The corporate culture of the 1980s in the United States and around the world focuses on personal rewards as motivated individuals can transform their organizations and societies. An extreme example of the film was Gordon Moonlight on Wall Street, who claimed to be greedy. However, in the 1990s, companies were traumatized and went bankrupt due to improper use of wages as a motive. However, a company’s great success is based on a compensation-based compensation system. The recent Phones 4U and Allied Dunbar in the financial services market are early examples.
The well-known Barrings Bank had individual traders with millions of bonuses, but in the long run, these ambitious individuals did not meet the company’s goals. In addition, even if an individual’s reward system is based on very good performance indicators, it can lead to the success of the organization and be rewarded, but it can still cause problems. There is a big gap between the salary of senior managers and the salary of middle managers. A payment system that suppresses or motivates 10 people for everyone who motivates them may not be the best for your organization.
Therefore, a savvy organization should reward and motivate all staff to promote short-term and long-term business interests and act vigorously to feel treated fairly. will do. However, there must be an appropriate link between the rewarded item and the actions you can take to influence the desired outcome.
A wise organization accepts it:
• It is reasonable for individual managers to act in their best interests.
• Managers work for people, not organizations, and want to please their closest boss, or if they fail to do so, please a group of their peers.
• Managers are attracted to tasks that they want to accomplish and know they can succeed. Usually, short-term is prioritized over long-term.
The clear implication is that an organization must lay the foundation before relying on a reward structure to change its performance and behavior. In other words, the management and organizational system needs to be balanced with the compensation system.
There are five main prerequisites for setting up an effective reward structure.
1. Measurement: “You can’t get it without measurement.” There are various measurement systems that set some goals and the Balanced Scorecard used by Tesco is probably the most well-known.
2. Follow-up: If performance measurements are not tracked properly, or only during year-end reviews, this allows managers to indicate that they are not really important. .. To make matters worse, if all managers fail, the failure is okay. together.
3. Managing Tools for Work: Organizations need to ensure that individuals are not overly dependent on factors beyond their control in order to achieve defined performance measurements (this is for work). The “method” part.’Expression).
4. Consistency: Make sure that short-term organizational factors do not overwhelm the manager or distract him from his true purpose. Organizations also need to ensure that their own design (whether bureaucratic or flexible) is appropriate for what managers need.
5. Reward and Online Strategy: Achieving a clear strategy by your organization is not an upcoming event. It’s a journey. Compensation systems can be implemented in an organization, even if the strategy is relatively unclear, by referring to the strategy and the “balanced scorecard” to resolve organizational and administrative disputes. Only then will the organization be pressured to improve its strategy, structure, and reward system.
Based on these five prerequisites, there is a checklist of 10 elements that an effective reward and reward structure must meet.
1. Support business strategy
2. Encourage desirable behavior
3. Reward related performance
4. Be fair
5. Be substantial
6. Be financially efficient
7. Be timely (rewards must be close to outcomes)
8. Incorporate non-monetary rewards (recognition can be as important as money)
9. Solid (bonuses lost due to failure to reach the goal should not be recoverable, but salary increases should be delayed until the goal is achieved)
10. Be transparent