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Culture Documents
Reward System
Reward System
Organizations would be far less effective systems than they actually are if economic rewards were the only, or even the principal, means of motivation available. There is no such thing as a good pay system; there is only a series of bad ones. The trick is to choose the least bad one.
Reward Systems in most cases should be consistent with other HR systems. The Reward System is a key driver of: 1. HR Strategy 2. Business Strategy 3. Organization Culture
Reward objectives
Any organizational reward system has three behavioural objectives: 1. membership behaviour to recruit and retain a sufficient number of qualified workers 2. task behaviour to motivate employees to perform to the fullest extent of their capabilities 3. compliance behaviour to encourage employees to follow workplace rules and undertake special behaviours beneficial to the organizations without direct supervision or instructions.
Performance-related pay is open to subjectivity and inconsistency, and can create tensions which undermine workers intrinsic motivation. All may result in a breach of the psychological contract, weakening employee commitment. Reward practices are dictated by perceptions of power between labour and management. Pay systems will change according to their effectiveness in the effort-wage relationship with the balance of power.