Reward

Rewards at Next

Foot & Hook (2008) defines reward as a payment system either as a monetary or non-monetary award, but it also implies something special is being rewarded. Payment systems try to motivate people to work harder and then reward them for their effort.

Reward is closely linked with McGregor’s Theory X management which assumes that the average individual is lazy, avoids responsibility and lacks ambition. Mullins (2010) In order to control individuals of this type, rewards are used to motivate and incentivise staff, therefore making rewards important in creating an efficient workforce to achieve the company’s objectives.

At Next the basic rate of pay for part time sales assistants is based on age, in line with the National Minimum Wage Act 1998 and The Equal Pay Act 1970, therefore making it fair for all of the employees. Mullins (2010) describes equity theory as the focus on people’s feelings of how fairly they have been treated in comparison with the treatment received by others. Legislation and contracts within Next ensure that all permanent employees have the same treatment and benefits based on a scale of responsibility. Foot & Hook (2008) suggests wages are based on an hourly rate of pay, with possible deductions for lateness or absence. A bonus is paid to employees when the company performs above average, and is based on the hours worked during the week of high performance. Another monetary reward as a Next employee is the 25% discount offered to all employees and a uniform allowance based on contracted hours with 75% off. In my opinion the most important non-monetary reward is the flexible working times, as a student it is important the hours work around my education as to earn money whilst studying. Although non-monetary rewards are intangible, it is important to understand I would not have a job at all if I could not fit it around my studies, and because of the flexible working hours I am able to receive both tangible and intangible rewards.

The pay at Next for all of the employees is based on a pay scale; this is based on many different factors including National pay rates, what the organisation can afford to pay and the level of responsibility. The more responsibility you have within Next, the more you are paid, for example my manager’s pay is higher than mine based on her responsibility and experience within the company. This ensures equity and fairness throughout the organisation.

There are many reasons why a company adopts a reward system, “the choice of payment scheme will depend on the wishes of the workforce as well as the culture of the organisation” Foot & Hook (2008) This payment scheme will ensure that qualified staff are employed, retained and motivated. It ensures the organisation is complying with legislation and supporting the corporate strategy. Therefore if the pay scheme is correct for the organisation, it takes them one step closer to success.

Chief Executives usually receive large bonuses from the companies that they run, however if the company underperforms, is it right for them still receive these bonuses?

For:

• ·       The chief executive holds a lot of responsibility makes important decisions for the daily running of the business.
• ·       CEO’s are usually highly qualified and experienced and must be rewarded as a result.
• ·       The underperformance of the organisation may not be down to the Chief Executive; therefore the bonus should be paid to motivate them to improve the situation of the company.

Against:

·       A bonus should be a reward of good performance; therefore if the organisation underperforms a bonus should not be paid.

·       If a bonus is paid even though a company has underperformed, this may lead the Chief Executive to become lazy as they know they will be rewarded and paid their bonus whether the company performs well or not.

·       May be unfair on other employees and cause conflict if bonuses are not given to other members of staff under these circumstances. 

Foot, M & Hook, C. (2008) Introducing human resource management. 5^th ed. Essex: Pearson education limited.

Mullins, LJ. (2010) Management and organisational behaviour. 9^th ed. Essex: Pearson education limited.