ASSIGNMENT

REWARD SYSYTEM OF BLUE COLLAR AND WHITE

COLLAR EMPLOYESS

SUBMMITTED TO :-

Ms. RUPALI KUMAR

SUBMMITTED BY:-

NITIN NAYAL (97)

PRIYA SINGLA (108)

MBA II B
WHAT ARE REWARDS?

Employees don’t work for free. Most businesses are not volunteer services, so you have to compensate
them in some way for their time and effort. What used to be called “pay” and then became
“remuneration” is today often termed “reward”. It refers to all of the monetary, non-monetary, and
psychological payments that an organisation provides for its employees

From the organization’s point of view, rewards are intended to motivate certain behaviors. But under
what conditions will rewards actually motivate employees? To be useful, rewards must be seen as timely
and tied to effective performance.

One theory suggests that the following conditions are necessary for employee motivation.
1. Employees must believe effective performance (or certain specified behavior) will lead to certain
rewards. For example, attaining certain results will lead to a bonus or approval from others.

2. Employees must feel that the rewards offered are attractive. Some employees may desire
promotions because they seek power, but others may want a fringe benefit, such as a  pension,
because they are older and want retirement security.

3. Employees must believe a certain level of individual effort will lead to achieving the
corporation’s standards of performance.

As indicated, motivation to exert effort is triggered by the prospect of desired rewards: money,
recognition, promotion, and so forth. If effort leads to performance and performance leads to desired
rewards, the employee is satisfied and motivated to perform again.

REWARDS IN THE ORGANIZATION

It is through the organization's reward system that good employees are attracted to the organization,
decide to stay within the organization and then conciously decide to perform well. Employees perform at
the level at which the organization rewards them.

People continue to do what they have been rewarded for doing. This is a form of positive reinforcement.
Yet managers must know what rewards mean the most to which employees in order to be the most
effective. To give John a bigger office when he actually responds better to more money does not elicit the
desired performance over the long run. An inappropriate reward has been offered. This mismatch of
reward with the individual may have the same ultimate effect as giving no reward at all.

Therefore, the astute manager must know each employee and what rewards will effectively motivate
them. In addition, the manager must be constantly aware of the rewards available in the organization. To
compensate for rewards not available, the manager must be creative and work within the boundaries of
the organization to create a menu of rewards for staff members.

REWARD SYSTEMS CONSIST OF THE FOLLOWING ELEMENTS:

Financial Rewards – Compensation

1. Base Salary

2. Pay Incentives

3. Employee Benefits

Non-financial Rewards

1. Intrinsic Rewards – centers on the work itself

2. Praise, recognition, time off and other rewards given to the employee by peers or superiors.

TYPES OF REWARD

Many managers believe that people only work for money. However, you must remember that there are
two basic types of reward.

There are extrinsic rewards, which cover the basic needs of income to survive (to paybills), a feeling of
stability and consistency (the job is secure), and recognition (my workplace values my skills). In
Maslow’s Hierarchy of Needs, these are at the lower end. We could also call these the financial rewards.

On the other hand, there are intrinsic rewards, the most important of which is probably job satisfaction,
a feeling of completing challenges competently, enjoyment, and even perhaps the social interactions
which arise from the workplace. These are at the upper, self-efficacy end of the need hierarchy. We could
also call these psychological rewards.
OBJECTIVES OF REWARD SYSTEM

Reward systems have three main objectives: to attract new employees to the organisation, to elicit good
work performance, and to maintain commitment to the organisation.

ATTRACTION

A reward system is intended to attract and retain suitable employees. An employer who develops a
reputation as “cheap” is unlikely to be desirable in the job market, because potential employees will think
it does not reward effort. Such an organisation is likely to end up with the people that nobody else wants.

A GREAT PERFORMANCE

Rewards are also intended to maintain and improve performance. As we have stated in earlier articles,
nobody can truly motivate: employee motivation can only come from within. But the promise of a bonus
or a pay rise is intended to encourage employees to motivate themselves to reap the rewards. reward
systems – page 2 of 4 Performance-related pay is very popular in today’s organisations. In Canada, over
70 per cent of companies offer it in some form. Some companies have three different kinds of
performance-related pay: individual, team, and organisation. The main problem with individual
performance-related pay (IPRP) is that it assumes that pay alone motivates workers, but this is not
correct. Consider the intrinsic rewards or psychological rewards mentioned earlier. A worker with high
pay but who receives no intrinsic rewards will probably go elsewhere.

COMMITMENT

The reward system also serves to maintain and strengthen the psychological contract. It indicates what
behaviour the organisation values, i.e. what is paid for. For example, if your company values teamwork,
then there will probably be a team bonus of some kind.

