

• Employee Engagement and Retention

• Fairness and Transparency

Total Rewards Framework

Management Study Guide. (n.d.). Development of reward processes. Retrieved from

Choi, J. N., & Lee, J. (2016).

The relationship between occupational culture dimensions and reward

MyEducator. (n.d.). Total rewards framework. Retrieved from

Study.com. (n.d.). Reward management: Theory and importance. Retrieved from

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