Blog 7 - Managing reward strategies in organizations to increase employee performance, retention, and productivity
The management of reward strategy, which ensures
organizational well-being, has frequently been stressed in organizational
discourse. This is due to the fact that one of the most basic issues of reward
management is how it may help encourage people to attain high levels of
performance, secure their retention, and increase output in the firm (Armstrong
and Stephen, 2005).
The term ‘’reward‘
is discussed frequently in organizational literature as something that an
organization offers to the employees in response to their contributions and
performance and also something which is desired by the employees (Agarwal,
1998).
The objective of a reward plan
- to design policies and procedures that will attract, retain, and inspire high-quality workers
- to assist the attainment of organizational goals and offer fair and equal compensation for all employees (Armstrong, 2012).
Impact of
Rewards and Incentives on Employee Performance, Retention and Productivity in
Organizations
Many firms that must compete in the global dynamic market are concerned about employee performance and retention in this highly competitive business climate.
Employee retention is emphasized as one of the most
important indicators of an organization's health (Nwokocha, 2014). This is
because losing any essential person has a large financial impact on the firm,
especially considering the information that is lost when an individual leaves.
This is unique and specialized knowledge that is applied to suit the demands
and expectations of clients.
Scholars have claimed that competent employees who had transformed their skills into organizational value wished to be compensated for their abilities and performance. They went on to say that skilled workers also seek competitive remuneration, as well as possibilities for growth and development (Frincke, 2006; O'Neal and Gebauer 2006; Zingheim and Schuster 2007).
All of these factors encourage employees to improve their performance, stay with the company, and increase production.
Reward Strategy development framework
Conclusion
This article focused on how to manage incentive strategies in firms with the goal of proving their effectiveness in terms of employee performance, retention, and increased productivity.
It was recognized that two forms of organizational incentives, financial and non-financial awards, and stated that one of the most important problems of reward management in an organization is how to leverage people to improve workplace performance, assure retention, and increase productivity.
It should be noted that the organizational rewards have a
favorable association with work satisfaction. As a result, employee
performance, retention, and achievement of corporate goals are all boosted.
Employees will be demotivated if the organization's incentive approach is
regarded to be unfair and unreasonable.
References
Nwokocha, I., 2016. Managing reward strategy to
enhance employee performance, retention and productivity in organizations: A general
overview. International Journal of Development and Management Review, 11(1), pp.20-38.
Rubino, J.A., 1997. A guide to successfully managing employee performance: Linking performance management, reward systems, and management training. Employment Relations Today, 24(2), pp.45-53.
Mehmood, S., Ramzan, M. and Akbar, M.T., 2013. Managing performance through reward system. Journal Of Humanities And Social Science, 15(2), pp.64-67.
As discussed, managing employee rewards and recognition is a very important role of HR managers. When employees are properly rewarded, recognised and appreciated, it will increase their morale and engagement levels. This will in turn increase productivity. When employees are happy they are more committed which will reduce absenteeism and turnover levels.
ReplyDeleteAs previously said, HR managers play a critical role in handling employee awards and recognition. Employee morale and engagement will rise when they are properly paid, recognized, and appreciated. As a result, productivity will rise. Employees that are satisfied are more dedicated, which reduces absenteeism and turnover.
ReplyDeleteEmployees will establish a meaningful link with the company if there is a good reward management system in place. it will reduce the staff turnover also. Good article.
ReplyDeleteEmployee retention is a big problem for many organisations. Organizations must understand the necessity of retaining their most productive employees. High turnover will result in the loss of valuable employees as well as the revanue.
ReplyDeleteAs you mentioned, Reward systems have also been shown to influence an employee's decision to come to work or to remain with the organization. Good job
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteReward management is an crucial function of the HRM. It is directly affected to the employee retention, productivity and also employee satisfaction. Rewards can be used as motivational factor to increase employee productivity and profitability such as incentives, bonus payments etc. You have covered several aspects of reward management and it impact. Interesting topic and very good article.
ReplyDeleteWhether we realize it or not, we all need to feel respected and appreciated at work in order to accomplish our best.
ReplyDeleteRecognition has a big influence, especially among employees, and it may help build a healthy company culture.
Employees appreciate and are motivated when they are openly recognized for a job well done. Employee accomplishments and positive characteristics are highlighted, resulting in a more vibrant, healthier workplace. Praising employees for their accomplishments fosters high performance, which benefits both the individuals and the company.
Good article Chathura
employee recognition is very important for an organization to retain talented staff. Further, the staff who are recognized have to be rewarded to feel important. Therefore a proper rewarding system should be implemented. Your article clearly describes the importance of a rewarding system. Good Luck.
ReplyDeleteAs discussed in article, Employee awards may be viewed as a more concrete form of appreciation for your employees who have produced high-quality work or demonstrated exceptional performance levels.
ReplyDeleteIt may be argued that incentives are slightly more expensive for corporations since they frequently take the form of bonuses and profit-sharing.