In every company, they provide rewards to employees. Rewards is being implemented to attract, retain and motivate qualified employees. It can boost the morale of employees and change the health of an organization. By the appraisal and reward systems, company lets its employee know that hard work pays off and is appreciated.
Money is valuable for the goods and services it purchases. Money is important to employees for several reasons. The money we receive may serve as a reward to ourselves and also we can give it as a gift to our love ones.
In addition, money distinguish every employee from another. One good example is the Project Managers’ and the Field Engineers’ salary in a general contractor. The Project Manager receive high compensation than the Field engineer who receive average compensation only.
We have motivational models that is useful on money as a reward. The application of the motivational models are drives, needs, behavior modification and equity. Along with the drives, employees monitor their salary and compare it with others. The pay that he received are a measure of accomplishments. If the employee received low salary but with high responsibility, he will think twice on his value in the company. This will result in bad quality on his work because he may think that the money he receives is not enough to the workload.
There a lot of employees who leave their job because of comparison of salary to the workload. Companies must implement the proper alignment of salary to the tasks being cascaded.
Second application of the motivational model is the Needs; it is considered as a short-term motivational value. It is obvious that all of us need money to survive in our daily living. So, if the company provides enough money to the employee, and other company may provide also the same or higher amount of money. So, if given a chance, employee will choose the company that he is comfortable with the workload and the money that he receives. This will threaten worst company.
We know that money is considered also as motivation to work. This motivation comprises of multiplication of Valence, Expectancy and Instrumentality. An example of this is a person exerts work effort, so this means he expects something in return. A question pops up into his mind like, “Can I achieve the desired level of task performance?” He then realizes, “What work outcomes will be received as a result of the performance.?” And explains Instrumentality. The Valence/Ability to unite are work related outcomes, “How highly do I value work outcomes”? This summarize, EFFORT (Confidence) result to PERFORMANCE (Trust) then there will be OUTCOME (Value) to come up with MOTIVATION.
The third application of the motivational model is Behavior Modification. It shows the level of performance in relation with the level of economic reward giving an instrumentality condition. Employee is productive when he receives a good incentive and what the company pays for the employee, that will be the employee will return. He/ She will only do the task equivalent to the payment received. And The fourth application is Equity where it is considered as cost-reward comparison or break even analysis that is used in financial assessments.
What we do or how we act to the responsibilities that we received from our superiors will determine the award or salary increase we are going to receive from the company. So Nowadays, company hire the best employees in order to survive in the competitive industry. A company set process to obtain high performance from employees. First process is Objective Setting, it is an informal conversation between the manager and employee. During the first period of stay in the company, the manager will discuss the polices that involves the setting of objective. For example, Angel is the manager, they will have a short meeting with Marie (the employee) in a conference room. This is a one on one discussion on to the objectives of Marie that she will do during her stay in the company.
Take note, that during this time, the objectives must be SMART or
S- Specific
M- Measurable
A-Achievable
R- Realistic
T- Time based
The second process is Action Planning wherein this is participative or independent planning on the part of the employee to obtain the objectives. The employee will plan or strategize things rationally. For example, one of the Objective is to become a member of Philippine Institute of Certified Quantity Surveyors-PICQS. So, to achieve this, the employee will study RICS Books of Policies and standards and apply the previous experiences in work. And must pass the interview from the head of the organization. Some consultancy firms require their employees to enter in this organization for them to practice their field more. This organization provide members some CPD seminars.
The third process is periodic reviews which is a joint assessment between the manager and the employee. This is Informal. They may set it monthly or quarterly or It depends on to the standard of the company. In here, they will discuss the progress of those objectives being set. And It is also an open conversation between them stating what they like or don’t like in their job.
The last process is Annual Evaluation wherein this type is a formal assessment. There are forms to be fill up and assess. This serve also as a basis in the percentage that employees get in their incentive. If they perform well, they will receive higher incentive. This process is renewable, wherein every year there must be a new goals or objectives. This will also help employee in their professional development. During this period, employees must be well prepared.
In general, performance appraisal plays a role in the reward system. It is a process of evaluating the performance of every employee in the company. An open communication is vibrant in this part.
The Economic Incentive System measure are amount of output (sales/commission), quality of output (commission only for sales that are without bad debts), success in reaching goals (bonus for selling), amount of profit (profit sharing), cost of efficiency (gain sharing), and employee skills (skill-based pay). The advantage of this incentive is employee do their best in their job to obtain high incentive. The disadvantage is superiors cannot monitor always the work of every employee. Somehow, some will get a low incentive if they are not known by the head. Cost is a factor in this also.
The wage incentive is basically means more pay for more production. The advantage is strengthening instrumentality beliefs, create perceptions of equity, reinforce desirable behaviors and provide objective basis for rewards. The disadvantage is cost on the part of both employer and employee, system complexity, declining or variable pay, union resistance, delay in receipt, rigidity of the system, and narrowness of performance.
Another reward given by company is the Profit sharing. It is distributed during the completion of the building, turnover to the owner or finishing a short contract to a client. There are also negative or difficulties in this type. When an employee exerts more effort to finish the structure ahead of schedule, it doesn’t mean that the profit to get is high. Also, If the company will only offer profit sharing and do not have other incentive. Some employee will not do their best because in achieving this, they will wait for a longer period.
Gain sharing plan is another group incentive. It is a program that measures improvement of the organization and share the gains from the employee. We also have behavioral basis and they encourage employees to give their opinions. Incentive was given for team work and better communication.
Last type is Skill Base pay; it is sometimes known as knowledge-based pay or multi-skill pay. More intelligent employee will receive higher pay. That is why if the employee tops the board exam, employer will chase him because they believe that he has a lot of skills that can help in achieving the goals of the company. This type provide motivation to employees to develop their skills and the disadvantage is when the employee has more skills, the rate is higher.
To summarize, the complete program of an employee is base pay, performance rewards and profit sharing. This are the money we receive from the employers in exchange to the services we contribute.
