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Reward Management: Process & Types

Instructor: Brianna Whiting

Brianna has a masters of education in educational leadership, a DBA business management, and a BS in animal science.

Have you ever received a bonus or pay raise at your place of employment? If so, you have experienced reward management first-hand. In this lesson, we will learn about reward management with special attention given to the process and types.

A First Look at Rewards Management

Meet Matt! Matt is a manager for a large corporation. Matt loves so much about his job. He loves his hours, his pay, his duties, and his responsibilities. However, one thing he does not love is the high turnover rate of employees. It seems like each month an employee is leaving and a new one is hired to fill the vacancy. This high turnover rate disrupts the environment of the workplace because the employees never get a chance to bond and come together as a team. With so many changing faces, it has been hard to build a strong working relationship between management and employees. It has since become Matt's goal to change this reoccurring problem and find a way to retain employees and motivate them to do quality work. Matt decided the place to start was by utilizing reward management so that employees feel wanted and needed and are rewarded for their hard work.

Reward Management Defined

Let's take a minute to define reward management. Reward management is the term used to reward employees based on how valuable they are to the company. It is a system that helps ensure that rewards are fair and consistent among all employees according to the work they contribute. The goal of reward management is to motivate employees so that employers can retain them in hopes of meeting the objectives and goals of the company. The objective is to find a way to do so in a manner that not only fits within the budget of the company, but that also abides by any legal regulations. So, in basic terms, rewards management is the concept of providing an incentive so that the employees want to do their best work and stay with the company.

The Process

So what is the process of rewards management? How does it work? Well, each company can develop their own means of rewarding employees, but a basic process goes as follows. First, you need to find and hire employees that are qualified to meet the goals and objectives of the company. After all, if you do not start with quality employees, it may be difficult to motivate them to do anything.

Second, you need to observe their work. Are they meeting their requirements? Are they performing outstanding work? Do they need more training or motivation to complete their work more efficiently?

Next comes motivation. This is the step when you decide how to motivate your employees. Keep in mind that the needs of your employees are an important factor to consider when deciding what type of reward system will work best to motivate. We will learn more about the types of rewards in a later section.

Lastly, analyze the process. After the reward has been distributed, you will be able to see how it affects future performance. Did the chosen method of motivation work? Have the employees continued to produce quality work? Do you need to change the motivation? Is the work of the employees keeping in line with the goals and objectives of the company?

Types of Reward Management

Let's take a moment to look at the different types of rewards management. There are two major categories into which all rewards fall, intrinsic and extrinsic.

Intrinsic rewards center around increasing self-esteem and self-satisfaction.

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