COMPENSATION AND REWARD

MANAGEMENT

ASSIGNMENT 1

Submitted By:
 NITHYA N(PES1201802342)
 SUJAN SHANKAR(PES1201802550)
 AKSHITA GOPAL (PES1201802566)
 ANJALI KS (PES1201802183)
 DISON P.S (PES1201802310)
1. Briefly interview on phone an employee in his/her 20s, 30s, 40s and 50s, and 60s.
Determine what motivates employees from different generations and design
compensation plans for each generation that would result in high performance?

Solution:

AN EMPLOYEE OF AGE 20 (GENERATION Z-GEN Z)

This generation people are right on the heels of Millennials and, they're starting to enter the
workplace. They say that they are motivated by social rewards, mentorship, and constant
feedback. They also want to be meaningful and be given responsibility. Like their
predecessors, they also demand flexible schedules.

Other ways to motivate this generation is through experiential rewards and opportunities for
personal growth. They also expect structure, clear directions, and transparency. This is the
most diverse generation and many Gen Z workers are bilingual/multilingual. They are true
digital natives with short attention spans. They will not classify themselves. Nonetheless,
they are eager to work, motivated by job security, and they want to contribute to meaningful
work.

COMPENSATION PLAN:

 Millennials value benefits choices, paid time off, ability to work remotely, control
over their schedules, and a great deal of flexibility.
 They feel more comfortable asking employers for more perks and compensation
without planning to stick around very long.
 According to recent survey by workplace coaching company Inside Out Development
32% of Gen Z’ers believe that they deserve a promotion within first six months of
working.

AN EMPLOYEE OF AGE 30 (GENERATION Y)

In most cases, they have no problem jumping from one organization to another.

They can be motivated by offering skills training, mentoring, feedback.

They want to work in an environment where they can collaborate with others. Flexible
schedules, time off, and embracing the latest technology to communicate are also important
for Gen Y.

COMPENSATION PLAN:

 One top concern for Generation Y people is their salary.

 The Y’ers have grown up getting rewards for good behaviour and they are expecting
the same thing in their working life, at the job the Y’ers are expecting mainly
financial rewards.
  Although the salary itself is important to the Y’ers, they also rank other benefits, for
example health and dental care, and paid vacation, as important incentives when
looking for, and staying at, a job.
 They will not accept a low salary with a promise of raises to come later. Instead, they
expect the effort that they put in to pay of instantly.

AN EMPLOYEE OF AGE 40 (GENERATION X)

Gen X workers are motivated by incentives tied to individual results, access to the best office
technology rather than the corner office, and work/life balance that includes a flexible
schedule. They work hard and play hard.
They say that they also want options in tasks, challenges, and new processes and freedom to
use their own resourcefulness to achieve success, too. 
Gen Xers can be motivated by flexible schedules, benefits like telecommuting, recognition
from the boss, and bonuses, stock, and gift cards as monetary rewards.

COMPENSATION PLAN:

 Gen Xers value salary level, a retirement plan with matching benefits, job security,
advancement within the company, and opportunities for work-life balance.
 Gen Xers desire pay increases tied to their own performance, and personal rewards for
results.
 They also expect coaching to be focused equally on improving both strengths and
weaknesses.

AN EMPLOYEE OF AGE 50 (BABY BOOMERS)

Boomers are often ambitious, loyal, work-centric, and cynical. They prefer monetary
rewards, but also enjoy nonmonetary rewards like flexible retirement planning and peer
recognition. Since Boomers are so goal-oriented generation they can be motivated by
promotions, professional development, and having their expertise valued and acknowledged.
Prestigious job titles and recognition like office size and parking spaces are also important to
Boomers.

They can also be motivated through high levels of responsibility, perks, praise, and challenge.

COMPENSATION PLAN:

 Baby Boomers value salary level, health insurance, and a retirement plan.
 Many baby boomers don't fight the system and will put up with bureaucracy and are
more willing to operate "status quo."
 They look for job security.
AN EMPLOYEE OF AGE 60 (TRADITIONALISTS)

Since these people are 60 years of age, we don't see many of them in workplace. However,
they still impressively make up around three percent of the workforce.

This is the generation who firmly believes in an "Honest day's pay for an honest day's work."
They're extremely loyal and enjoy being respected for that. Since they're conformists, they
value most job titles and money.

COMPENSATION PLAN:

 Traditionalists often need creative compensation packages.

