Rewarding System in Regard to Wal Mart - Case Study Example

Rewards systems Student’s Name: Instructor’s Name: Course Code: Date of Submission: Executive Summary This essay will discuss rewarding system in regard to Wal Mart. A reward is something that an employee receives so that he or she can be motivated. The rewarding systems can be financial or non financial. Financial rewards include bonuses, gifts and commissions while non financial gifts include recognition, promotions and empowerment. Wal Mart can apply rewards such as sponsorships, bonuses and promotions. The essay will further discuss circumstances under which reward systems can be applied and they include when there is a poor organizational performance, when there is a need to improve the reputation of the organization and when the organization wants to attract and retain skillful employees. The aim of giving rewards is to motivate the employees so that they can improve their productivity. In order to improve the morale of the employees, the organization should provide free transport, give some loans to employees and provide recreational facilities such as gymnasiums among others. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 Types of reward systems for Wal Mart 4 Reward systems suitable for Wal Mart 6 Reward management systems for paid staff 8 Capacity when an organization can provide various types of rewards to staff 9 Most valuable rewards to the employees 10 Reward management system and business strategy 11 Conclusion 12 Recommendations 13 Introduction Reward management is the process of giving some incentives to employees so that they can be motivated to improve their performance. Rewards help to recognize the efforts of the employees when they have performed well and as a result they can improve their performance. A reward is something given to employees when they have performed well so that they can maintain their performance standards (André de & Paul 2013). Many organizations are opting to rewarding their employees so that they can improve their productivity with the aim of improving the competitive advantage of the organization. There are various reward systems which can be applied by an organization to motivate their employees. This essay aims to discuss rewarding systems which can be applied by an organization to improve its performance. The main objective of rewarding the employees is to motivate them by recognizing their efforts. In this regard, this paper will discuss the reward systems for paid employees at Wal Mart organization. Other concepts of reward management, which will be discussed include the most valuable rewards for the employees of the organization and the link between the organizational strategy and the reward systems applied by the organization. Types of reward systems for Wal Mart There are many reward systems which can be applied by the organization. These rewards can be financial or non-financial reward systems. Wal Mart can decide to select any of these systems. Financial rewards are the rewards which are given in the form of money while non financial rewards are the rewards which are given but not in financial terms rather some incentives. Under financial reward systems, there are many rewards which can be given to employees (Armstrong 2007). To start with, there are the system rewards. These are the rewards which given to the employees as a way of recognizing them with being with the organization. They are offered in terms of wage rates and they help to motivate the employees so that they can improve their motivation. For instance, what the employees receive at the end of each payment period is the system rewards. They can be in the form of wages and salaries. This reward system aims to compensate the employees for their efforts. On the other hand, another financial reward is the individual rewards. These are the financial rewards which are given to individuals for their hard work and the quality of the work they offer. When an employee has improved his or her performance, he will be rewarded individually and not as a group (Armstrong 2007). This can be the company policy to reward individuals for their improved performance. This will motivate other employees to work hard and improve their productivity so that they can also be rewarded hence improve the productivity of the organization. Another financial reward can be growth reward. These are the rewards which are given to employees because of their innovation and their improvement in learning. At some point the employees become innovative and the organization needs to recognize their efforts (Aguinis 2012). This aims at improving the innovation of the employees. In turn, this will help to improve the competitive advantage of the organization because due to innovativeness, the organization will offer unique products and services to the customers which will satisfy the needs of the customers. On the other hand, there are non financial rewards. These are the rewards which are received by the employees, but which are not in monetary terms. It aims to improve the added value of the employees by enabling the employees to increase their efforts. The first non financial reward is the certification. When an employee has performed well, he or she is rewarded a certificate which will help when there are considerations for promotions (Aguinis 2012). There is also promotion. When an employee has performed well, he or she is rewarded with a promotion. This is the most common system of reward which is most commonly applied by organizations including Wal Mart (Richard & Ralph 2001). This is because it is less costly and