Implementation Of A Reward Management System

Published Date: 02 Nov 2017

Many managers stated in the survey that the existing reward system needs to be revised. This is so due to the lack of inefficiencies it has. Some employees were not rewarded despite obtaining a grade D, for their performance, and it does not consider overall performance and additional tasks done.

The new reward system will take into account the additional task of employees and their overall performance at work, and some managers approved that there is not performance bonus for employees, therefore, performance bonus will be put in place for employees. Furthermore, management must encourage fair competition among employees by giving extra rewards which will be beneficial for the company itself.

5.2 Career opportunities, autonomy and empowerment

Employees may also be motivated by career development opportunities where the employee will be aware of the promotion opportunities available to him. To apply this type of reward well, the company needs to be clear what the career paths are and what are the criteria for horizontal and vertical flexibility. A well-defined career / development plan will encourage workers to learn and be flexible in order to aspire to higher post in the organization.

Furthermore, autonomy should be given to employees. Autonomy is the degree of discretion and freedom allowed to employees over their jobs. As a fact, jobs with high degree of autonomy create a sense of responsibility and greater job satisfaction to the employees.

5.3 Implementation of a Performance Management system

5.3.1 Grant of annual salary increase to be linked with the performance management system

With the proposed reward system, the base pay will be considered as the most important component of the pay package as most of allowances will be in the form of a percentage of the base pay, therefore the higher the base pay, the higher the allowances and eventually the higher the pay-packet.

The base pay increase should be linked with the appraisal system, where employees who have not performed to required standard will not be granted any increase while high performers, cooperative and innovative employees, should be granted more than one increment.

5.3.2 Regular training facilities for employees

In order to identify the strengths and weaknesses of employees, there should be an effective system of assessment so as to give training to those employees who do not have the capacity and skill to perform their job correctly. In the first place, there is no need to provide a reward system, either monetary or non monetary to employees so as to improve their work performance as management is not aware of the existing strengths and weaknesses of its employees.

In TNT Business Solutions Ltd, there is an appraisal system yet it could not help management to identify the strengths and weaknesses of the employees thoroughly. Therefore, training should be given before the implementation of the proposed reward system because once set, employees/teams should be on the same level of working to ensure fair and equal treatment to all.

5.4 Increase communication between management & employees

5.4.1 Top down communication: magazines & newsletters

Management should place emphasis in communication through magazines and newsletters where management can convey messages directly to employees.

Many employees are not aware of the difficult situation of the company with a competitive environment and from other companies. As such, management should use these communication medium to keep employees informed of the situation. It is a fact that when employees know that the existence of their company is at stake, they will naturally change their behaviour for the better towards their work.

5.4.2Bottom up communication: Suggestions & Complaints boxes

Suggestions and complaints boxes may also be used as means of bottom up communication. Incentives could be given to those employees coming up with innovative ideas.

In this context, management should adopt an open-door policy where it creates an environment such that employees feel free to voice out their opinions.

5.4 Quality Management

5.4.1 Code of ethics

Managing ethical behaviour is one of the most influencing and complex problems facing business organizations today.

A code of ethics should be adopted at the TNT Business Solutions Ltd to promote ethical behaviour on career advancement, fairness on equal opportunities and on the reward policy. In fact, determination of best employee/team should not be based on factors other than performance. The perception of employees that there will be favoritism and bias in human resources practices should be eradicated.

When the business is being carried out in an ethical manner, employees would be more likely to accept the decision of management regarding the determination of the best employee/team.

5.5 Retention programs

Since people are the only assets that can simply leave the work, employee retention programs is important in situation tight job market. TNT Business Solutions Ltd must implement a retention program as in the survey it was found and competition that many employees have worked in the company up to five to seven years only. Most of them have left the job during their stay. Therefore, the company should maintain a retention program in which it will motivate its employees to stay in the company. It can introduce medical benefits, orientation, coaching, mentoring, career development assistance and training incentives. Through introducing all these benefits, employees will be motivated and more committed to their work.

5.6 Recognition Activities

It was found that TNT Business Solutions do have the best employee award, and best performance team, but it does not have activities through which it gives recognition or appreciation to an employee who has performed well or who have suggested ideas for betterment of the company. Recognition is necessary so as to let employees know they are valued and appreciated by their colleagues, superiors and the organization. Thus, recognition activities should also build up and encourage work that advances employee and organizational goals and values. Recognition to employees can be given in the form of praise, respect and award. Moreover, during the survey it was found that employees, who have got a D in their performance appraisal, were not remunerated at all. Therefore, these employees must have their reward even if they have received a D, because it does not mean failure, and even more, they have also contributed to the achievement of goals. Managers can recompense those employees through recognition activities, supporting and encouraging them to perform better. By giving those employees appreciation or encouragement, the latter will feel more motivated to work better than their previous performance.

Conclusion

Performance management is concerned with measuring individuals' effectiveness in their roles, understanding their aspirations and determining which development actions would be most appropriate. Reward management is about how to motivate employees through rewards, and in turn how employees will react to the rewards. In some organisations the links between the two are strong and explicit, while in others they are kept deliberately separate. These systems can be prompted by evidence of employee dissatisfaction, such as high turnover or poor morale, or by de-motivation of employees.

The subject of performance management is vital in the human resource management system for any organization. In the company of TNT Business Solutions, it is regarded as a proactive system of managing employee performance for driving the individuals and the organizations towards desired performance and results, as it drives an harmonious alignment between individual and organizational objectives for accomplishment of a distinct performance.

Rewards are the loudest and clearest ways that can be used by the management of TNT Business Solutions Ltd to send a message about what they consider important. Employees are greatly influenced by the way their performance is measured and rewarded. Above all, employees of the company have the right to determine whether the values, culture and reward system of their organization match their own.

The effectiveness of an organisation's performance and reward management can have a major impact not only on morale and productivity but also its ability to attract and retain staff. Many companies have found that far from complementing the established objectives of the business, their performance and reward systems were actually driving counter-productive behaviour. Thus, to avoid this situation, management of TNT Business Solutions must be aware of the impact of reward on employee performance, and therefore, must implement a new performance and reward systems due to the inefficiencies they have in the company.