Reply toEffective Reward Systems in Performance Management Discussion 2

Q – Please read the discussion below and prepare a Reply to this discussion with comments that further and advance the discussion topic.

Please provide the references you used.

Ensure zero plagiarism.

Word limit: 250 words

Discussion

Effective Reward Systems in Performance Management

According to Aguinis, H. (2023), it is crucial to align performance management with incentive systems to enhance business performance. This entails creating compensation plans that accurately define successful performance and the critical factors that contribute to it. Research has shown that companies that acknowledge and reward exceptional performance are more likely to attract and retain high-performing employees, which is vital for gaining a competitive edge in the talent market. Well-designed compensation plans can be robust in motivating employees to achieve company goals. By offering individual incentives, these plans encourage employees to modify their behavior and improve their performance. For example, a company seeking to enhance customer satisfaction may introduce a compensation plan that rewards employees for boosting satisfaction. However, some departments may still rely on traditional pay structures that do not link rewards to performance, putting workers under a compensation plan at an advantage over their peers. Studies indicate that individual pay incentives can boost productivity by up to 30%. It is crucial to remember that success is not always guaranteed. Employees need various skills and qualities and a supportive work environment that fosters optimal performance.

According to Indeed (2022), various reward systems exist to compensate workers for their hard work, offering financial, non-financial, or emotional recognition. Rewards can take on intrinsic or extrinsic forms, with extrinsic rewards coming from an external source, such as an employer. These rewards are often tied to the worker’s output and manifest as bonuses, corporate vehicles, loyalty programs, or tangible items. In contrast, intrinsic rewards are intangible benefits that stem from employee satisfaction upon completing a task. This sense of fulfillment may come from meeting a deadline, receiving praise for a job well done, or successfully finishing a project on time. While different organizations may have unique reward programs, the overarching goal is to motivate workers individually or in groups and boost their productivity. Workers may receive incentives beyond their salary when they hit a performance goal. Companies typically use attainable, fair, and clearly defined benchmarks to award rewards.

According to Smith, O. (2021), regularly reviewing and updating your company’s mission statement is crucial to ensure that your principles align with employees’ benefits. As your organization evolves, its values may shift, making it vital that your mission statement accurately reflects your current standing. It’s important to regularly update and redefine the company’s image to keep up with these changes. In addition, it’s essential to periodically evaluate the awards and benefits to ensure that they align with the organization’s beliefs. This involves collaborating with various businesses to create impartial, inclusive, and accessible benefits for all. It’s not enough to update your company’s mission; you must ensure that your rewards and bonuses align with your values. Also, determining which actions align with your company’s mission and values is essential. While business values are important, your actions and decisions ultimately matter most. If your actions and values don’t align, you risk sending mixed messages to your clients, employees, and potential investors.

In any organization, a fair system for rewards is vital. The inclusion of fairness is an essential element in any reward and recognition strategy, and it is crucial to weave it into your company culture and procedures. According to Employee Rewards & Recognition (2021), to achieve equity in reward distribution, specific measures must be taken, including helping employees understand the benchmark, clearly outlining the actions and perceived value of rewards, establishing a consistent protocol, ensuring equal treatment, and leveraging a platform for rewards and recognition.

References

Aguinis, H. (2023). Performance management (5th ed.). Chicago Business Press. ISBN: 978-1-948426-48-0

Employee Rewards & Recognition (2021). Achieve Fairness in Reward Management With These 5 Steps. https://www.incentivesmart.com/blog/achieve-fairness-in-reward-management

Indeed (2022). What are reward systems? (With benefits and examples). https://uk.indeed.com/career-advice/career-development/what-are-reward-systems

Smith, O. (2021). Three ways to align rewards and benefits with company purpose. Reba Group Ltd. https://reba.global/resource/three-ways-to-align-rewards-and-benefits-with-company-purpose.html

Requirements: 250 word