Hr Reward Systems
Reward Systems & Incentives
Nathaniel Holmes Geraldo Carvalho Marie Powers Human Resources & Labor Management August 2nd, 2010
Reward Systems, or appraisal systems as it can also be called, are important for any company. A reward system is defined as a structured method of evaluating and compensating employees based on their performance. The compensations and rewards are known as incentives to the employees. The incentives can be bonuses in pay or added vacation or sick days, among other things. Reward systems can help to boost company morale, as well as productivity levels which increase overall revenue for the company. However, there are a lot of negatives that can come with reward systems if not implemented correctly. Sometimes, instead of helping with the company morale, it can hurt it by making some employees feel insignificant if the same people are being rewarded over and over again. Reward systems can be tricky if not implemented and carried out correctly, but when used effectively can have great positive impacts on the company and its employees. There are three main types of reward systems commonly used by most companies: MBO, BARS, and the Multi-Rating Assessment. Each one comes with its own advantages and disadvantages. MBO, Management By Objective defines the specific skills and actions of a certain job. The defined skills and actions need to be as clear and specific as possible. An advantage to using this method is that it engages the employee in the evaluating process; therefore they learn and understand the entire process. A disadvantage of this particular method is that it is extremely time consuming. In large companies, this might not be the best method to use because it would take the supervisor conducting the evaluations away from his or her other job responsibilities. Another disadvantage is that the goals can be too vague to make it clear enough to quantify any results. MBO is the most popular among most companies.
The BARS,
Nathaniel Holmes Geraldo Carvalho Marie Powers Human Resources & Labor Management August 2nd, 2010
Reward Systems, or appraisal systems as it can also be called, are important for any company. A reward system is defined as a structured method of evaluating and compensating employees based on their performance. The compensations and rewards are known as incentives to the employees. The incentives can be bonuses in pay or added vacation or sick days, among other things. Reward systems can help to boost company morale, as well as productivity levels which increase overall revenue for the company. However, there are a lot of negatives that can come with reward systems if not implemented correctly. Sometimes, instead of helping with the company morale, it can hurt it by making some employees feel insignificant if the same people are being rewarded over and over again. Reward systems can be tricky if not implemented and carried out correctly, but when used effectively can have great positive impacts on the company and its employees. There are three main types of reward systems commonly used by most companies: MBO, BARS, and the Multi-Rating Assessment. Each one comes with its own advantages and disadvantages. MBO, Management By Objective defines the specific skills and actions of a certain job. The defined skills and actions need to be as clear and specific as possible. An advantage to using this method is that it engages the employee in the evaluating process; therefore they learn and understand the entire process. A disadvantage of this particular method is that it is extremely time consuming. In large companies, this might not be the best method to use because it would take the supervisor conducting the evaluations away from his or her other job responsibilities. Another disadvantage is that the goals can be too vague to make it clear enough to quantify any results. MBO is the most popular among most companies.
The BARS,
Cited: Accel Team. “Employee Motivation.” Accell Team. N.p., Spring 2010. Web. 20 July 2010. . Bevan, Stephen. “Reward Systems: Ten Common Mistakes.” Institute of Employment Studies. IES, Spring 2010. Web. 26 July 2010. . Cahill, Andrew. Personal interview. 29 July 2010. Carpenter, Susan. “Design the Right Compensation Plan for your Company.” Entrepreneurship. The Kauffman Foundation, 1 June 2008. Web. 27 July 2010. . Cooper, John. Personal interview. 29 July 2010. Messmer, Max, and Anne Bogardus. Human Resources Management. Danvers: John Wiley & Sons, Inc., 2008. Print.