Reward Systems - A TopTek Case Study

Essay by lemonsunriseUniversity, Bachelor'sA, April 2007

download word file, 5 pages 5.0

The Harding (2004) case study brings to light a range of different problems faced by the TopTek organisation, most of which stem from unsuccessful or nonexistent reward systems. TopTek faces human resource management (HRM) issues common to many organisations in the areas of recruitment, retention and organisational culture. As these issues can all be linked to the organisation's reward system, an analysis and reform of this system may provide answers to these issues and enable the organisation to become more competitive and successful.

A reward system or reward management is the aspect of HRM in an organisation that deals with the administration of remuneration. Organisations can use two types of rewards for goal achievement: financial and non-financial. Financial rewards refer to compensation with cash value such as salaries, bonus pay, stock options and benefits. Non-financial rewards include recognition, training and psychological characteristics of work (Heery & Noon, 2001). A successful reward system can help the organisation to attract and retain the best employees whilst promoting a constructive organisational culture.

Attracting and recruiting new employees who are 'right for the job' is one of the key issues of HR. Recruitment has become especially important since the late nineties as the unemployment rate has reduced and the labour market has become tighter. This means greater competition for fewer skilled employees (Bailey, 1998). The Harding case shows TopTek is keen on recruiting new employees with sales skills as well as technical knowledge. This could prove difficult if they do not have an effective recruitment strategy. Implementing a suitable reward system that is congruent with the organisation's goals and business strategy can be a very valuable recruitment tool.

Rewards can be given in many different forms to attract potential employees. The first and most obvious is monetary bonuses. For example, an organisation that produced...