Reward System Flexibility
“A reward system in an organization must be flexible.”
The global movement of labor and capital, the shift from manual to technology-driven employment process, technological development and service sectors’ growth has changed the nature of work and management priorities in terms of how employees are rewarded. The rivulet of literatures and researches are alive and strong on issues like reward system management and reward strategic planning is concern. To speak about rewards and rewards management is tantamount to speak of motivation, strategy, performance, and production. We should understand that these factors are vital in the life of an organization especially when it comes to managing and exploiting the potentials and skills of human capital. Employees are symbolically represent as the main capital of an organization in which it exploit, explore, and use their inherent and acquired skills and abilities for the benefit and development of an organization. However, although human capital is exploitative and sometimes abused in a more radical and Marxist understanding, this ideology is not explicit in the eyes of the subject because of organization’s strategic use of empowered and beneficial programs for them. In this sense, reward system is fundamental in hiding the Marxist ideological elements of exploitation and abuse to the employees or workers at large. Yet, this is beyond the task of this paper.
Due to the increasing global competition and hyper-competitive technology markets make a broad scale of industry to recognize the criticality of making innovation for new products for its long-term performance and survival in a volatile environment. Moreover, many studies contend that reward system plays a critical role in motivating employees to perform creatively. Extrinsic rewards stimulate employees’ creativity and motivates them to work better and perform an innovative performance in their chosen field of interest and expertise. (2000) believes that “while establishing relationships between different jobs and occupations which meet the needs of internal equity is a primary concern in the design of pay systems, linking these pat and grading structures to the external labor market and keeping pay levels competitive is also a vital concern.” Other factors have pressed employers to take a more strategic approach to pay such as increased competition in product markets and in key occupations that will lead to a more emphasis on performance, productivity, and cost controls. Furthermore, (2006) states that the objectives of a reward management system include, “the attraction and retention of the type of skills and competencies needed by the organization, the influencing of performance and behavior at work to achieve organizational objectives and the matching or improvement on competitors in terms of pay and non-pay aspects of reward.”
However, it is important to identify basic assumptions and a principle in which the idea of reward system must be flexible is grounded. A research study of (2006), examines the factors affecting individuals’ innovative performance in R&D department of an organization. The research’s findings relate the idea that “organizations should discerningly offer extrinsic rewards to those who are likely to benefit from them like employees with positive attitudes toward their work.” Additionally, given that employees with positive attitudes are likely to generate more creative outputs, rewards should only be targeted at specific employees with the right job attitudes. This is because, “rewards that are channeled to employees irrespective of their attitudes would be largely unsuccessful in encouraging creative output.” Such discriminatory idea points to the necessity of an organization to adopt a well flexible strategic management on rewards system rather than making an egalitarian and unified form of reward system. The basic assumption is that in large corporations with several different businesses multiple reward systems are encouraged. (1987) believe that “even if they share some fundamental philosophies and values, they may differ according to the particular business setting, competitive situation, and product life cycle. Thus multiple reward systems can support multiple cultures or subcultures within one organization.” (1996) suggests that a reward system should differentiate between good and poor performers. Not all employee turnover is harmful to organizational performance. A reward system should promote the retention of good performers and facilitate the decision of poor performers to leave.
It is quite clear with this discussion how an organization should and must apply reward flexibility. The assumptions above are quite far to the common notions and assumptions, but are technically valid. Our principle is that, organization with diversified skills and abilities yet thrive to create a homogenous culture still retains the individuality of each employee. Therefore, organizations’ recognition and understanding of the complexity of the agents inside an organizations’ structure highly posits an individualistic approach to reward management system. The reward system must be flexible in this sense. Either an organization’s mode of reward system is hierarchical-based or performance-based, it still make sense that flexibility of reward system can be integrated or incorporated. Even an organization is striving to gain an egalitarian environment or to be elitist does not affect the need to have a flexible reward system. In Marxian doctrine, man’s labor is equivalent to his own human value and what he/she brings in to the workplace is the reflection of his value as a human capital. So, such should be given a proper compensation, although, the value of labor one exerted cannot be totally compensated by any resources, in whatever ways, it could only satisfy.
What one strives to work for and exert more of his/her time to create a better performance and innovative work to an organization should only be given a proper reward for it. That is why, organizations, seeing the diversity of skills and talents that employees are performing should make rewards flexible and that is to satisfy the value of the work done or made by a worker. As (n.d.) describes, “top management used the reward system because reward system is often seen as a powerful tool for promoting, shaping, and managing organizational culture in line with business strategy.” The flexibility of reward system will not only create an egalitarian and harmony to organization among its members but also creates on the part of organization competitive advantage and competitive performance level.
References:
Credit:ivythesis.typepad.com
0 comments:
Post a Comment