Rewards management; best fit or best practice?
HR academia has suggested that rewards management may have limited financial and motivational benefits, and yet it is practiced widely.
Question
Discuss the assertion that rewards management is more best fit than best practice.
Answer
Rewards management is based around the principles of motivating employees through financial and non-financial rewards for good performance (such as meeting targets). This makes use of the underlying psychological theory of positive reinforcement.
Rewards management is practiced in many different ways by different firms. This is due to the diversity of situations making no single approach applicable in all scenarios. For example, the bonus schemes that are available to CEO’s are not relevant to cashiers.
In HR academia many questions have been raised about the success of rewards management, with theorists suggesting that it provides minimal motivation and performance benefit. In addition, it has been linked to a practice known as ‘gaming’, where employees find ways to maximise the rewards they gain whilst putting in the least effort. This is associated with other negative practices such as falsifying information in reports, omitting information and harmful competition between staff.
While the negative aspects or shortcomings of rewards management are often hard to detect the cost is quite evident through the cost of rewards, and the cost of monitoring and administration.
It is also the case that rewards, once implemented, are hard to remove, as staff may effectively consider it a pay cut.
Despite these limitations rewards management is a widespread practice that is used as a fundamental HR tool in many organisations. Its popularity among businesses suggests that the approach has some tangible benefits. Some roles, such as salesmen, incorporate rewards management as a core aspect of the employees’ remuneration. It is clear that in many cases rewards management is a key motivator in a role, and even a motivator for career selection.
It seems then, that while best practice (or even any practice) in reward management is disputed, countless organisations still find ways in which they can make its usage work for their organisations.