easily manageable as it does not consume much resources of the organization. In addition, there is the sponsorship of the employees who have performed well. Many organizations are considering this kind of reward because it does not only enable employees to develop their skills, but also helps to improve the performance of the organization (Richard & Ralph 2001). Sponsorships can be in the form of education sponsorships or social amenities provision. The non financial reward system is carried out by conducting financial reward systems and motivational methods. Employee appraisal is done to determine the performance of each employee and the best performing employees will be rewarded (Richard & Ralph 2001). In this regard therefore, the reward management helps to improve the motivation of the employees so that they can help to improve the competitive advantage of the organization. The employees will also develop their skills through reward as they will offer their best skills. For instance, when an employee has performed well, he or she is rewarded by being promoted. This is an incentive to motivate all the employees to work hard so that they will also be promoted. This is an example of a non financial reward. Reward systems suitable for Wal Mart There are many reward systems which could be applied by Wal Mart. The organization can apply both financial and non financial reward systems. The financial reward systems which can be applied by the organization include individual reward system. This is the system which aims at rewarding an individual rather than all the employees (Yigitbasioglu & Velcu 2012). The importance of adopting this system by Wal Mart is that it improves the internal competition. All the employees will try to compete so that they can improve their performance in order to be rewarded. This will help to improve the competitiveness of the organization in the global market. However, there may be some complains as to why some employees are rewarded better than others, but there will be a company policy with clear procedures about rewards and each employee should be aware. This will help to avoid much complains from other employees (Walmart, 2013). Another financial reward system which can be applied by Wal Mart is a growth reward system. This is the system which rewards employees who are innovative most. This will encourage employees to develop better ways of doing things so that the organization will achieve its strategy of cost leadership (Yigitbasioglu & Velcu 2012). Through creativity and innovativeness, the employees will develop better strategies of using the resources of the company, hence lower the cost of operations of the organization. In addition, the organization will also apply the non financial reward systems to improve the morale of its employees. First, there could be sponsorship reward systems. These are the systems which sponsor best performing employees for different programmes. For instance, the organization should develop the education sponsorship programmes so that employees can develop their skills through training and development programmes (Yigitbasioglu & Velcu 2012). This will motivate the employees to work hard and offer quality products and services to the customers leading their satisfaction. Moreover, there will be promotions for best performing employees. The employees who have performed well should be promoted according to the policies of the organization (Monica 2004). Since the strategy of Wal Mart is to remain competitive in the global market by effectively managing the cost of the organization, promotion is the best reward strategy because little financial resources are required unlike financial rewards which might be costly. Finally, another reward system which should be applied by Wal Mart is recognition. This is the reward system whereby the efforts of an employee are recognized through issuing of god performance certificates (Monica 2004). These documents will help when there are opportunities for promotions and this will help to motivate other employees leading to competitive advantage of the organization by improving the quality of services and products offered to customers. For instance, an assistant manager who performs well in his or her operations is recognized during the regular meetings held by the organization. After the recognition, the employee can further be promoted to be a manager when an opportunity arises. This is the most common and effective way of rewarding the employees. The above discussed reward systems can be applied by Wal Mart to motivate its employees. These reward systems are most preferred because they help to cut down the operational costs of the organization, hence leading to cost leadership strategy (Monica 2004). The organization will be able to improve its competitiveness by cutting down the costs of operations as it is the organizational policy of the organization. Reward management systems for paid staff Reward management is the system which ensures that rewards are provided effectively to the employees. It ensures that the system is equitable, sustainable and consistent. The recommended reward management system which can be applied by Wal Mart is the total reward management strategy (Máire & Nick 2002). This is the management system where all the employees are rewarded equally and at the same rate. However, the rate depends on the hierarchy of the organizational structure. All the employees are rewarded when the performance of the organization is good and at the same rate so that there are no complains from other employees. There are two main reward management systems which can