B3.

3
Reward Management
→ management of reward system

Monetary rewards
Time-based pay
→ rewards given to employees in return of their services over a specific time period

1. Base Salary
● a fixed amount of money
● provide important and stable financial support

Advantage Disadvantage

1. Attract talent 1. weak motivational power

● main factor job seekers
consider ● remains unchanged for a

2. Simple
● easy to calculate
long time
→ 表現好同表現差一樣糧 🙁
● fixed amount each time

Performance-based pay
1. Piece rate
● given for every unit of product produced/ task completed
● 適合製造業，不適用於複雜的工作 or job outcome that is hard to measure

Advantage Disadvantage

1. Simple 1. Ignore quality

● easy for employees to
understand
2. Fair
● it links performance
directly to pay
● 客觀
3. Help increase productivity
● encourage employees to
increase efficiency
● 員工想要多啲人工 → 整多啲
● workers focus on no. of unit
instead of quality
2. reluctant to switch jobs
● switch jobs → not familiar
● 因為越熟練，效率越高 → $$$
3. resist new technology
● need time to learn new
tech = earn less during
training period
 product → 公司效率上升
2. Commission
● sum of money given to employees for sales revenue made/ products sold
● 適用於 salespeople
● 通常底薪 + 佣金

Advantage Disadvantage

1. Simple: easy to apply 1. Certain products are ignored

2. Strong motivation
● work hard = more $
● great incentive
● 努力搵客人
3. Increase sale revenue
● work hard to max. sales
● company sales revenue ↑
● focus on selling high
commission products
2. Aggressive selling methods
● e.g coercion to earn more $
● may drive customers away
3. Employees may feel insecure
● rely on 工作表現 = unstable
● insecure → turnover rate ↑

3. Bonus
● one off (usually given once a year)
● given to employees who perform well 表現好先有

Advantage Disadvantage

1. Less financial burden 1. Subject to effectiveness of

● not guaranteed
● perform not well = no need
2. Effective motivator
● must perform well to get
bonus
● encourage
Performance Appraisal System
[P.A.S.]
● if P.A.S. not fair/ biased
● unfair bonus received
2. Unrealistic expectations
● expect to receive
● 今年有，下年都有
3. Time Lag
● time between good
performance and the
reward given
 4. Merit Pay
● salary increase, become part of base salary
Advantage
1. Strong motivation
● become part of base salary,
can be received on a long
term → strong motivator
5. Profit sharing
● incentive given base on a percentage of company’s profit
● NOT become part of base salary
Advantage
1. Less financial burden
● not guaranteed
● only given when company
makes profit
● 無賺錢 → 唔洗俾
2. Align employees’ interest to the
company’s interest
● pay directly affected by
company performance
● company make more → $$$
● improve productivity
Disadvantage
1. Long term financial burden
● become base salary
● need to give every month
● burden ↑
2. Subject to effectiveness of P.A.S.
● P.A.S. not fair → reward
unfair
Disadvantage
1. Profit may be manipulated
● want to earn more
● use financial tactics
2. Weak motivational power
● all employees get same
amount of profit
● think own effort has little
impact on company’s
profit
● 自己喺small potato
6. Stock option
● gives employee the right to buy a certain no. of company’s shares at a
specified price during a specific time period ⭐️⭐️⭐️⭐️⭐️
● only used by limited companies
● employees → shareholders ⭐️
★ Company launches a stock option plan : 做滿一年的員工可以享有員工價 每股
$20
★ Employees can decide to use their stock option and become shareholders 持
份者
★ employees who hold shares may earn return from dividends

Advantage Disadvantage

1. Motivate employees on the long 1. Share price may be manipulated

term
● work hard to increase
company’s stock price
→ in order to earn higher
return
2. Enhance employee’s loyalty and
commitment
● employees become
holders
● try to boost share price to
earn higher return
2. Motivation power depend on
share price
● share price can be affected
by different factors
(e.g. macro-economic
factor)
● share price ↓ , return ↓

Comparison: time-based vs perfornace-based

Time-based pay Performance-based pay

1. Less competition among 1. Stronger motivational power

employees -pay is directly linked to
-not based on performance performance

2. Simple and cost-saving 2. Easier to attract high calibre

-save administrative costs employees
-more attractive than time-based
3. Facilitate planning and budget -can earn more for good
for labour costs performance
Non-monetary rewards
● compensation given to employees in form other than cash
● compensate low salary

1. Employee benefits

Paid time-off ● annual leave

有薪假期 ● sick leave
● maternity leave and paternity leave
● marriage leave and condolence leave
● examination leave

Insurance ● medical insurance 醫療保險

● life insurance 人壽保險

Retirement benefits ● provide pension = 退休金

Flexibility at work ● flexible work hours

● WFH
→ maintain work life balance
→ increase morale

Others ● Staff discounts

● Employee facilities: fitness centre, canteen
● Recreational activities: gatherings, company trips
● Subsidy: education and housing subsidies:

Objectives of providing employees benefits

1. Comply with legal requirements
e.g.
● statutory holidays 法定假期
● Maternity and paternity leave
● provide MPF schemes

2. Build image as good employer

● good image → help attract talent
● employer award → beings media coverage → strong corporate image
● company stand out from competition
3. Satisfy employees’ different needs
● help protect physical and psychological well-being
● satisfy social, safety and security needs
● enhance productivity and satisfaction

4. Enhance employees’ loyalty

● company can demonstrate its care for employees and their family
● enhance sense of belonging and loyalty
→ better employee relations

5. Supplement monetary rewards

● help attract and retain talented people who have needs or preferences
that cannot be satisfied by monetary rewards
○ 員工 value sense of achievement > maney $
○ company provide challenging tasks
● compensate low salary

2. Training and development opportunities

● show care for employees’ personal growth and career development
● e.g. offer online training courses
● provide promotional opportunities
➔ safety training for construction workers: ensure their safety

3. Recognition & appreciation

● verbal praising for employees good performance
● awards to recognise employees’ contributions
→ increase morale, loyalty (feel valued)

4. Job autonomy and responsibility

● employees gain sense of achievement at work
● companies can:
○ give more job autonomy: allow employees to make decisions on
their own

○ delegate responsibility to employees

→ provide challenging tasks
● NOT SUITABLE for fresh grads, new employees, lazy employees
Advantages of monetary & non-monetary
Monetary rewards
1. Attract talent
● main factor considered by
job seekers
● attractive monetary reward
→ attract capable
employees
2. Motivate employees effectively
● link performance to reward
3. Benefit all employees
● can use cash income to
buy whatever they want
● some non-monetary
reward cannot be enjoyed
by all employees
4. Help maintain employees’
standard of living
● directly support daily lives
Non-monetary rewards
1. Attract and retain talent
● fulfil various needs of
employees
○ need for recognition
and challenge
2. Enhance employees’ loyalty
● make employees feel
valued by company
● company cares about
them
3. Great flexibility
● company can adjust
non-monetary rewards acc.
to budget
● 口頭讚賞 → no cost