 They crave appreciation and recognition and enjoy the satisfaction of a job well done.
 They focus on flexibility, so they can spend time with their grandchildren, and will
often stay on board to ease the knowledge gap.
 They desire traditional benefit packages, defined benefit retirement plans, and
conventional vacation/time off.
 Traditionalists want coaching focused on improving their strengths.

2. What are advantages and disadvantages of organizational policies that mandate pay
secrecy? Consider this question from the perspective of managers, employees and
owners. Is pay secrecy a good practice?

Solution:

Pay secrecy is simply defined as withholding information from the employees regarding the
compensations of all other company’s employees. Therefore, it can be said that pay secrecy
policy is applied when the management, in a systematic and planned manner, withholds from
the employees the information about the distribution of compensations within the company.
Pay secrecy usually includes withholding the information from employees on both the
salaries of other employees in the company, as well as of their incentive payments and other
benefits and perquisites

Advantages
Pay secrecy also has its advantages. It enables the management to exert a higher degree of
control over the organisational processes, and it also causes less conflict. Moreover, pay
secrecy enables managers to differentiate, to a larger extent, the employees showing good
from those displaying bad performances, and this is especially true in collectivist cultures
such as Serbian. Also, pay secrecy decreases the turnover of employees, which is a very
positive effect for a company. Finally, pay secrecy provides the management or company
owners with a more favourable position in negotiations with potential employees regarding
the conditions of their employment. it is clear that pay secrecy is conducive to more efficient
control of both the employees’ individual behaviour and interactions between them, and
through this it also leads to more efficient control of interpersonal processes in the
organisation. Secrecy of compensation distribution decreases or completely eliminates
conflicts inside the organisation.
Pay secrecy enables managers to employ compensation to differentiate the good from the
bad workers in a simpler and extensive manner. If we assume that the management is willing
to reward the best employees though compensation, and especially through incentive
payments, the logical obstacle to this is the negative reaction of all those who did not receive
a reward (or who even received a penalty). Managers can safely and without fear from the
employees’ reaction, reward the desirable behaviour and performance of the best workers. It
has been empirically proven that, in the absence of pay secrecy, managers show tendency to
narrow the salary spread between the best and the worst employees in order to avoid
conflicts.
No company management would implement pay secrecy policy if it did not bring some sort
of advantages to the company and its managers. Consequence of pay secrecy is negative for
the employees, because they are individually denied the opportunities to make optimal
decisions regarding their career choices, it is certainly positive for the company. If pay
secrecy is applied, the employer (owner or manager) can take full liberty to use his/her
negotiating skills to reduce the level of the employee’s compensation to the smallest possible
amount.

Disadvantages
Disadvantages of pay secrecy are numerous. The main negative effect of pay secrecy is the
misconception of compensation distribution in the company, which gives rise to negative
evaluation of distributive justice, decrease in employees’ motivation and job satisfaction,
diminution of the employees’ trust in the organisation and its management, and decline in
loyalty. Also, pay secrecy deprives the management of a very important tool for controlling
and guiding the employees’ behaviour, which in turn become less efficient. Pay secrecy
brings about the feeling of under appreciation and uncertainty in employees. It also
contributes to creating an authoritarian organisational culture and leadership style. Finally,
pay secrecy jeopardises the employees’ capacity to make rational decisions regarding their
job and career choices.
If employees feel that they are underpaid, even if their compensation is high, they will not be
satisfied because the compensation tells them that they are not appreciated, respected, and
recognised enough in their company. If the employees are uncertain of the bonus awarding
criteria in the company, then they will not have clear guidelines on how they are supposed do
their job and they will not know how they are expected to behave. Pay secrecy leads to
confusion and uncertainty regarding the way in which the employees should perform their
tasks. The logical consequence is that the employee starts to distrust the company. In addition
to this, absence of trust is the immediate cause of decrease in one’s loyalty to the company.
The management is then with mediocre employees who are comfortable with the situation in
which no one asks them for their opinions and where they simply follow instructions.
Is pay secrecy a good practice?
Pay secrecy is a very interesting and controversial element of human resources management
in modern companies. Pay secrecy offers advantages and disadvantages to both the
employees and also to the company and its owners and managers. Pay secrecy will be a good
solution when the workforce is highly educated and/or performs complex and creative tasks
by using sophisticated technology, when autocratic culture and leadership style are applied in
organisations, when the degree of the employees’ trust in and loyalty to the company are high
and when there is no history of conflicts between the employees and management, when
there were no recent dismissals and layoffs, etc.
3. Discuss the pros and cons of employee pay being fixed versus variable and dependent
on performance. How might such decisions impact recruiting, motivation and
retention?
Solution:
Pros and cons of employee pay being fixed versus variable and dependent on
performance

 Encouraging Productivity

The primary purpose of performance-based compensation is to reward well-performing

employees and encourage employees to work harder to earn higher pay. Performance-based
compensation gives workers incentives to be more productive, which can ultimately result in
higher sales and higher profit for a company. At the same time, employers don't have to pay
as much for under-performing workers. A fixed payment system may not encourage
employees to work as hard and can result in overcompensating poor performers and under-
compensating top performers.