WHY REWARD?
An organization's reward system serves both internal and external functions. The internal benefits include
increased job performance, decreased absenteeism and decreased turnover. A good reward system
motivates people to work harder. Increased productivity, therefore, saves the organization money in both
overtime and additional employees. Better motivated employees have a lower absenteeism rate and
remain in the job longer. These two conditions save the organization's resources even more
Externally, the organization is able to attract better people. Those seeing employment opportunities are
more attracted to an organization offering a better reward system. Then once in the organization, the
reward system often determines if the employee will stay and then ultimately, if he will perform.

Punishment, the opposite side of the coin from reward, is not as effective in evoking long-term changes in
performance. Numerous behavioral studies have proven that the use of positive rewards produces the
desired results better than punishment. Negative reinforcement tends to disrupt the behavior temporarily
and may often have undesirable side effects.

Rewards are an incentive to workers. The anticipation of the rewards, however, is the real incentive. It is
this anticipation that spurs employees on to perform in the ways which the organization rewards.

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 BLUE-COLLAR WORKER

A blue-collar worker is a member of the working class who typically performs manual labor and earns

an hourly wage. Blue-collar workers are distinguished from those in the service sector and from white-
collar workers, whose jobs are not considered manual labor.

Blue-collar work may be skilled or unskilled, and may

involve manufacturing, mining, building and construction trades, mechanical work,maintenance, repair
and operations maintenance or technical installations. The white-collar worker, by contrast, performs non-
manual labor often in an office; and the service industry worker performs labor involving customer
interaction, entertainment, retail and outside sales, and the like.
 WHITE-COLLAR WORKER

The term white-collar worker refers to a salaried professional or an educated worker who performs

semi-professional office, administrative, and sales coordination tasks, as opposed to a blue-collar worker,
whose job requires manual labor. "White-collar work" is an informal term, defined in contrast to "blue-
collar work".

THE BEST WAYS TO REWARD EMPLOYEES

Every company needs a strategic reward system for employees that addresses these four areas:
compensation, benefits, recognition and appreciation. The problem with reward systems in many
businesses today is twofold: They're missing one or more of these elements (usually recognition and/or
appreciation), and the elements that are addressed aren't properly aligned with the company's other
corporate strategies.
A winning system should recognize and reward two types of employee activity-performance and
behavior. Performance is the easiest to address because of the direct link between the initial goals you set
for your employees and the final outcomes that result. For example, you could implement an incentive
plan or recognize your top salespeople for attaining periodic goals.

Rewarding specific behaviors that made a difference to your company is more challenging than rewarding
performance, but you can overcome that obstacle by asking, "What am I compensating my employees
for?" and "What are the behaviors I want to reward?" For example, are you compensating employees for
coming in as early as possible and staying late, or for coming up with new ideas on how to complete
their work more efficiently and effectively? In other words, are you compensating someone for
innovation or for the amount of time they're sitting at a desk? There's obviously a big difference between
the two.

he first step, of course, is to identify the behaviors that are important to your company. Those activities
might include enhancing customer relationships, fine-tuning critical processes or helping employees
expand their managerial skills.
When business owners think of reward systems, they typically put compensation at the top of the list.
There's nothing wrong with that, since few people are willing or able to work for free. But the right
strategy should also include an incentive compensation plan that's directly linked to the goals of your
company for that period. You might want to include some type of longer-term rewards for key individuals
in your organization. Historically, this has often included some form of equity ownership.

Benefits are another type of reward in a strategic reward system, and your employees are definitely going
to notice the types of benefits you provide. Companies that don't match or exceed the benefit levels of
their competitors will have difficulty attracting and retaining top workers. This is one reason an
increasing number of businesses are turning to professional employer organizations like Administaff to
gain access to a broader array of company benefits.
However, you can't diminish the importance of recognition and appreciation as integral components of a
winning strategic reward system. These two elements rarely receive the attention they deserve from
business owners, which is amazing because they're the low-cost/high-return ingredients. Employees like
to know whether they're doing good, bad or average, so it's important that you tell them.
Recognition means acknowledging someone before their peers for specific accomplishments achieved,
actions taken or attitudes exemplified through their behavior. Appreciation, meanwhile, centers on
expressing gratitude to someone for his or her actions. Showing appreciation to your employees by
acknowledging excellent performance and the kind of behavior you want to encourage is best done
through simple expressions and statements. For example, you might send a personal note or stop by the
employee's desk to convey your appreciation. Another approach is to combine recognition and
appreciation in the form of a public statement of thanks in front of the employee's co-workers or team,
citing specific examples of what they've done that has positively impacted the organization.

Now that you know what it should include, it's time to review your strategic reward system. Does it
address compensation, benefits, recognition and appreciation? Is it aligned with your remaining business
strategies? Is it drivingthe right behaviors for your company, as well as your performance goals? If it
needs fixing, don't wait. It can mean the difference between your business' success and failure.

