Experts indicate that having a reward system in place for employees is beneficial despite a recent study that indicates most such systems have low impact on long-term organizational performance, according to Human Resource Executive Online (HREO).
Researchers from the HPO Center found that it was not generally worthwhile for organizations to expend significant time and resources designing and implementing reward systems. Instead of sophisticated solutions, the study revealed that a simple system works well as long as employees consider it fair and equitable.
Appropriate reward systems, expert Marc Stockwell told HREO, must allow employees to work together while highlighting success. As part of the organization's HR management system, it should differentiate compensation as well as address non-financial factors, according to Stockwell.
Communication is a major factor in this aspect of HR management, according to HPO Center academic director Andre de Waal, who notes that effectively communicating the organization's expectations and the reward structure in advance is generally necessary, or else employees may perceive preferential treatment or inconsistent standards. The system should also be careful to evaluate employees using criteria within their control.
