HUMAN RESOURCE MANAGEMENT
REWARD SYSTEM
Submitted to: Dr. RAJNI JAIN Submitted by: ANURODH KUMAR (3) DEEPANSHU OHLAN(5) KUMAR ANKUR(10) UTTAM KUMAR(26)
INTRODUCTION
Employees don’t work for free. Most businesses are not volunteer services, so you have to compensate them in some way for their time and effort. What used to be called “pay” and then became “remuneration” is today often termed “reward”. It refers to all of the monetary, non-monetary, and psychological payments that an organisation provides for its employees. How can you put all this together? There is no magic, one-size-fits-all solution: it should vary in different organisations.
Objectives
Reward systems have three main objectives: (a) To attract new employees to the organisation. (b) To elicit good work performance.
Reward Systems
Intrinsic Rewards Status Growth
Responsibility
Financial Rewards: Indirect Compensation
Protection Programs
Examples: pensions, health coverage, life insurance, social welfare programs
Public Private
Mandatory versus Voluntary Contributory versus Non-contributory
Financial Rewards: Indirect Compensation
Pay for Time Not Worked (at work and off work)
Examples: breaks, meal time, transit time, medical leave, military leave, education leave, vacation
Services and Perquisites
General
(Examples: financial services, counseling, dining discounts) Limited (Examples: automobile, cellular phone, clothing allowance, gym membership)
External Influences on Compensation
Supply of Labor Demand for Labor Org Location Economic State Competition Union Influence Product/Service Demand
Internal Influences on Compensation
Organization Size Willingness to Pay Ability to Pay Tradition Unionization Job Itself Employer Prestige Work Force Character Desired Employee Quality Ratio of Labor Costs to Total Costs
Organizational Compensation System Requirements
Maximize ability to attract and retain qualified employees Be within ability to pay Allow organization to remain competitive
Basic Compensation Decisions
Wage level decisions compared to other organizations Wage structure decisions comparing job to job Individual wage decisions comparing individuals in same jobs
Pay Adjustments
Fixed Rate Increases
step increases, flat dollar increases
Percentage Increases
across the board, competitive percent
Incentives
Levels of Incentives
Individual
Group Company-wide Executive
Individual Incentive Plans
Piecework Payment
(Straight and Differential) Standard Hour Commissions Bonuses Skills-based Pay Non-financial Awards
Group Incentive Plans
Piece-rate Systems
Standard Hour Plans Group Bonuses Profit Sharing
Company-wide Incentives
Profit Sharing
(Cash Plan or Deferred Plan)
Gainsharing
Stock Ownership Plans (ESOP)
Executive Incentives
Salaries Stock Options
Long-term Incentive Plan Payouts
Directors’ Fees Perquisites
Executive Pay Decisions
Daily Dilbert, 29 October, 2005
HRM Crises of Finances: HRM Implications
Bankruptcies Acquisitions and Mergers Scandals with officers/managers Private & Corporate Lawsuits Government investigations and charges Arrests and convictions Tragedies
Evaluation of Incentives
Attention getter? Understandable? Establishes culture through values? Improves communication? Pays when it should?
(achievements versus failures)