Organisational Reward Systems

Essay by lemonsunriseUniversity, Bachelor'sB+, September 2006

download word file, 5 pages 3.0

Paolo Bradley (1996) suggests an effective reward system can both support and reinforce the business objectives and the corporate culture. Consequently it is of paramount importance that TopTek's employee reward systems is perceived being as fair and meaningful by it workers. This report discusses three human resource activities that are significantly influenced by employee reward systems; organisational culture, recruitment of staff and performance management.

Reward Systems

Reward systems are designed by businesses as a means of compensating employees for their contributions. Appropriate reward systems are important to organisations as they can used as an incentive for goals to be achieved and to influence the level of motivation amongst employees. For example, if monetary increases are offered to employees who attain certain production levels then workers may be more highly motivated to reach the target. Monetary rewards have a recognised cash value, for example base pay, pay increases, bonus pay, stock options and benefits which may appeal to cash-motivated employees.

However, other employees may have a preference for more money, but find the extra effort for the monetary rewards not worth giving up the time spent in other activities (Bushardt, Toso, Schnake 1981). As a result, reward systems must often contain a nonmonetary component for those employees with different values. Workers who are motivated to succeed and gain promotion are offered nonmonetary rewards with less well-known cash value such as promotion, recognition and training (Heneman, Fisher, Dixon).


Reward systems also improve the success of recruitment strategies. Recruitment is the process of selecting an appropriate person to fill a job vacancy either internally, from within the organisation via promotion, or externally, through outsiders applying to join the organisation (Heery and Noon, 2001). A good recruitment strategy is crucial to financial success in a competitive industry such as the Information Technology market.