Reward Programs in the Workplace Fieldwork Timeline Term Paper

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Reward Programs in the Workplace


Timeline and Budget

Reward and incentive programs are a popular component of employee benefit packages. Many employees value such offerings as flexible scheduling, tuition assistance, and child care in order to satisfy personal needs and professional development. In today's society, it is becoming increasingly common to align these reward systems with the overall business strategy of an organization in order to satisfy business needs and to improve shareholder value. In addition, many organizations are developing or restructuring their rewards programs based on employee performance. This trend is likely to continue as costs continue to increase and competition continues to thrive in a highly volatile economy.

The following will provide an overview of selected research in the area of rewards, benefits, employee performance, and business strategy as they are all related to create unique reward environments in organizations of all shapes and sizes. This research will demonstrate that reward systems are most successful when they are aligned with business strategy and are directly tied to employee performance.

The proposed research study will identify ten distinct organizations in a localized geographic area, and the compensation and benefits manager at each organization will be mailed a short survey that asks a number of questions regarding each organization's existing rewards system. Once the data has been collected, it will be evaluated and presented in report form to identify how employees benefit and relate rewards to morale and performance.


The development of reward and incentive programs in the workplace environment typically provides many benefits for employees that utilize these programs to improve both their professional and personal lives. Organizations are well aware that their employees possess specific needs that may be fulfilled through such programs, such as flexibility and professional development programs. Therefore, it is in the best interest of organizations with ambitions to succeed to evaluate their current benefits packages and incentive programs to identify specific employer needs in order to reduce turnover and improve employee morale. One method that is becoming increasingly popular for many organizations that has been demonstrated to be effective is to directly align employee rewards and incentives with work performance. This initiative ensures that employees are gaining professional experience and are rewarded for their hard work accordingly.

Problem Statement

It is a relatively common perception in today's society that organizations that do not provide their employees with adequate benefit packages and incentives for performance may risk losing valuable intellectual assets in their employees that contribute significantly to the workforce environment. It is also known that these types of programs provide employees with enthusiasm and initiative to fully maximize their performance in order to improve the existing organization. This study will evaluate the retention and turnover rates of a variety of organizations of various sizes and industries against the benefit and incentive packages that are offered and the direct influence that these programs have on employee retention and turnover rates. The programs and initiatives to be evaluated include healthcare and prescription benefits, performance-based compensation increases, tuition assistance, onsite childcare, onsite fitness centers, public recognition for superior performance, flex time, and other benefits such as dry cleaning and complimentary dinner vouchers. The study anticipates at its conclusion that employee benefit and incentive programs can make a significant difference in an employee's decision to remain or to terminate employment in a specific organization.

Literature Review

Organizations must develop mechanisms by which they can reward their employees for a job well done. This can be accomplished by assessing employee needs against the proposed costs of program implementation within the constraints that are evident in the organization. A healthy balance between proposed benefits and costs should be established in order to promote enhanced employee performance and to reduce turnover, without excessively risking the potential loss of profits and revenues. In addition, such programs should make employees feel comfortable with their employment decisions and should also promote growth and improved productivity. The following research conducted by experts in the field will demonstrate various aspects of benefits and rewards programs that may strongly influence employee morale and future output, all of which improves overall organizational success.

An article written by Dolmat-Connell entitled Developing a Reward Strategy that Delivers Shareholder and Employee Value provides interesting information regarding the importance of reward programs in organizational success. The author indicates that today's reward program offerings are largely based on pressures from shareholders and the general public to align executive compensation with shareholder value (46). Furthermore, "The concept of total rewards is not new. However, many organizations that we work with view total rewards from too narrow a focus - i.e., they consider only the program's competitiveness from a total cash compensation or total renumeration standpoint, or they focus only on the total monetary value delivered to employees. Both these perspectives are important but insufficient. In order to be truly effective, organizations need to think about total rewards from a higher, more strategic perspective" (50-51). In order for these programs to enjoy success, they must be closely aligned with previously defined business strategies, and must be incorporated into the general human resource strategy of the firm. This situation is critical to achieve a sustainable competitive advantage in the industry of choice.

Shareholder value is obtained and secured when organizations maximize their internal processes to promote employee longevity and contentment with the firm's practices and treatment. In addition, as human capital is increasingly valued in organizations as a means of competitive advantage, and in some instances, this is viewed as the sole reliable source that an organization possesses in a competitive market. Therefore, in order to retain the services of value employees that provide intellectual capital, they must be committed to the organization wholeheartedly, and this is not necessarily a simple task to achieve. On the contrary, employees must feel that they are considered valuable intellectual assets, and in order to satisfy this objective, employers must provide adequate rewards for exemplary performance. These employees must be considered more than a means to fulfill a set of defined responsibilities; rather, they must be viewed as a valuable investment in order to improve their enthusiasm and to reduce the likelihood that they will leave the organization (47).

Human resource managers can play a significant role in satisfying these objectives through strategic alignment with business expectations.

According to Dolmat-Connell, "Reward systems are a critical component of an integrated and aligned total HR system...when fully effective the reward system focuses on behaviors that lead to success, enables the organization to achieve a competitive advantage, uses a portfolio of integrated systems and practices, develops and adjusts to changing conditions, and creates a win/win for the organization and the individual" (48-49). Rewards systems must include the following primary components (49):

Behaviors: Define the differences in organizational performance and must include focus, competencies, and feedback

Alignment: Organizational strategy and the chosen set of rewards must be aligned to sustain a competitive advantage

Synergy: The degree to which rewards programs work in combination to produce value for employees

Creators of rewards programs must be careful to maintain the appropriate focus in the development of such programs. Maintaining a focus merely beyond the financial aspects of rewards will ensure commitment to the endeavor. Furthermore, the chosen rewards should be designed to motivate the entire workforce in the long-term. Finally, rewards must be directly linked to sustaining shareholder value in order for them to be deemed effective (50).

The development of a comprehensive rewards strategy must be carefully considered. It must be aligned with the business strategy in order to maximize effectiveness. The following steps must be measured in creating a rewards program (51-52): 1) Identifying the organization's key success factors, 2) Identifying the behaviors and actions necessary to implement the chosen strategy, 3) Determine how the rewards program can reinforce behaviors geared toward success, 4) Determine what is required to make each reward a success, and 5) Determine how current programs match the newly defined requirements.

This article discusses the primary means by which organizations must view the rewards process in terms of shareholder value and human capital. The next component of the discussion will identify the most important components of established reward plans.

An article by Hale and Bailey entitled Seven Dimensions of Successful Reward Plans provides an analysis of the important components of reward systems. It is anticipated that as employees invest their time and commitment to an organization, they will be increasingly valued and recognized accordingly through various opportunities for rewards. Such rewards do not just include salary, but also consider tuition assistance, flexible work schedules, stock options, merchandise, and travel opportunities (71). Rewards that are closely connected to business strategy will increase shareholder value, as employee performance is maximized and financial returns are greater. Superior business results are attainable if the following seven principles are utilized in daily business practices:

Superior performance should be rewarded accordingly: Although this concept seems a bit primitive, many employees do not believe that their employers take this into consideration, although employees clearly recognize…[continue]

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