Reward - Blog 14

Reward 

An employee reward system consists of an organisations integrated policy, processes and practices for rewarding its employees in accordance with their contribution skill and their market worth (Armstrong, 2002)
Many organisations use a reward system to their employees in order to keep up motivation, and to show appreciations of their hard work.
The most basic style of reward is the idea of commission, for example a car sales employee, may receive a percentage of the amount they sold in order to encourage them to sell as much as they can, although when done in this style it can cause tension and anxiety between employees and thus actually have a negative rather than positive effect.

One organisation for which gives a good reward system to its managers is BT. The firm BT rewards managers (Little, 2012)for behaviour that drives key strategic objectives of the business. (McInally, 2008)
The five key features of the reward system are based on being available to 40,000 managerial employees and include transparency, market alignment, role focus, performance-orientation and choice.
This therefore is seen as a key element to BT, however, is only available to its top managerial positions, and means that the other employees who do the day to day workings of the organisation are left out, is this discrimination? Or a positive incentive to work hard and become a more senior member within the organisation? 
This idea fits well into the idea of the bankers bonus scandals, and CEO bonus scandals, with many employees and the general public getting very angry based on the high amount of bonuses that some top end bankers received as a reward payment, while the other workers were forgotten about; more so when there companies were reporting poor profits. 

There are benefits of organisations giving there CEOs bonuses, but also many negatives. (BBCnews, 2011)

Positives	Negatives
Gives happiness to that person, and can make them want to work harder	Seen unfair to other people in the organisation – decreases staff motivation
Could encourage people with more skill and experience to take up the job	Already usual have very high starting salaries.
Motivation for improving the organisation- they want to stay there	Annoys shareholders – lower profits means less money for them
	Reduces company reputation the lower their profit is – they are reducing from that

One organisation which is applauded for its involvement with all employees is John Lewis. Who have a cap on how much any top manager can earn, and gives the same finial benefits to all employees, based on a percentage given back from how much they have been paid that year.
A few comments from the employees of John Lewis (JohnLewisPartnership, 1999)

• “The John Lewis final salary pension scheme is a fantastic benefit. And we don’t have to contribute any money from our salaries towards it, which is very unusual these days.”

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• The biggest advantage of being a co-owner is that you get to share in the profits. Once a year we get a bonus, which is a percentage of our salary – and it’s exactly the same percentage for every Partner.

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• “John Spedan Lewis was keen to make sure that the Partnership was not all about work, and the social side of things is still very alive. The Partnership will support you whatever your hobbies, from sailing to snooker, sewing to mountain bikes.”

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• “We love the discounts! I get 25% discount in John Lewis stores and 15% at Waitrose. Believe me, 15% off the weekly grocery bill is a huge benefit!”

 These comments clearly show that not all bonus need to be financial, it’s all about the day to day goings on of the organisation and the stores people work in, by providing things such as staff discount all contribute to whether people want to work for you or not.
One aspect they actively explore is the idea of team buildings activities, which as a whole means people have a higher motivation and a strong team relationship means they will work more effectively together.        

Rewards apply to many diffrent aspects of interaction with people, but clearly it is an important factor when looking at motivation.  Herzberg conceives the workplace as made up of two sets of factors; satisfiers and dissatisfiers. Satisfiers are those conditions that motivate the employee to work hard, while dissatisfiers are those conditions that demotivate the employee. (Armstrong, 2002) 

Overall I think it is clear that there are lots of great reward schemes that allowed employees to feel appreciated and work more effectively and efficiently. But it is important that these schemes are fair and and are used in a way not to bribe people into doing things but as what they are set out to de, be a reward; making sure they cause no hard feelings and thus counteract the 
Bibliography

Armstrong, M. (2002) People and organisations - Employee Reward. 3rd ed. London: Cromwell Press.

 Little, A. (2012) Bank in £1M bonus scandal has cost every family £500. ONLINE : 

http://www.express.co.uk/posts/view/298522/Bank-in-1m-bonus-scandal-has-cost-every-family-500-Bank-in-1m-bonus-scandal-has-cost-every-family-500-Bank-in-1m-bonus-scandal-has-cost-every-family-500-Bank-in-1m-bonus-scandal-has-cost-every-family-500. National Newspaper: UK news Daily Express.

McInally, J. (2008) EmployeeBanefits [online]. Dishing out reward for hitting strategic goals creates value. Available from: http://www.employeebenefits.co.uk/item/3844 [Accessed: 27th April 2012].