A Reward system is about providing the monetary, non-monetary and psychological offerings that a company gives to the employees to enhance their performance and job satisfaction. Two types of Reward systems are there such as tangible and intangible rewards. A tangible reward system comes with materialistic objectives, vacations and money. An intangible reward system comes with facilitates a healthy work culture among the employees. When a company starts giving rewards to the employees they feel valued and motivated which increases productivity for fulfilling the business goals. Therefore, the Reward system is an integral part of the business organisation in order to increase the engagement and retention of employees.
Why is the Reward system important?
Rewarding employees is very important to incorporate better employee engagement that makes a positive environment at the workplace. Rewarding and recognizing show appreciation and respect for the efforts of employees.
Several factors are included in the reward system such as motivational level organisational value, organisational culture, people management performance management governance job design and the competitiveness. If your company is starting to implement a reward system you should think about the factors that can benefit them in the long run.
Nowadays, employees are more interested in work-life balance, self-development and lifestyle rewards than getting only financial incentives. Hence a company should focus more on providing a healthy work-life balance and healthy work culture so that the employees feel their best to enhance their performance.
4 advantages of the rewards system
- It built up the employee value proposition
The employee value proposition (EVP) is all about the offerings that a company provides to the employees. An effective reward system is an essential part of this EVP. EVP comes with non-monetary and monetary facilities that increase the Productivity level of the employees and bring the best out of the employees.
- It helps to retain top talents
An effective Reward system also helps to attract as well as retain top talent in your company. If a skilled employee is interested to join your company, he will consider the facilities or extra incentives that a company provides. You can also show them how they will be benefited from the compensation and reward management system during the recruitment stage.
- It enriches the brand image
Having an effective reward system helps your organisation to keep employees loyal, happy and engaged with the company. It also encourages the employees to work harder which contributes to creating a good brand image.
- It encourages teamwork
An effective system not only motivates the individuals but also instils a sense of collaboration and teamwork. The team members should ensure that they have equal opportunities to get appraisals and rewards.
If your company gives value to the employees they feel more encouraged and motivated to work harder for meeting that target of your organisation. It creates a motivating factor inside them to enrich their performance level that can be fruitful in transforming the company to a great extent.