I have had the privilege of listening to and learning from several world class human resources (HR) practitioners in the ongoing Chartered Institute of Personnel Management (CIPM) conference. I would like to share simplified versions of some of the valuable information with my crypto/business colleagues. An organization’s reward system is one of their greatest tools for driving value creation. Since your employees are the ones who help the organization achieve results, it makes absolutely sense to keep them happy and in return, they give you value via their enhanced productivity. Before setting up your rewards system you need to be aware of both your internal and external contexts. Both would determine what kinds of rewards would be of maximum benefit to your organization.
This involves you to view your organizational culture holistically. Examine both your human resource strategy and your business strategy and ensure that they are aligned to achieve your preferred reward system specially tailored for your employees types. For example, do you employ young attractive people most of the time? If you do, you must know that they will definitely be or become baby boomers so one of your organization’s rewards or benefits can be free creche facilities.
These are those not under your purview yet still affect your organization directly for example, government policies, the economy, the socio-political environment and the kind of industry you are involved in. All these are also rather cogent when creating your total reward model. For example, in an industry where government policies change regularly, you would need to use a flexible and easy to change work/pay structure in order not to acquire too much losses if the policies are not favorable. This can be achieved by having contract/short term workers as opposed to full time staff.
Two Important Effects of Reward System on Employees
Humans are not like computers nor machines, they are very dynamic and have various needs. When their financial needs are met, they are subsequently able to take care of several other needs like housing, shelter, feeding and self actualization. A well compensated worker is usually a satisfied worker.
Another pointer that your employees are well rewarded can be seen in their level of engagement with the organization. Well engaged employees have high ratings as such things as solving problems, using their discretion and going the extra mile, performing at optimal level, working with greater accuracy and being resilient. They are passionate about their jobs and committed. Their goals are usually in alignment with the goals of the organization.