Objectives and Factors Considered in Reward Systems - Essay Example

Cheesy Pizza Company was established in the early 1980s and operated as Tricon Global Restaurants. Its contract was terminated. Pizza started its brand in 2001 and has grown and established outlets in Saudi Arabia, China, United Arab Emirates, Myanmar, and Bahrain. Currently, the company is the largest Company in Thailand as a fast food restaurant. This essay aims at identifying the factors Cheesy Pizza management will look into when formulating a reward scheme for the employees and the managers, the objectives of a reward scheme, factors that must be taken into account in the formulation of the scheme its implementation.

It is crucial for Pizza Company to note that creating an effective and efficient performance management and rewarding system aims at pushing the Organizations performance outcome to its maximum. The pillar of good performance is in any organization is the Companys system of giving incentives and rewards to its employees. All employees from the subordinate to the top management need to be appreciated through rewards and incentives. In order to develop an effective reward system, there are a number of factors that need to be put into consideration. A coherent reward and remuneration system incorporates the behaviors and expected results from the employees. To develop an efficient, rewarding scheme, the Human Resource department and the entire Pizza Company executive need to be guided by the following key elements of an effective, rewarding system;

Make sure that the employees are fully aware of the incentives and how the employee will achieve the reward.

An incentive becomes effective when it is registered in ones mind. It is important for the Cheesy Pizza Company management to communicate to its employees of the contents of the reward system so that the employee will know how to behave. The employee being aware of the system will be positively influenced to work fully to get the reward. The management should communicate the reward system to the employees more often or repeatedly and in different forms. Positive acknowledgment needs to be passed on to the employee in the most specific manner. For instance, an employee who prepares the best meal at Cheesy Pizza can be commended like; The way you prepared the meal was excellent and professional.

The employee must attach value in reward.

Employees tend to shy away from rewards that have little or no relevance to them. The employee will not be motivated to work or do what it takes to achieve the reward. Employees as human beings are different and what is appealing to one may not be appealing to the other. To make rewards relevant, engage employees in formulating the reward scheme. Get to know what appeals to the employees to avoid time wastage and resources developing a scheme that will not appeal to the employees. Employee motivators are complex, and they result from actions that are either internal or external. In developing a motivation scheme, engage employees to give in order of prevalence the motivators that they deem valuable to them. Make the rewarding system as flexible as possible to allow many rewards

The employee must see the value the reward has as outweighing the effort that he or she will apply to achieve it.

Some rewards are of high value, but if the effort required to get the reward is insignificant as compared to the effort applied to achieve it, the employee is unlikely to change behavior. In fact, the reward can act as a demotivator. If in case the sales team manages to sell pizza worth millions of dollars, the management should reward the employees in proportion to that. If not so, the employees morale and motivation will be affected negatively. Also, avoid variance in rewards. The scheme must be uniform or have slight differences across departments. If employees in one department perceive their counterparts in other departments as being rewarded more than others, this leads to a drop in their motivation.

The employee must see the reward directly resulting from his/ her effort and behavior.

The employee must be in a position to attach the reward given to work done. If the attachment is not attached to the behavior, the employee will find no motivating factor to achieve the reward.

The rewarding scheme must be timely.

As soon as the desired result is achieved, the reward needs to be administered as soon as possible. Delaying the reward will make the employee miss to see the connection between the behavior and the reward. In a rewarding scheme, split it in such a way that rewarding is not only at the end of the year when employee appraisal is done. Once the behavior is demonstrated, give the reward immediately whether monetary or non-monetary.

The rewarding system needs to be consistent.

Once a rewarding system has been developed, consistency in its application is paramount. An employee who is expecting a reward and eventually the reward is not given; the employee behavior will either be weakened or diminished. An organization that promises an end of year treat for its employees like bonuses, if the bonuses are given in one year and miss in another, employees give up. If on the other hand, the employees are not expecting a reward, then it is not necessary to reward even if the behavior is demonstrated. Rewards need to be administered with sufficient frequency and consistency.

Cheesy Pizzas management applying these principles in its incentive and rewards scheme will be the starting point for high performance in the organization. The rewards and incentives need to be monitored to assess their effectiveness more often than not. Both the employees and the management need to take measures that will positively impact on the desired results. The scheme will need to be reviewed more often based on these key elements based on the idea that nothing stands still for long (Amah, 2013).