 Competition between Employees

A potential advantage offering fixed wages instead of variable pay is that a variable pay
system can create unhealthy competition between employees. For example, if sales workers
work on commission, they may be less willing to share work with one another or help each
other make sales. This could result in sub-optimal distribution of work and an atmosphere
that does not encourage collaboration.

 Putting Pressure on Customers

Sales employees commonly receive at least a part of their compensation based on

performance. One of the drawbacks of commissioned sales employees is that they can come
off as overbearing if they push too hard to make sales to earn commissions. Employees with
fixed wages don't need to put pressure on customers to make sales because their
compensation does not depend on sales volume. Customers may feel more at ease working
with non-commissioned sales staff, resulting in a better buying experience.
  Retaining Workers in Lean Times

Workers who receive commissions do well when business is good, but they do poorly when
business is bad. In times of slow business, even top sales people might have difficulty making
enough sales earn a decent living. If a market is slow and commissioned workers can't earn
enough, they may look for other employment opportunities. In lean times, fixed wages can be
more effective at keeping employees from leaving for other opportunities.
Impact fixed versus variable and dependent on performance recruiting, motivation and
retention
 Recruitment

Offering variable pay as part of a remuneration package to attract staff may be done for
offensive or defensive reasons when compared with fixed pay. Taking the latter, if bonuses or
profit sharing is the norm for that sector, occupation or salary level, then employers are
bound to offer the same so that they will not be at a disadvantage. Clearly, if it is not usual in
these circumstances, an organisation offering something more may gain competitive
advantage. The benefit from the employer’s view is that this extra element may, if properly
designed, be funded from extra income. In some circumstances, affordability might drive the
proportion of variable pay in the package and its nature. Many dot com companies could not
afford high wages and so offered shares linked to business performance instead.
If the reasoning behind the variable pay scheme is to emphasise inclusivity –all are part of a
common organisation – then the possibility of extra cash or shares may also have a symbolic
value. It may form part of the employer’s brand, a signal to the market of what the
organisation stands for.
Ex:
Royal Mail’s corporate bonus scheme. The Royal Mail’s ‘share in success’ scheme is, at the
time of writing, set to deliver a bonus of between £800 and £1,000 if the company’s profit
exceeds £400 million in the financial year to end March 2005.
A company spokesperson described the scheme as being ‘part of making Royal Mail a great
place to work and recognising the hard work everyone is doing to turn round the company’.
Critics have complained that though revenue targets may be met, service quality targets have
been missed.
 Retention

Variable pay can put more money into the hands of the best performers when compared with
fixed pay, something that is increasingly important as organisations compete for the most
talented individuals. Highly differentiated performance-related pay schemes can do so by
giving bigger bonuses to the top performers and smaller (or no extra money) to the average or
merely ‘good’ performers. Companies can find a twin benefit in such an approach: the best
get more money and a signal that their contribution is recognised and valued. Channelling the
highest payments towards the best performers in this way helps to retain the most effective
people.
 Motivation
Variable pay plans can motivate employees, which is one of the pros of this type of incentive
as compared to fixed pay. Although some employees aren't motivated by compensation and
benefits, a year-end bonus can prod many workers to a higher level of performance. In this
case, a variable pay plan is akin to dangling a carrot in front of workers who otherwise would
perform just satisfactory work rather than strive for excellent ratings come performance
appraisal time. High performance ratings are a boost for employees, but the challenge is to
sustain employees' job performance levels beyond the season when companies disburse
performance pay.

4. Visit the website http://www.salary.com. Click on “Salary trends” and then prepare a
brief report on the latest developments in compensation practice.

Solution:

The latest developments in compensation practices are:

1. HR’s role in the organization will change

In 2018, HR and compensation professionals will need to reconsider how their roles and
responsibilities fit into the overall employee experience. Self-service and augmented-service
offerings in HR will become the new normal, and best-in-class organizations will begin to
goal their HR leaders on employee service and satisfaction metrics.

