Practical Skills: Recognition and Reward System

Armstrong (2014) suggests that reward and recognition system is an important part of the foundation of modern business. Business organizations are required to provide suitable reward systems for its human resources. It serves as an incentive that inspires the employees of the organisation directly or indirectly. Armstrong (2014) defines direct incentives as monetary rewards while the indirect incentives are non-monetary. The right recognition and good reward helps in encouraging the staffs of an organization thus help in the achievement of organizational goals and objectives.

Nonetheless, the main objective of reward management in the organization is improvement of the overall organizational success and performance through development of proper recognition and reward systems based on the contribution of the employees in the agency as suggested by Armstrong and Murlis (2011). The authors further argued that doing so helps the employees to feel that they are part and parcel of the organization and this eventually leads to increased morale hence better performance. Similarly, it also creates the sense of belonging and improved employee’s loyalty in the company.

Now, one may ask him/herself what is the significance of reward and recognition system in the company? They play various roles in the organization; first better reward system helps in attracting and retaining employees in the organization .when employees are well remunerated they tend to remain in the organization and also convince their colleagues in joining their organization. Secondly, better rewards help in improving the work performance and improve profit. An effective and efficient reward management system leads to more committed workforce that certainly plays significant role top wards the growth of the company (Bratton and Gold, 2013).

To understand the rewards and recognition that employees want Nelson (2013) asked this question, what are the exact rewards and recognition that employs likes? The author argued that employees likes management support and to be involved in decision making of the future projects of the organizations. Additionally, Nelson (2013) noted that employees gain morale and trust when they are involved in the decision making in the organization. The author also argued that employees like the following praise; written praise, personal praise electronic praise and pubic praise.

Therefore, the fundamental objective of this report is to propose to the management of the Wizard Banking on how to address the issues of the reward and recognition in their organization and provide recommendations on better rewards and recognition that they can provide to their employees.

Importance of Reward and Recognition Systems in the Organization

Reward and recognition systems comprises of the following elements in the organization; salary, incentive pay, bonuses, growth and development opportunities for employees such as training opportunities and other benefits. The following are the benefits of the reward and recognition systems in the organization.

The effective and efficient reward system in the organization helps in improving the employee’s morale through provision of incentives and recognition (Karami, 2015). This system helps in encouraging employees in meeting their targets through provision of clear focus and the purpose. Boosting individual employee morale leads to the increased morale in the entire company. Reward system not only helps the employees but also benefits the organization.

Organization with suitable reward systems typically post better performance because their employees are also motivated to work since their efforts are always recognized (Karami, 2015) Increase in the productivity if of beneficial to the organization. Therefore, an effective and efficient reward system mutually benefits both employees and the organization. Additionally, reward systems also motivate employees in achieving their targets. This motivation is articulated to the need for reward since an effective reward systems rewards those employees that surpass their duties.

A reward system also helps in reducing abseentism among the employees in the organization (Karami, 2015). Workers always feel happy when they are recognized for their handwork. However, its argued that in some incidences employees normally fake sickness so as not to turn up to work when their effort are not recognized, therefore, having effective reward systems in pace will significantly reduce this vice.

Additionally, reward systems also build employees loyalty in the organization. Effective reward systems makes employees to feel being valued by the organization and they know that their opinions maters in the decision making process in the organization. Notably, employees are impressed with reward a system that appreciates their works and this also helps in attracting and retaining the existing workforce in the organization.

Team work in the organization is also enhanced through effective reward system in the organization. The system promotes the team work among the employees on the organization. Employees work in teams in order to achieve their targets for the purpose of getting more rewards. Further, reward systems also increases efficiency and create a conducive working environment within the organization.

Types of Reward and Recognition Systems

There are several types of reward systems that Management of Wizard Bank can utilize, the most common types of these systems are as follows.

Membership and Performance Based Rewards

This are rewards that an organization can advance to their workers that are based on both membership and performance. There are various performance based rewards that an organization can give their employees to motivate them and they include rewards like group bonuses, incentive scheme, piecework pay plans, merit pay among other rewards. On the other hand membership rewards that organization can advance to their employees include rewards like cost of living increases, seniority i.e. promotions, future potentials, benefits and salary.

Extrinsic and Intrinsic rewards

There are several intrinsic rewards that exist that an organization can utilize. These are rewards that can bring about satisfaction of employees from their jobs itself. For instance, joyous feeling of task accomplishment, pride of having a particular job and the feeling of belonging to a certain team more particularly a performing team. All the aforementioned rewards make up intrinsic rewards. Contrary to these there also extrinsic rewards that an organization can utilize. Extrinsic rewards unlike intrinsic they are not attaché d to the jobs they are external to their jobs they include. Therefore, they are basically management. For instance, when an employee is promoted or receives salary increase this is regarded as extrinsic reward.

Non – Financial and Financial Rewards

Financial rewards are those rewards that improve or uplifts employee’s financial status .They includes rewards like profit sharing schemes, bonuses and wage in increase. Contrary to financial there are also non financial rewards that an organization offers to his employees. They include access to medical services, pension schemes, and further assistance in prolonged sickness, counseling services, and crèche facilities and workers restaurant.

Recommendations and Conclusions

This report has basically discussed reward systems and its benefits to the organization. It’s now upon the management of Wizard Bank to scrutinize the report and gain an insight of adopting reward and recognition systems in their organization. The report recommend that organization should adopt proper rewarding systems in their organization as it’s now clear from the report that effective systems help in improving the productivity of the organization.

Finally, to conclude this report, I found it hopefully to re run thought the topics that are enclosed herein. The report starts by defining reward and recognition systems so as to introduce the reader to the report. In this report I explained reward and recognition system as integral part of current business infrastructure. Consequently I went ahead to discuss the significance of the reward and recognition systems in the organization in doing this I focused on the benefits of the reward system in the agency. I pointed out that reward system helps in increasing morale, motivation and employees loyalty. The report also discussed various types of the reward system that any given organization can utilize or adopt in this case management of Wizard Bank.

References

Armstrong, D. M. (2014). The mediating role of absorptive capacity in its effect on organizational support factors and technological innovation. Information Management and Business Review, 6(1), 25.

Armstrong , D. M & Murlis, N. (2011). The relationship of personality and organizational variables with work motivation. International Journal of Behavioral Sciences, 9(2), 147-157.

Bratton, S., Akram, A., & Gold, F. (2013). Employee engagement and visionary leadership: Impact on customer and employee satisfaction. Journal of Business Studies Quarterly, 7(2), 139.

Karami, A., (2015). Analyzing the effectiveness of reward management system on employee performance through the mediating role of employee motivation case study: Isfahan Regional Electric Company. International Journal of Academic Research in Business and Social Sciences, 3(9), 327.

Nelson, M. (2013). Designing Distribution system of rewards and influence on employee’s satisfaction case study: Hamgamkhodro Asia factory. International Journal of Business and Social Science, 3(12).