Objectives of a rewarding Scheme

Cheesy Pizzas executives need to put in mind that a reward system or scheme is an initiative aimed at encouraging employees to engage in productive engagement to achieve the objectives of the organization. The rewards may take the form of bonuses, salary increment, more off-time or any other form of awarding a job well done. A reward system is aimed at recognizing members of staff who surpass their set targets in various departments like customer service, sales and marketing and administration. Creativity and innovation are also rewarded. The main objectives of a reward system or scheme include;

To increase employee productivity

A good rewarding system must be formulated in such a way that it will offer the employees an opportunity to perform better and increase their productivity. In fact, it is an incentive to put the best an employee can on the job. A rewarding system that is more frequent, say on a quarterly basis creates healthy competition among the employees as well as across the various departments. The scheme stimulates employee motivation to achieve not only their personal goals but also the organizational goals. This will drive the organization to high productivity. For a company like Cheesy Pizza, a comprehensive reward system that specializes in food products will full reap this benefit of employee productivity for maximum customer satisfaction.

To improve employee job attendance.

Any scheme that caters to the needs of the employees and is well applied will automatically improve employee attendance on the job. Cheesy Pizza is a brand that attracts many customers. Once the company enters the Hong Kong and Singapore market, the brand will highly sell. This, therefore, means that job attendance will be of necessity. This is so because absenteeism greatly affects customer service when customers have no one to attend to them, or there is a delay in preparing customer orders. A reward system that is formulated by attendance will enable employees to stay on track; absenteeism will be greatly reduced, and work schedule will be adhered to, hence supporting the bottom line of the organization.

To improve the morale of employees.

The employees morale greatly influences the productivity of an employee. Incentives that are given to employees usually boost morale. Employee productivity is influenced by the morale on the side of the employee. Exhaustion and high rate of absenteeism. If an employee has a bad feeling about the job, chances of insubordination, lateness and poor quality services are high. Business organizations usually formulate a reward system that creates a conducive working environment to improve the morale of employees. Reward schemes and programs have the effect of motivating employees while reducing work exhaustion and burnout.

To enhance Retention.

A reward plan improves the engagement an employee has towards the organization he/ she is working for. It also acts as an inspiration to workers to perform duties delegated to them better and remain in that particular organization for long. In fact, an excellent rewarding system reduces occupational mobility where an employee leaves the business to join a competitor or start a competing business of his/ her own. An employee who feels valued and appreciated accordingly will most likely want to grow his or her career within that particular business. This is called vertical mobility of labor. Thus, a rewarding scheme is a win-win situation for both the employee and the business venture. The employee achieves his objectives while at the same time assisting the Company achieves its objectives.

As Cheesy Pizza Company prepares to develop a reward system, it is important to understand the challenges that come with a reward scheme. These include;

Reward schemes extinguish intrinsic motivation

The internal motivation and drive that keeps employees focusing on the job despite the many challenges are called intrinsic motivation or passion. This passion can easily be affected negatively by rewards. If a reward system is not sufficient enough to commensurate with the employee's output, then the motivation of the employee will be destroyed. Employees at all levels of management work for various reasons. Introducing a reward scheme that interferes with employee motivation is risky to any business venture (Wang and Tam 2014).

Reward schemes can lower or diminish employee performance

Reward schemes that are purely based on performance lowered the performance of employees. This has the effect of also lowering output per worker. This happens in cases where one employee is rewarded, and another employee in the same job level is not rewarded. The overall performance of the employee will be influenced negatively.

Reward schemes hinder creativity and innovation

A reward scheme has the effect of narrowing ones mind and focus mainly on the reward. The employee will most likely concentrate more on acquiring the reward as opposed to coming up with new ideas for improving the products of the business. For instance, employees at Cheesy Pizza need to develop new ways of packaging the pizza delicacies continuously. This is only possible if the employees product innovation department will not be disturbed psychologically on the reward awaiting them and concentrate more on responding to market demands especially in the new market on Hong Kong and Singapore.

Reward systems eat out good behavior.

Rewards have the potential to influence an employees ability to observe morality, especially in decision making. Rewards influence ones interests, values, and morals and lead one to make decisions based on the expected rewards. This will, in the long run, affect the behavior and work. Therefore, the management at Cheesy Pizza should not just reward the managers and employees. Consequently, the decisions that the...