2. HR will prioritize employee experience to drive engagement

Focusing on the complete employee experience, rather than considering employee
engagement or corporate culture standalone initiatives, will allow HR to deliver real,
measurable results in 2018. Rather than relying on once-annual engagement surveys, the most
successful HR departments will leverage ongoing employee net promoter score assessments
to track their progress in real time.

3. More stakeholders will influence compensation decisions

As more managers, recruiters, and HR business partners join discussions about compensation,
comp professionals will need to adjust how they plan and budget to account for a new
diversity of inputs. Changes to the compliance landscape, like bans on inquiring about
candidate salary histories during the interview process, will mean that far-reaching and ever-
evolving training programs will be required to keep these organizational stakeholders up-to-
date.

4. Communication and enablement will empower managers to do more

As Mollie Lombardi from Aptitude Research Partners notes, “We ask [managers] to be the
key translation point between business strategy and day-to-day employee activity.” In
compensation, this often means asking managers to do the heavy lifting around
communicating comp strategy to the organization. Successful compensation professionals
will look to close existing gaps in managers’ comp knowledge and their ability to effectively
communicate about pay in 2018.
5. Compensation’s conscience will pay dividends
In 2018, HR and compensation professionals will need to refocus pay equity discussions
around business outcomes to drive action. Pay equity is a critical part of the overall employee
experience, and making pay equity a priority can positively impact an organization’s bottom
line. With research showing that less than half of all organizations currently have a formal
process in place to address pay equity, this work will start with simply putting a process in
place.

6. New jobs will emerge to support the AI economy

In the new AI-powered economy, HR will be challenged to recruit and retain roles that didn’t
even exist a couple of years ago. In 2018, compensation professionals will need to think
carefully about how to competitively price the emerging hot jobs that AI will create.

7. Hot jobs will continue to outpace stagnant annual increases

Annual salary increase budgets have remained flat at 3% for the last several years, and most
compensation professionals are forecasting no change in 2018. But salaries for hot jobs, like
those that will power the AI economy, are growing at a much faster rate as top talent remains
scarce – meaning that HR professionals will be facing a significant recruiting and budgeting
challenge in 2018.

8. HR specialists will replace generalist roles

The best-in-class HR department in 2018 will be focused, analytical, and highly
specialized. With 22% of large organizations looking to decrease future headcount in HR
generalist roles, HR professionals should focus on developing valuable, specialized skillsets
that complement their previous generalist experience in order to grow their careers.

9. Internal development will be key to driving retention and performance

Retaining top talent in 2018 will require organizations to think less linearly about career
progression, and to invest in tools that help map non-traditional career paths. To power this
change, HR and compensation professionals will need to develop smart internal job
architectures that can easily identify jobs with similar required years of experience, skills, and
competencies across job families and functions.

10. Standalone AI won’t have a role in HR – AI will only work if it’s integrated into
workflows
As artificial intelligence becomes more common in HR applications, HR professionals will
need to determine which solutions will have the biggest impact on their business. In 2018,
focusing on AI that’s fully integrated into existing HR workflows will allow HR to capitalize
on their AI investment and easily integrate promising new technology into their daily tasks.
5. Should an organization that operates in different locations in India for different
sectors pay different salaries for identical work? Is cost of living a sufficient
explanation for an employee who senses inequity?

Solution:

Yes, it is necessary for an organisation that operates in different locations in India for
different sectors to pay different salaries for identical work, i.e., provide geographic pay
differentials (or location pay differentials) in their salary scales.
In a company with geographic pay differentials, an employee in an area that has higher
prevailing wage rates for comparable jobs, a higher cost of living and/or is in a work
environment prone to considerable risk will be paid more than peers elsewhere in the
company, all else equal.
Everyone brings unique skills and abilities to a job. And no two jobs are exactly alike.
Variations affect pay for jobs within the same occupation. Often, the more pronounced these
variations are, the bigger the wage difference.
Compensation is the price organizations pay for delivery of jobs or services, which add value
to the organization. Compensation for a specific job is primarily determined by Position
evaluation, Person assessment and Performance review (3P Factors).
An organisation that operates in different locations will have to pay different salaries as it
will have to cater to the following strategic compensation policy concerns:
 The rate of pay within the organization and whether it is to be above, below, or at the
prevailing community rate.
 The ability of the pay program to gain employee acceptance while motivating
employees to perform to the best of their abilities.
 The pay level at which employees may be recruited and the pay differential between
new and more senior employees.
 The intervals at which pay raises are to be granted and the extent to which merit
and/or seniority will influence the raises.
 The pay levels needed to facilitate the achievement of a sound financial position in
relation to the products or services offered.

