One of important attributes of work organization is the ability to give reward to their members. Pay, promotions, fringe benefits, and status symbols are perhaps the most important rewards. Because these rewards are important, the ways they are distributed have a profound effect on the quality of work life as well as on the effectiveness of organization.
Organization typically rely on reward system to do four things :
1. Motivate employees to perform effectively.
2. Motivate employee to join the organization.
3. Motivate employee to come to work, and
4. Motivate individuals by indicating their position in the organization structure.
There are several principles for setting up an effective reward system in an …show more content…
Financial rewards provide a tangible form of recognition and can therefore serve as indirect motivators, as long as people expect that further achievement will produce worthwhile results.
Financial incentives aim to motivate people to achieve their objectives, improve their performance on enhance their competence or skills by focusing on specific targets and priorities. Financial rewards provide financial recognition to employees for their achievement in the shape of attaining or exceeding their performance targets or reaching the level of competence skill. Achievement bonus, team based lump sum payment our organization provides in this category .
2) Competency related Pay : competency related pay may be defined asa method of rewarding people wholly or partly by reference to the level of competence they demonstrate in carrying out their roles. This definition has two important points : (1) pay is related to competence (2) people may be rewarded with reference to their level of competence.
Our organization promotes competence-related pay for effective use of competence to generate value. Competence related pay works through the process of competence analysis of individual competences and level of competence.
3) Skill Based Pay: Skill based pay links pay to the level of skills usedin the job and, sometimes, the acquisition and application of additional