Employee Reward and Development Essay Example | Topics and Well Written Essays - 1500 words

Employee Reward and Development - Essay Example (Armstrong, 2004) According to CIPD, the following are the characteristics of a total reward system : 1. Holistic 2. Best fit 3. Integrative 4. Strategic 5. People-centred 6. Customisation 7. Evolutionary 8. Distinctive. The concept of total reward is fairly recent. The traditional â€Å"Salary administration† approach of the 1960s and the 1970s focused on the competitive attributes of the employees rather than as a strategic/ tactical tool. This approach gave way to the â€Å"Reward Management† line of thought wherein the emphasis was on all employees contributing to the success of the organization. This was a more dynamic approach which brought in non-financial rewards in the form of intrinsic and extrinsic motivation, into the ambit of compensation of an employee. The â€Å"New Pay† model (Lawler, 1990) factored in the challenges of a competitive global economy and recommended that employees be paid for the value they bring to the organization. The popular mod els of total reward (Armstrong, 2004) are – Engaged performance model, WorldAtWork, Wyatt model, Towers Perrin model and Armstrong model. Of these, the Towers Perrin model reiterates, almost entirely, the Brown model of total reward. The Brown model (Brown, 2001), depicted above, deals with four elements of compensation – Pay, Benefits, Learning & Development and Work environment. A comprehensive model dealing with both the financial and non-financial components of pay. A good compensation approach to attract, motivate and retain the employee. Addresses the short-term as well as long term needs of employees. Pay component looks at base pay as well as variable pay whereby the employee is assured of a minimum income every month. Performance of the employee as an individual as well as a group is considered. Employee gets a part of profits of the company. This combined with the availability of the shares of the organization brings about a strong sense of ownership. Benefit s which are both individual and family based enables the employee achieve work-life balance. The Pension component assures an independent life style for the individual even after retirement. Learning and Development provides opportunities to develop and grow in the workplace so that the overall productivity is enhanced. Continuous learning takes place and the organization can move toward becoming a Learning organization and develop core competencies and competitive advantages in the market place. Career development helps become aware of the career progress and this helps to plan one’s life in the short term as well as the long term. Succession planning helps bring out the managerial and leadership skills in the individual for mutual benefit of the individual and the organization. Another highlight of this model is the work environment component. Organisational culture and non-financial recognition are highly effective motivation tools. Human dignity is fostered through work-l ife balance. Communication channels, especially grapevine, can be utilized to create a rich organizational climate. From the above, it is clear that Total Reward can be used as a corporate strategy to attract, motivate and retain employees in an organization and derive tremendous advantages over competition in a globalised and highly competitive