Cost of living, i.e., local housing & environmental conditions and also inflation could be one
of the factors justifying inequity in an employee’s salary, but not the sole factor. The other
factors affecting the wage mix include:
Internal Factors:
 Compensation strategy of the organisation which is set to lead, lag or match
competitors pay.
 Worth of the job based on the internal wage relationship among job & skill levels.
 Employees relative worth, rewarding employee’s performance
  Employers ability to pay on the basis of the resources & profits of the organisation.

External Factors:
 Conditions of the labour market determined by the economy, government regulations
& policies and the presence of unions.
 Area wage rates which is influenced by the other area employers for comparable jobs.
 Collective bargaining that protects employees purchasing power.
 Other prevalent legal requirements.

Other reasons for varying wages:

Credentials: Workers who have advanced education or hold professional certification or
licensure may earn more than other workers in the same occupation who don't have these
credentials, especially when credentials are sought after by employers. 
Experience and skill: Often, the longer you do a job, the more productive you become. As a
result, experienced workers usually earn more than beginners. Workers who have in-demand
skills also may earn more. 
Industry or employer: Occupational wages vary by industry and employer. Diverse working
conditions, clientele, and training requirements are among the reasons why wages might
differ from one employment setting to the next. 
Job tasks: Jobs for a specific occupation often have similar position descriptions, but
individual tasks may vary. And jobs involving more complex tasks or greater responsibility
may have higher wages than those that don't, even within the same company. 
Success and performance: Some occupations are extremely competitive, and a small number
of workers who are successful in them often have very high earnings. Workers whose pay
depends on their job performance also might have very high wages or very low wages.
Education: One worker may hold a certification or advanced degree that the other doesn't,
and that could justify higher pay.

6. What are the key trends of the Total Reward System in the 21st Century?

Solution:

TREND 1: SENIORITY-CONTRIBUTION
 The traditional reward system is mainly based on seniority or length of service. Jobs
have been defined in terms of tasks. That is, employees have to perform narrowly
defined functions. They need narrowly defined skills.
 This kind of rewards system has come to be viewed as an entitlement and thus is not
capable of truly motivating or reinforcing employee behaviour.
 To compete in today’s marketplace, growing numbers of corporations are seeking
new strategies to improve employee performance and development. The new trend in
 reward systems is based on employees’ contributions, which includes competency and
performance.
 Rewarding for competencies means that pay is strongly influenced by the
competencies required to perform both a role and run a company. Performance is
productivity and accomplishment. Rewarding for performance helps to hold workers
accountable for specific objectives and provides an incentive for exceeding the
objectives. Today, strategic human resource management ideas emphasize the total
contribution to the firm.

rend 2: Simplex–Multiplex
The traditional reward method just paid
money. However, people work for more than just
pay. A pay raise alone does not have sufficient
power to motivate with time. The modern reward
system embraces everything that is valued by
employees in the employment relationship.
Successful companies use a portfolio approach
to reward and do not rely on just one or two meth-
odds. Each method has a distinct purpose and
structure to encourage a set of actions or atti-
tudes. There is no single method that works in the
long run. Successful companies have achieved an
rend 2: Simplex–Multiplex
The traditional reward method just paid
money. However, people work for more than just
pay. A pay raise alone does not have sufficient
power to motivate with time. The modern reward
system embraces everything that is valued by
employees in the employment relationship.
Successful companies use a portfolio approach
to reward and do not rely on just one or two meth-
ods. Each method has a distinct purpose and
structure to encourage a set of actions or atti-
tides. There is no single method that works in the
long run. Successful companies have achieved an
rend 2: Simplex–Multiplex
The traditional reward method just paid
money. However, people work for more than just
pay. A pay raise alone does not have sufficient
power to motivate with time. The modern reward
system embraces everything that is valued by
employees in the employment relationship.
Successful companies use a portfolio approach
to reward and do not rely on just one or two meth-
odds. Each method has a distinct purpose and
structure to encourage a set of actions or attic-
tides. There is no single method that works in the
long run. Successful companies have achieved an
rend 2: Simplex–Multiplex
The traditional reward method just paid
money. However, people work for more than just
pay. A pay raise alone does not have sufficient
power to motivate with time. The modern reward
system embraces everything that is valued by
employees in the employment relationship.
Successful companies use a portfolio approach
to reward and do not rely on just one or two meth-
odds. Each method has a distinct purpose and
structure to encourage a set of actions or attic-
tides. There is no single method that works in the
long run. Successful companies have achieved an
TREND 2: SIMPLEX MULTIPLEX
 The traditional reward method just paid money. However, people work for more than
just pay. A pay raise alone does not have sufficient power to motivate with time.
 The modern reward system embraces everything that is valued by employees in the
employment relationship. The total reward system is defined here to include base
salary, variable pay, direct compensation, perquisites, benefits, performance
management, training, career development, coaching and other employee-related
policies. Combinations of variable pay, recognition and celebration and benefits are
essential to provide a total reward package.
 The concept of the contemporary reward system is composed of four components:
total pay, attractive variable pay, benefits and recognition and celebration.
a) Individual growth: providing the training for workers to grow and learn during
their whole career.
b) Positive workplace: branding your organization so that people are excited about
coming to work.
c) Compelling future: making your company uniquely attractive to the people you
need.
d) Different reward methods are likely to have different effects on organizational
outcomes.
 Adopting appropriate methods will enable employers to deliver attractive and relevant
rewards at a sustainable cost and help ensure that employees perceive they are
receiving appropriate value from the company in exchange.

