Term Paper: Reward Programs in the Workplace

Pages: 21 (5856 words)  ·  Bibliography Sources: 1+  ·  Level: College Senior  ·  Topic: Careers  ·  Buy This Paper

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[. . .] Therefore, their performance often goes unnoticed in a financial sense. Both organizations and employees will benefit if these issues are discussed openly without hesitation. As pay and performance are ultimately connected, it is in the best interest of those involved to consider these issues as soon as they arise to maintain stable employee morale (72-73).

Rewards should be linked to other areas of organizational change: Rewards should not be based strictly on salary, particularly if employers wish to further enhance employee interest. Successful organizations also openly communicate changes in organizational objectives, provide recognition when it is well deserved, offer opportunities for career development, and provide challenging prospects for professional growth. These opportunities will undoubtedly improve employee loyalty and commitment to the organization, as well as strengthen the organizational framework (73).

Provide rewards for measurable competencies: According to published research, 44% of all human resource management systems utilize competency-based performance measures in their evaluation process. Unfortunately, these competency-based objectives are not aligned with reward programs in most organizations (74).

Match rewards and incentives to the corporate culture: It has been demonstrated that reward systems that reinforce the corporate culture are the most effective. Incentives should be matched to the corporate vision, mission and principle objectives. In addition, management must fully support these objectives in order for them to become successful across all organizational levels (74).

Group incentives must be clear-cut and simple to understand: Rewards must be aligned with corporate objectives, leadership style, team structure, and core competencies. Reward systems that have experienced measurable success in the past have combined direction and power. In other words, business strategy and cultural values provide the direction, and the performance-driven workforce provides the power (75).

Communicate rewards and incentives excessively to achieve the best possible results: This is perhaps most critical to improve organizational performance. Statistically speaking, companies with employees that clearly understand their reward and incentive programs have a much higher shareholder return than those that do not have a clear understanding or expectations of their programs. Furthermore, if employee opinions are openly sought and valued by management, then the organization is more likely to experience improved shareholder returns (75-76).

The work that is performed is the greatest incentive: Employees wish to be publicly recognized for their hard work and improved performance, and it is not always the monetary compensation that matters the most to employees. Organizations must recognize these needs and concerns in order to structure their rewards programs according to employee needs and interests (77).

This article demonstrates the basic principles that should always be considered when organizations wish to design or restructure their rewards programs in order to maximize employee and organizational effectiveness. An alignment with primary business strategy and objectives is the key ingredient to the development of a successful rewards program that will result in improved shareholder return as well as employee satisfaction and improved performance for future years to come.

An article by Bolen and Kleiner entitled New Developments Concerning Work/Family Programmes provides a variety of statistics and other information concerning work/life programs in real organizations. Some of the most important statistics provided in the study include the following:

For every dollar spent on work/life benefits, there is a two to six dollar return in the form of reduced absenteeism, increased motivation, and higher retention rates (76)

The cost of hiring and training a new employee is 93% of the first year's salary (76)

1993 evaluation of Johnson & Johnson indicated that 71% of all employees utilizing work/life benefits valued them as important (76)

26% of parents with children under the age of thirteen had experienced a breakdown of typical child care arrangements in the past three months, and these can result in costs of $3 billion for American businesses annually (77)

Some American businesses also offer some benefits that are considered controversial in some circles: "Xerox takes care of employees' dry cleaning and photo processing. Birthday cakes can be ordered at Marriott's cafeteria. Aetna Life & Casualty offers an in-house personal shopper to buy employees' gifts. Wilton Connor Packaging employees can have their laundry washed, dried, and folded by two in-house workers, and an in-house handyman is available for employees' household repairs. Rhone-Poulenc employees are offered take-home meals prepared by the cafeteria, on-site shoe and jewelry repair, and car repair. Other companies offer massages, pet insurance, in-house financial planning, fitness centers, concierge services, pets to work, time off for volunteer work or parent-teacher meetings, and employees of Starbucks take home a pound of coffee a week" (79).

It has been demonstrated that these types of benefits attract employees to the organization and express a greater commitment to the firm with a lower rate of intent to leave the business (79). Additionally, "First Tennessee National Corp. initiated family-friendly programs three years ago, and have realized clear gains in productivity and customer service. Supervisors supportive of work/family balance retained employees twice as long as the bank average and kept 7% more retail customers. These higher retention rates contributed to a 55% profit gain over two years. The corporation's strategic view is that work and family are not discrete phenomena but touch each other, often profoundly. To create balance and solve the problem, consideration of family issues is built into job design, work processes and organizational structure" (80). Finally, this article notes that "In order for a work/family program to be successful, it must be integrated within the business strategy. The company must encourage balance between work and family. Starting with commitment from the top executives, all management must be educated and held accountable to institute the program. Input from workers should be included in designing the policies, which should be formal, written with guidelines, and available to all employees equitably. Flexibility should be encouraged. Information and education should be readily available to support the employees" (80).

These real-life examples as well as general recommendations demonstrate that reward systems are extremely significant in the workplace, as they possess the ability to offer employees a sense of unity and will ultimately enhance productivity since they allow employees to manage their personal concerns when they see fit, not after the work day has been completed.

The final article by Federico and Goldsmith entitled Linking Work/Life Benefits to Performance discusses the advantages of work/life programs to encourage strong performance from employees. Since employees are consistently expected to perform to their maximum potential, they, in turn, expect to be recognized and rewarded accordingly. As a result, career growth and success is ultimately the responsibility of the employee. In order for these types of rewards programs to enjoy success, they must be directly tied to performance. In this scenario, both the employer and the employee reap the benefits. Federico and Goldsmith state that "The key is to install work/life programs as performance-based benefits, with eligibility and/or subsidy levels tied to employee performance. With some guarantee that the cost of these programs will be returned to the employer in tangible productivity improvements, any employer can put these programs into place and use them to attract and retain the right employees. The critical point is to integrate these benefits into the rewards system" (67). In order for such an endeavor to be successful, compensation and benefits professionals must incorporate work/life benefits as a large component of the firm's rewards program. The most intriguing work/life program is employee flex time, whereby employees are permitted to work around personal commitments by adjusting their schedules accordingly. In many instances, such programs are highly beneficial to the employee, but provide little or no return for the employer, making the program a one-way endeavor. In addition, such programs can cause problems for managers since they are left to make the decisions at their own discretion, since relatively few guidelines exist that must be followed (68). Furthermore, managers that are not required to join flex time with performance will ultimately lose rather than gain from the program.

In order to make this type of program successful, employees must actively demonstrate to their managers that they can productively manage their flexibility. Employees are empowered when they are permitted to arrange flexible work schedules, and this should be considered a significant part of performance reviews. In addition, for employees that necessitate flexible work schedules, performance criteria should be set at a higher level: "For example, employers can establish a waiting period for eligibility for flexible work arrangements, based on service requirements or meeting performance goals. Employees might become eligible after one year of service, for example, or they might become eligible based on their performance ratings in their annual review. The work arrangements would end if their performance falls below a certain level" (69). Generally, work/life benefits such as flex time do not result in high costs to the employer, and they can significantly accommodate the employee. If they are managed properly, work/life benefits can provide employees with the opportunity to improve their productivity, particularly if these benefits are directly tied to performance measures. If employees have the opportunity… [END OF PREVIEW]

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Reward Programs in the Workplace.  (2003, May 4).  Retrieved June 17, 2019, from https://www.essaytown.com/subjects/paper/reward-programs-workplace/7769953

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