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Rewards

Introduction:
Reward system is a major set of Human Resources Management activity which is devoted to monetary rewards such as pay wages or salaries, fringe benefits and incentive schemes. Examples of fringe benefits are allowances of medicals, housing, education, pension plans etc. In recent years benefits make up a less percentage of the total payroll than they did in the past decades in large organizations and governments for cost concerns while incentive schemes might be widely introduced for the purpose of pay-for-performance in order to boost bottom line results.

Main body:
In today’s competitive business environment, the ultimate objective of a business is to create a workplace environment that is filled with both natural work reinforces (intrinsic rewards) and external rewards and recognition, all directed to those behaviors necessary to achieve results that make a difference. In achieving this, companies rely on different reward systems. It means that companies are seeing the compensation program differently then 'just paying for performance'.

The objective of reward system is to motivate staff to achieve organizational goals. Reward system may refer to some internal and external factors for the variety of wage mix. Internal factors include compensation policy organization, worth of job, employees’ performance, skills and ability. External factors include the condition of labor market, wage rates of areas, cost of living, collective bargaining power, legal requirements and government policies.

There are three types of decisions which can be made for a wage mix. They are pay level, pay structure and pay individuals. Pay level is the choices of payment from low to high level; pay structure is the method of pricing different job salaries and wages within the organization whereas pay individuals a similar job but rate salaries different for different employees who may have different performances.
When it comes to the...