CIPD 5HR03 Assignment Example | The Reward for Performance and Contribution
Evaluate the principles of reward and its importance to organisational culture and performance management. (AC 1.1)
The concept of reward includes a variety of elements that impact the reward strategy and the ways in which it is implemented and managed within businesses.
The Total Reward Approach
In terms of employee rewards, the organization’s goal is well captured by the Total Reward Approach. This method proposes to gradually motivate staff members by offering a combination of monetary and non-monetary incentives. Rewards are more than simply financial gains; they also include chances for development, advancement in one’s career, on-site child care, and recognition (Gupta et al., 2022).
Intrinsic and Extrinsic Rewards
It is imperative that reward systems have both extrinsic and intrinsic motivators. Attaining an intrinsic incentive such as a sense of purpose might improve job satisfaction. Conversely, extrinsic rewards, such as bonuses and pay increases, are primarily focused on monetary incentives. To sustain high levels of employee motivation, it is imperative to maintain a careful balance between these components. Numerous internal and external factors, as well as external sources themselves, can impact this motivation (Gupta et al 2022).
Equity and Openness
Empirical research has demonstrated that maintaining employee satisfaction and loyalty requires compensation systems to be perceived as equitable, transparent, and consistent while accounting for individual performance. A fair distribution of benefits based on performance and effort is ensured by equity. In order to foster equity among all employees and eventually benefit the organisation as a whole, it is imperative that the compensation system be consistent across the board (Kim, 2021).
Recognising Performance
Acknowledging and appreciating employees’ contributions can be a strong incentive for good performance since it encourages them to match their efforts with the organization’s strategic goals (Gupta et al., 2022). For example, production teams may be motivated by the success of their product releases, while sales staff may find inspiration in the accomplishments linked to the income they bring in.
