![]() To recruit and retain sufficient employees with the right skills It discourages staff from working overtime, as it wishes to avoid paying overtime rates. It recruits employees with low skills, and pays low wages. The US supermarket group Walmart competes on low cost. In an organisation that has a strategy of cost leadership, a simple reward scheme offering fairly low wages may be appropriate as less skilled staff are required, new staff are easy to recruit and need little training, so there is less incentive to offer generous rewards. If a strategy of differentiation is chosen, for example, staff may receive more generous benefits, and these may be linked to achieving certain skills or achieving pre determined targets. ![]() At the strategic level, the reward scheme must be consistent with the strategy of the organisation. The reward scheme should support the organisation’s goals. To be affordable and easy to administer.Īligning the goals of the organisation and employees.To align the risk preferences of managers and employees with those of the organisation.To ensure that the organisation is able to recruit and retain sufficient number of employees with the right skills.To support the goals of the organisation by aligning the goals of employees with these.What do organisations hope to achieve from a reward scheme? The following are among the most important objectives: In doing so, they are exchanging extrinsic rewards for the intrinsic reward of doing something that they believe is good for society. Many people who work for charities, for example, work for much lower salaries than they might achieve if they worked for commercial organisations. Intrinsic rewards relate to satisfaction that is derived from actually performing the job such as personal fulfilment, and a sense of contributing something to society. Extrinsic rewards are items such as financial payments and working conditions that the employee receives as part of the job. Rewards schemes may include extrinsic and intrinsic rewards. ‘Reward system refers to all the monetary, non-monetary and psychological payments that an organisation provides for its employees in exchange for the work they perform.’ This article looks at how reward schemes can be used to influence the behaviour of employees Meaning of reward schemesĪ broad definition of reward schemes is provided by Bratton: An introduction to professional insightsĪ major part of performance management involves managing employees and managers, as their performance will have a major effect on the performance of the organisation as a whole. ![]()
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