What are the different rewards systems in HR Management?
Answers
he achievement and benefit received by employees for their job performance in an organization are known as reward. Employees join the organization within certain expectation of reward. Some may be expecting for better salary and wages i.e., economic rewards while other may be seeking for facilities like accommodation, transportation, health, safety and other benefits as reward. Thus, economic and non economic benefits provided by organization to employees for their job performance regardless of their expectation is known as reward
DIFFERENT BENEFITS AND REWARD PRACTICES
The Performance-based pay system
In this technique, the incentives are paid to the employees when they perform according to the expectations of his/her role in the organization. But this technique has many limitations also as there start an internal cold war among the employees if someone gets the incentives. This can deteriorate the team spirit, and it can ultimately lead to dissatisfaction among the employees who do not get the performance-based pay.
Competency-based pay system
The competency-based pay or popularly known as CBP is the new technique which is being adopted by many organizations. In the process of CBP, the primary emphasis is given to the knowledge and the skill set of the employees. This can be considered an extension of the performance-based pay system only where it gets a new direction by adding the elements of capabilities and competencies in it. The drawback of this method is that it is very complicated to judge the actual skills of the individuals which are favourable to the firm. Moreover, if the HRM will pay emphasis on the individual goals, then they can lose track of achieving the strategic targets of the organization.
Team-based Pay system
High-performance teams are building blocks of any successful organization and therefore it is highly crucial for individuals to work interdependently in tightly knit groups. Many companies keep their teams on priority, and they reward the employees who showcase their ability to work in different teams or may in the same team efficiently.
Flexible benefits and rewards
Every individual has different criteria for feeling secure and happy, and the HR professionals have to know about it and design the reward system according to that. Therefore the companies these days are considering to include the flexible pay in the CTC of the employees, and they can avail this money to get the different benefit as per their requirement. The elements which are included in the flexible pay system are life cover, healthcare vouchers, pensions, bonuses, sponsored holidays, flexible benefits, and profit sharing etc.
Recognition system
The recognition is the method of reinforcing the new behavior in the individuals and teams. This is the symbolic way of praising the initiatives and performance of people so that they feel happy and want to repeat that behavior. The companies also adopt recognition system of rewarding for modifying the conventional reward systems.