Theory Of Reward Management

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Reward management is defined as the combined actions an employer may take to specify at what levels employee reward will be offered, based on what criteria and data, how the offer will be regulated over time, and how both the intended links between organizational goals and values should be understood and acted on by the parties to the employment relationship. (Perkins and White, 2011). Reward Management deals with the strategies, policies and processes required to ensure that the contribution of people to the organization is recognized by both financial and non financial means (Armstrong, 2007). It is about the design, implementation and maintenance of reward systems (reward processes, practices and procedures), which aim to meet the needs…show more content…
Although the pay levels within an organization reflect external competitiveness and internal equity considerations, the decision on the final pay level - the organization’s pay policy will be determined by many factors, including competitive strategy, HR strategy, reward objectives, organizational design and culture (Armstrong and Stephens, 2005). Reward policies provide guidelines for the implementation of reward strategies and the design and management of reward process. Basically, every employer must obey four major policies (Druker and White, 2000): internal alignment, external competitiveness, employee contributions, management of the pay…show more content…
This extrinsic form of commitment derives from instrumental principles that are based on compliance (O’Reilly & Chatman, 1986). Compliance entails behaviors that are initiated and maintained in order to satisfy external constraints, such as obtaining a reward or avoiding a loss (Becker et al., 1996). Because Continuance Commitment derives primarily from external constraints (i.e., rewards and punishments delivered by one self sources), this form of commitment is not self-determined (Gagne´ & Deci, 2005). It is, however, important to note that while the perceived bond underlying employees’ Continuance commitment to the other party is not self-determined (i.e., it exists as a means to other ends), the ends themselves may be intrinsically desirable (e.g., opportunities for personal growth) and valued for reasons other than compliance-based motivations. Meyer and Allen (1997) define continuance commitment as “awareness of the costs associated with leaving the Organization”. It is calculative in nature because of the individual’s perception or weighing of costs and risks associated with leaving the current Organization (Meyer & Allen, 1997). Meyer and Allen (1991) further stated that “employees whose primary link to the Organization is based on continuance commitment remain because
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