Non-financial segments of total reward that managers may face challenges in implementing
Order Instructions:
Identify three nonfinancial segments of total reward and discuss how each could be implemented, especially across cultures or within a local multicultural labour pool.
What challenges might managers face in implementing such segments?
SAMPLE ANSWER
Non-financial segments of total reward
HR.W5.DISC
Introduction
Gaining a competitive edge in the markets requires organizations to have competent employees. Retaining these employees require these organizations to develop appropriate reward systems. Providing intrinsic and extrinsic rewards as part of the total reward motivate employees, and even increase their productivity. Providing nonfinancial rewards has also been proven to motivate employees and improve their level of performance. The paper identifies three non-financial segments, discusses their implementation across cultures or local multicultural labour, and deliberates on potential challenges that managers may face implementing these segments.
Non-financial reward
Apart from financial rewards such as salaries, and bonuses, employees as well require non-financial rewards for them to execute their duties well. Nature of these rewards may vary from one organization to another depending on the size and the organizational culture (Phoenix 2006, p. 3). For instance, form of recognitions that employee appreciates depend on the organizational culture. The three major forms of non-financial segments of total reward include promotion/nomination, gifts/vouchers, and lastly appraisal.
Implementation of these rewards across cultures
It is important to consider cultural backgrounds and orientation of employees when providing them with non-financial rewards. This is because; they have different orientation and socialization that play a critical role in their motivation. Appraisal is one of the non-financial rewards employees require to be motivated to remain committed to the organization (Kristiani, Sumarwan, Yuliati & Saefuddin 2014 p. 113). This form of reward is through simple personal acknowledgement by the management, appreciating and recognizing the exemplary performance of employees. This reward system requires implementation across the organization. The management should remain conscious about the input of their employees by always thanking them and encouraging them whenever they perform well. Employees feel loved and cherished when recognized and appreciated. It is however, important to be aware of conflicts ensuing, especially when a single individual is appraised continuously. This may as well lead to unhealthy internal competition. When implementing this reward system, is import to factor the aspect of culture. Employees come from varied cultures and the meaning ascribed to this form of reward may vary (Michael 2004, p. 2). Some may require closer attention and appreciation when they make a smaller progress while other may not want so.
Organizations can also give employees gifts and vouchers to attend shows, holidays and go shopping as a strategy to appreciate their efforts (Chiang & Birtch 2012, p. 538). Implementing this form of reward requires managers to identify cultures of employees to give gifts that rhyme with their beliefs, and value system. For instance, when employees excel, it is important to give them gifts that resonate with their value and belief system.
Organizations as well use promotions/nominations to motivate their employees apart from appraisal and gifts. Implementation of promotion is also a sensitive issue especially, in an organization with multicultural labour force or in an entity with employees from diverse cultural background. The strategy when implementing this is to ensure fairness by ensuring that employees from various cultures are put into consideration. An approach to promotion will also vary across cultures. For instance in Japanese culture, promotion is based on the length of stay in an organization as opposed to western cultures where an individual is promoted based on their level of performance.
Potential challenges in implementation
Managers when implementing these reward segments experience a number of challenges. One is defining the value of the scheme as it becomes difficult for the manager to include all staffs because they cannot maintain close watch on all these staffs especially, in multinational corporations. Hence, good performing employees maybe ignored. Ensuring fairness, transparency, and credibility in the process of offering these rewards may be a challenge. Another challenge is cultural fit, as it becomes challenging for managers to align rewards with cultures, values or belief systems of employees (Michael, 2004). This causes conflicts and affects performance of employees.
Conclusion
It is evident that indeed non-financial segments such as promotions, gifts, and appraisals can be adopted by organizations to motivate employees. Organizations however, need to remain conscious about cultural diversities of employees when providing these rewards. There are as well challenges that managers must deal with to ensure smooth implementation of these rewards
Reference list
Chiang, F, & Birtch, T 2012, ‘The Performance Implications of Financial and Non-Financial Rewards: An Asian Nordic Comparison’, Journal Of Management Studies, 49, 3, pp. 538- 570, Business Source Complete, EBSCOhost, viewed 9 September 2015.
Kristiani, E, Sumarwan, U, Yuliati, L, & Saefuddin, A 2014, ‘The Role of Relational Reward Benefits for Developing the Non-Financial Value of a Customer to an Organization: Structural Equation Modeling Approach’, Gadjah Mada International Journal Of Business, 16, 2, pp. 111-142, Business Source Complete, EBSCOhost, viewed 9 September 2015.
Michael S 2004, ‘Non-financial reward: the most effective recognition?’. Available at: http://www.employment-studies.co.uk/pdflibrary/mp4.pdf [Accessed on: 9/9/2015]
People Management (2004), ‘Reducing features’, People Management Magazine, 15 july.
Phoenix, T 2006, ‘Rewards Transformation: Understanding the Internal Total Rewards Marketplace. (cover story)’, Benefits & Compensation Digest, 43, 9, pp. 1-14, Business Source Complete, EBSCOhost, viewed 9 September 2015.
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