Introduction to Reward Management
Transcript of Introduction to Reward Management
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Reward Management
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Learning Outcomes
Define reward management
Explain aims of reward management
Briefly explain the components of a reward system
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Learning Outcomes Cont… Explain the concept of total
reward
Identify the significance of total reward
Define the term pay management
Explain factors affecting pay management
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REWARD MANAGEMENTReward management is concerned with formulation and implementation of strategies and policies with the purpose to reward people fairly, equitably and consistently in accordance with their value to the organization and thus help the organization to achieve its strategic objectives.
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NEED OF REWARD MANAGEMENT
Reward people according to what the organization values and wants to pay for
Reward people pay for the value they create
Reward the right things to convey the right message
Develop a performance cultureMotivate people and obtain their
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NEED OF REWARD MANAGEMENT CONT…
Help to attract and retain high quality people within the organization
Develop a positive employment relationship and psychological contract
Align reward practices with both business goals and employee values
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TOTAL REWARDTotal reward includes all types of rewards, indirect and direct and intrinsic and extrinsic. Each aspect of reward, namely base pay, contingent pay, employee benefits and nonfinancial rewards, which includes intrinsic rewards from work itself, are linked together and treated together.
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MODEL OF TOTAL REWARDS
PAY/REWARD
• Base pay
• Contribution pay
• Shares
• Profit sharing
TRANSACTIONAL
RELATIONAL (INTANGIBLE)
IND
IVID
UA
L COM
MU
NAL
BENEFITS
• Pensions
• Health care
• Perks
• Flexible benefits
LEARNING AND DEVELOPMENT
• Workplace learning
• Training
• Performance management
• Career development
WORK ENVIRONMENT
• Core values
• Leadership
• Employee voice
• Job/work design
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PAY MANAGEMENTPay Management is the HRM function that deals with development, implementation and maintenance of a base pay system that is fair.
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WAGE & SALARYBase Wage Salary
As per payment base
Wage is paid according to the number of units produced or sold
Salary is paid according to the time spent for working
As per types of jobs
production and sales employees
Clerical, supervisory and managerial employees
As per time of payment
Daily or hourly Weekly or monthly
As per nature of work
Work is measurable clearly and quantitatively
Work is subjective and difficult to measure quantitatively
As per accounting base
Considered as expenses to calculate production cost or gross profit
Considered as expenses to calculate net profit
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FACTORS AFFECTING PAY Government legal requirements Trade unions Cost of living Demand and supply Productivity Financial ability Competitive pays
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PAY MANAGEMENT PROCESS
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CHALLENGES FOR PAY MANAGEMENT
Prevailing wage or salary rates Union power Wage and salary policies and
adjustments Pay secrecy and pay openness Competency-based pay Vs
skilled- based pay13
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QUESTIONS/SUGGESTIONS
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