reward system.doc

Human resource Student name:UOG NO:Table of contentIntroduction2Definition of reward system.3Objective of reward system.4Reward system model.7Recommendation.10Conclusion11Reference.12TITLE: What key elements would you advise managers to bear in mind when introducing a reward systemIntroductionAs the economic consistently development in the worldwide in modern times, which drive multinational corporations with high technology as well as the other economic element improved rapidly, in this process of development, talents plays an important role and which cannot be replaced, but in the context of managing talents, the reward system always plays the core role, which emphasizes a core facet of the employment of relationship, there is role happened in anywhere any time, that is employees working for their employers and in return receiving a level of payment or reward. (Tsun J. C, Shang P. Y., I-Jan Y. 2007) According to Beer et als research in 1984, reward already become one of the four human resource management policy areas incorporated in the companys governance. And in process of companys improvement, the design and management of the reward system still is one of the most difficult HRM tasks for the general managers. Definition of reward systemReward system is a kind of style of the companys reward for their employees, the reward system implementation and the relationship between effectiveness of performance evaluations are very important for all aspects of performance management. It is very obvious that put the performance evaluation results and reward together will make the performance management system becomes very effectiveness. Reward in the business can be divided in to direct pay, such as salary and wage, and the indirect monetary payment or benefits paid to various categories of worker. (Philip L., Mark N.K. Saunders, Adrian T. 2004) The new reward system is established on the old pay system, which is argued in modern times, were designed to suit extensive specialization and hierarchical as well as static organizational forms, on contrary, the new reward system displays very flexibility, good new pay practices go hand in hand with a more uncertain business environment and organizational and work configurations.Objective of reward systemIn order to design the reward system, what the first thing the managers need to know is the objective of reward system for the company, so that the managers have goal-oriented, then everything will become easy.The first objective of reward system is to support the organizations strategy, which is very important for a company, strategy is the reflection of the companys mission and vision, its the most important factor to cohesion the employees together in the company, also, the strategy of the company designed the blueprint of the company, and the company basis on this goal-orient to make plan and implement, according to the strategy, the heart level of the company to decision the companys developing direction, to organize the companys competitive strategy, long-term development planning as well as the short-term development planning, which including the market strategy, brand strategy, financing strategy, technology development strategy, talent development strategy and the resource development strategy. All these strategies above finally are service the companys development. so, as a part of the human resource strategy, reward system of course have to obey the company development strategy. (Yu Z., Yingying Z., ngeles M. S., 2011)The second objective of reward system is recruit the qualified employees, qualified employees always the power to drive company go ahead, and qualified employees usually is the people who has the professional knowledge and the high skills as well as the enough experience, and always play the irreplaceable position in the companys development. I order to recruit the qualified employees, the human resource management department of the company have to develop more superior conditions, which under the companys current situation and promote improve. (Michael A., Duncan B. & Peter R., 2011)To retain the capable employees so that turnover is held to an acceptable level is the third objective of reward system. The finally aim of the company is their benefit, and the only way is to get turnover maximize, and the company always consider their interests first but employees, but they have to retain the employees to crate values for them, so, the company always meet the problem between their benefits and employees, from this point of view, to establish a reasonable reward system is very necessary and its as a kind of knowledge.Ensure the internal and external equity is the fourth objective of the reward system of the company, to be equity is the most difficult thing in the corporation governance, there is no pure justice in the world, especially something is related with money and interests, so as in the reward system, to keep balance between internal and external is very important, as soon as employees feeling equity in the company, they can cooperate tightly and crate the maximum value for the company, otherwise, the company will face the risk of failure. (ngeles M. S., Domingo R. S., 2011)Be sustainable within the financial means of the organization, which is the fifth objective of reward system should to achieve, reward always related with money, and the excitation just via the money or relative style is the most realistic and plays the real role. (John S., 2011) So, the sustainable using the financial means in the company is necessary for the companys development. Motivate the employees to perform to the maximum extent of their capabilities as the sixth objective of reward system, the meaningful of human resource department exist is most maximum and most effective achieving benefits of the company, via a series methods such as recruitment, training, rewarding and so on, the only aim is to let employees to perform to the maximum extent of their capability so that to achieve the maximum interests of the company. (Christelle T., 2011)Strengthen the psychological contract of the company is the seventh objective of the reward system should do, through the direct pay, the employees get the satisfaction in material, and which eliminate the concerns in life for employees; but via the indirect monetary payments paid to various categories of worker, such as using bonus reward or materials reward even the encouraging excitation words, which not only can strengthen the psychological of the company, but also can make employees get more satisfaction. (Alexander M. 2011)Promote organizational citizenship is the eighth objective of the reward system, via the reasonable reward system, the company can get respect in society and the people in the company can get recognition and praise in the society. Whats more, to comply with the legal regulations also is the reward systems function need to do; and the last objective of reward system is be efficiently administered, so, no matter the style of the reward, the common aim is the