TREND 3: EXTRINSIC INTRINSIC

 In the mid-1950s, the total-reward system was a concept on the far horizon, but it now
forms the basis of the company mission for the 21st century.
 Nowadays, the function of the total-reward system has both extrinsic and intrinsic
value because of the various reward methods.
 A traditional rewards system most likely applies financial payment and emphasizes
the extrinsic function. However, the new trend of the total reward system has
gradually turned to an intrinsic focus on incentive and motivation.
 Reward practices play an important role in motivating employees to perform. An
effective rewards system helps guide and inspire the workforce and provide a specific
motivating direction. It can also play a major role in stimulating future performance.
Organizations and managers consistently acknowledge rewards and recognition as an
important element in motivating individual employees.
 An effective reward system is not only a reward but also incentive and motivation.
Therefore, we can conclude that the trend of the total-reward system, in function, has
reached beyond extrinsic to intrinsic factors.

TREND 4: PERIODIC INSTANTANEOUS

 Most of the traditional reward takes place at the end of the year or twice a year.
However, these days, rewards occur instantaneously because of the continuously
changing environment and various reward methods.
 A reward system is most effective when employees can see how they contribute to
bottom-line results and how their contributions will be recognized and rewarded
immediately. A long-deferred reward loses most of its power. Instead of the
traditional reward being a fixed amount each month or year, a growing proportion
should become contingent on performance.
 The total-reward system that offers frequent opportunities for awards, such as
weekly, monthly or quarterly, creates frequent opportunities to talk with
employees about their performance and celebrate their results. Employees can see
more immediately how their efforts influence results.

TREND 5: UNITARY DIFFERENTIAL

 Traditional reward systems have only one kind of program that is applied to all
employees in the organization. In other words, the practice object of the reward
system is unitary.
 However, in today’s competitive environment, many organizations are beginning
to appropriately view employee rewards as an important investment rather than
one of their largest expenses. Organizations clearly understand that they must
attract, reward and retain different kinds of employees. They must also balance the
need for different talent with their company’s need to remain competitiveness.
 Every institution is unique, and one approach to rewarding and motivating
employees does not fit all organizations. In certain situations, alternatives will
prove to be in a company’s best interests, and in other scenarios, they could be a
poor choice. Also, each employee has different characteristic, needs and abilities
that can best be met with different types of rewards.
 It is important to try to customize the options to suit the personality and interests
of each performer to make the rewards more meaningful. Organizations should
give employees several options from which to choose to ensure the reward is
valued.

TREND 6: INDEPENDENT COORDINATE

 In the past, reward systems had no strong link with organizational goals and
conditions.
 In the increasing competitive marketplace, dramatically different views have
developed about the nature of human resource management.
 Revisiting total reward programs and assessing the effectiveness of the total-
reward strategy and structure in meeting business needs is critical. The total-
reward strategy should ensure that the reward framework matches the strategic
needs of the business and that the mechanics of the total reward structure reinforce
the desired corporate culture and management style.
 It is important for any manager who is reviewing the organization’s current
reward system to consider the key results and behaviours first so that the
organization needs to be successful. A through rethinking and restructuring of
reward and recognition practices that are aligned with new organizational goals
and culture will give companies the focused energy they need to succeed in
challenging times.
 Therefore, organizational needs and strategies should be included in designing and
implementing the reward system.