Rewards as a key issue of HRM

Reward systems as a key area of HRM.
Rewards motivate people.



The design and management of reward systems present the general manager with one of the most difficult HRM tasks. This HRM policy area contains the greatest contradictions between the promise theory and the reality of implementation. Consequently, organizations sometimes go through cycles of innovation and hope as reward systems are developed, followed by disillusionment as these reward systems fail to deliver.

People do not work for nothing and they need to be rewarded. There are three main types of rewards. The first one and as the majority of managers think the most important one is Monetary rewards. These are directly, indirectly or unrelated to actual performance outcomes and include, for example, basic salary, commissions, profit sharing, corporate performance related annual bonus etc. Money is the core motivator for employees. Especially nowadays when the number of virtual organisation is rising, monetary r...