efficiently administered and achieve the benefits. (Cristina C., Shainaz F., Luis R. Gomez-M., 2011)Reward system modelThe managers not only need to know the objectives of reward system, but also need to know how to establish the reward system, and elements in the reward system can reflect the strategies of the company. There are five basic building blocks that the model contains, the first one is a strategic perspective, the second is reward objectives, the third is reward options, the fourth is reward techniques and the last is the reward competitiveness. Below is a kind of pay system: STRATEGIC PERSPECTIVECost leaderDifferentiationFocus REWARD OBJECTIVERecruit and retainPerformanceCommitment REWARD OPTIONS Base payPerformance payIndirect pay REWARD TECHNIQUESJob analysisJob evaluationAppraisal Organizational REWARD COMPETITIVENESSLabor marketProduct marketStrategic perspectives focus on those reward choices that support the organizations strategic goals. According to the contingency theory, the reward system in every company should be dependent on its external contexts and internal contexts. The external context means the companys globalization and international environment, in order to become the more cost-effective company, the business have to compelling to downsize, the external context also means the strongly influenced from international development to the national contexts; and the national contexts including the companys structural change in the labor market, the restructuring in industry, the shift from traditional work to the knowledge work, national contexts also include the social trend and political trend. So, any perfect reward system should consider the companys external environment and internal environment, thus, the company can be development consistently. (Jeffry A. T., Stephen S., 2004)The reward objective emphasize that the linkage between a reward system and human behavior. In the new reward system, the human behavior should including membership behavior, which is about to recruit and retain a sufficient number of qualified labors for the company, which is the guarantee for the business consistently development, qualified workers can make company achieve maximum benefit; (Daniel L., 2010) and task behavior is about to motivate employees, so that they can flexible and perform to the fullest extent of their capabilities, and via this measure, both the employee personal values and the company values get a fully achievement; and the last is compliance behavior, which is related to encourage their employees to follow the workplace rules as well as to obey the law principles, as the same time, employees undertake special behaviors beneficial to their organization, and no super vision or instructions contained. And through these behaviors, the reward system design becomes meaningful and valuable. (William G. D., Jeffrey H. D., 2010)Reward options belong to employers and its the third component in the reward system, it can be divided into base pay, performance pay and indirect pay, can be seen in the form upside. For any company, the reward system always depend on the companys organization styles and their strategies, how to select the reward style and how to assessment employees for manager always the difficult topics, generally speaking, most employees are particular interested in the effort-related behaviors of employees, and those behaviors are directly or indirectly influence the achievement of the organizations objectives. (Clint S., 2011) So, in the reward options and reward system implement process, the subjective factors of manager plays an important role.Reward techniques are the fourth component in the reward system, the traditional concept just emphasized the internal equity, which refers to the comparisons between jobs or skill levels inside organization, and the internal equity established through the job analysis, job evaluation and appraisal, and after this process, the reward can be implemented, but in the modern theory, reward techniques also include the external equity, which established and breached on the internal equity. (Robert K., Angelo K., 2009) So, for the relative managers in the modern corporations with high technology, they should consider the both internal equity and external equity, under the context of meeting employees benefits, the business should do something useful for society.Reward competitiveness is the fifth component of the reward system and its referring to the comparisons between the organizations pay and that of competitive organizations. The competitive in modern society becomes more and more intense and already full of everywhere, so, in order to retain the excellent staffs for the company, the managers have to consider their position and make comparisons with their competitors, their payment level and styles as well as other payment factors in the reward system should be considered by the pay leader. (Robert L. M., John H. J. 2010) In reality reward system, there are three elements to constraints the parameters in the organization, and the labor market is the first factor, then is the service market or product market, the last is the organization. Every organization has to spread the competitive with others in the excellent staff recruitment and retain. Basis their business characteristics, all pay leaders and managers should make full account of relative factors, and try the best to treat equity for both internal and external. (V. Kumar. 2009)Recommendation In order to design a reasonable reward system, what the first factors need to deeply consider is the business objective, which depend on the business culture philosophy as well as the mission and goals, they provide the company direction and development aim; whats more, the reward necessary consist elements is another important factor to consider for managers, what elements effect the reward system and how to effect the reward system will be the main body in the reward system establishing. ConclusionNational win depend on their corporations, corporations win depend on their excellent staffs, the company in order to make their staffs fully play their functions and effectively complete the task, and finally get maximum interests for the company, the managers have to establish the reasonable reward system and consistently to mobilize it, so that to attract more and more excellent employees for the company.References Alexander Michalski. 2011, Strategic International Human Resource Management: Compare and Contrast Different Approaches to Strategic International Human Resource Management, GRIN Verlag ngeles Montoro-Snchez, Domingo Ribeiro Soriano. 2011, Human resource management and corporate entrepreneurship, International Journal of Manpower, Vol. 32 Iss: 1, pp.6 13Clint Swindall. 2011, Engaged Leadership: Building a Culture to Overcome Employee Disengagement, John Wiley and SonsChristelle Tornikoski. 2011, Fostering expatriate affective commitment: a total reward perspective, Cross Cultural Management: An International Journal, Vol. 18 Iss: 2, pp.214 235Cristina Cruz, Sha