REWARD POWER

Reward Power can be gained from one's capacity to reward compliance. Reward power is used to support
legitimate power. When someone is rewarded or might receive a potential reward such as through
recognition, a good job assignment, a pay rise, or additional resources to complete a job, the employee
may respond in kind by carrying through with orders, requests and directions, according to Gibson et al.
(1991:331).

Rewards often comprises financial remuneration. They can also be intangible as well. Studies have
revealed that verbal approval, encouragement and praise can very often be very positive substitutes in
place of tangible rewards. Experiments involving positive reinforcement and behaviour modification in
the classroom or work setting revealed that verbal rewards could consist of: '  extreme politeness',
' compliments', and 'praise' for past behaviour.

Non-verbal rewards might comprise: "Giving individuals in the other party more space at the table"
Nodding of the head to signal your acceptance and that you approve; "Eye contact to indicate attention"
and "By using open and non-aggressive gestures to designate acceptance and respect."

Rewards could also consist of verbal promises to gain financially by establishing a relationship.

Ingratiation is occasionally referred to as the 'art of flattery'. It is one example of the use of reward power
in social settings. Friedman, Carlsmith and Sears (1974) provide a fascinating synopsis on the affect of
ingratiation in interpersonal situations. Many of us realize that if other people like us, they will be more
prepared to perform favours for us. On the other hand, we are also aware that they will be less likely or
carry out actions if they dislike us. " Individuals seeking to increase others' liking of them can convince
these persons that they share basic values or are similar in other ways. "

The most common tactic of ingratiation in negotiation is to complement the abilities of the people whom
you wish to influence. This tactic, frequently referred to as "other enhancement" often entails the use of
flattery - the exaggerated praise of others. Such a tactic usually succeeds because people tend to like the
flatterer who is praising them.
It is common that the use of reward power seems to be very effective, particularly in the longer term.
Reward power is occasionally combined with coercive power, although the two different forms of power
can be subject to semantic confusion. It is important to understand coercive power before comparing it
with and measuring it against reward power.
 PRACTICAL SECTION

WITH ARTICLES AND BENEFITS

AND REWARDS OF DIFFERENT
COMPANIES
 SUCCESS STORIES
Schools Leading the Way
 A large urban school district lacked leadership, employee engagement, and public trust. Part of
the problem; 26 different performance evaluation forms which were neither relevant to the employee's
work, nor helpful in holding people accountable. With a new superintendent and strong executive
leadership, PDG was engaged to create an effective, efficient evaluation system & tools that support
successful schools, individuals and departments, and enhance best professional practices system-wide.
PDG's highly collaborative approach allowed the District to adopt a set of core competencies which cut
across ALL jobs and we designed a methodology to engage managers & employees in selecting relevant
position-specific competencies that would ensure that people are focused on the right things. In addition,
we were able to form and facilitate a 'joint task-force' with the Teacher's Union and Management to create
a performance management and evaluation system that everyone could support for ratification at the next
bargaining agreement. In less than six months the school district had a new Performance Management
system that provided clarity of goals and performance standards, created a much higher degree of
accountability for both managers and employees, and established a much higher degree of transparency
and feedback.
 WHAT IS GOOGLE DOING FOR ITS EMPLOYEES?

We’ve all heard Google is the best company to work for. Here’s why: all meals included healthy
snacks likewise. Plus, you can bring your pet to the office, you get free massages when you feel stressed
and you have access to laundry machines, a lot of gyms, on site doctors, free bikes to get to work, they
pay young families after the first baby and many more.

According to Hazel Rosin, professor of organization studies at York University’s Schulich School of
Business:

A positive work culture is one in which people feel valued and respected, and where employers see you as
a human being and not just someone who’s there to do a job.

GLAXOSMITHKLINE

As top players pharmaceutical industry these guys know the definition of healthy employees. A
lot of multinational companies offer on site fitness gyms, but only GSK seems to do this in style.

Imagine coming to work and taking yoga and cycling classes, and even visiting
your nutritionist between breaks. All these are complimented withhealthy food choices on both
the cafeteria’s menu and in the snack bowls offered during meetings.

The vice-president for business development and chief information officer, Savino DiPasquale
claims that:
If you have healthy employees, they have more energy to do their job.

TCS COMPANY

The bonus banks also helped in sustaining performance from the individuals, with close relationship
between pay and performance. There was an increased sense of belonging among the employees and the
employees were motivated to increase their contribution as they were also equally benefited by the
increase in EVA. 

EVA was not just a performance metric but an integrated management process aimed at achieving long
term goals. One of the major benefits of implementing EVA in TCS was increased transparency in the
organization. The internal communication within a unit had increased considerably. The decision making
process became more decentralized...

KAJARIA

The employees of kajaria are benefited in no.of ways:-

If the targets completed by the employess then

1. The employees are sent on free tours with families.

2. There is an increment in employees salaries and perks.