be applied by Wal Mart to reward its employees. The first reward management system is the extrinsic management system. This is the system which focuses on the performance of an employee towards achieving the goals and objectives of the organization. Performance appraisal is done and the performance of each employee is determined and can be rewarded. The aim is to motivate the employee to improve the productivity so that the organization can achieve its goals and objectives (Máire & Nick 2002). These kinds of rewards include both financial and non financial rewards such as bonuses, promotions, increase in salary and gifts. This management system can be applied to reward the employees equitably without any discrimination when rewarding the best performing employees. The systems are also sustainable and can be applied consistently (Walmart, 2013). On the other, another reward management system which can be applied by Wal Mart to motivate the employees is an intrinsic reward management system (Fonvielle & Carr 2001). This is the kind of reward management system which aims to improve the satisfaction of the employees. Intrinsic reward management system helps the employees to feel better in the organization by providing incentives which promote their wellbeing at their workplaces. It enables the employees to feel stress free and as a result, they will improve their productivity and that of the organization as a whole. The examples of rewards which are issued under this management system include recognition, trust relationship and empowerment. These management systems will help to improve the performance of the paid employees as they will feel part of the organization hence offer their best skills. For instance, if a supervisor has performed well in his or her section, he or she should be empowered to make some minor decisions on behalf of the management. This will encourage the supervisor to even work harder to prove that he deserved the recognition. This will improve the performance of the organization (Walmart, 2013). Capacity when an organization can provide various types of rewards to staff Despite providing rewards to the employees being an initiative to motivate the employees, rewards should be provided to some capacity. The first capacity to provide rewards to the staff of the organization is when the morale of the employees is going down (Faupel 2012). The absenteeism of the employees and performance of an organization in the global market can indicate the morale of the employees. The management of the organization can decide to increase the morale of the employees by offering various rewards to improve their morale. Therefore, rewards can be provided to improve the employee motivation. Another capacity with which Wal Mart can provide rewards is when the performance of an organization has improved and there is some profit to share. For instance, if at the end of the financial year the management finds out that they have improved their performance they can provide bonuses to the employees as an appreciation of their efforts (Faupel 2012). This will motivate the employees to offer their best skills so that they can improve the performance of the organization and they will be rewarded as well. Therefore, rewards can be provided when an organization has improved its performance. The organization can also provide rewards when there is a need to improve the reputation of the organization. If the organization is able to provide rewards appropriately, it will be able to attract and retain competent human resource skills from the labor market (Daniels et al 2004). It will also help to retain the existing employees as they will be satisfied with their jobs. Examples of rewards which can be provided include sponsorships, recognition and empowerment. This will help to improve the wellbeing of the employees in the organization and will help to improve the reputation of the organization. Rewards can also be provided when there is need to develop the skills of the employees. As we have seen previously, rewards are not only financial resources but also non financial resources. The employees can be rewarded with incentives which can enable them to improve their management skills. For instance, the best performing employees can be assigned some management roles so that they can learn to make management decisions (Daniels et al 2004). This will not only aim to improve the performance of Wal Mart but also develop the skills of the employees hence will help to improve the productivity of the organization leading to competitive advantage in the market. Wal Mart can further provide rewards according to the policies of the organization. If the policy of the organization is to provide rewards at the end of each financial year, then there has to be systems in place which will help to identify the performance of each employee so that there could be effective rewarding of the employees (Axson 2010). The policy of the organization is to practice cost leadership strategy. This is the strategy which aims at reducing the operational costs and can only be achieved if the employees are motivated. Therefore, the employees can be motivated by rewards according to the policies of the organization so as to improve the competitiveness of the organization through employees. For instance, when the performance of an organization has gone down tremendously, there is a need to motivate the employees by giving rewards so that they can improve their productivity. By motivating the employees, they will be likely to improve their productivity, which will in turn improve the productivity of the organization as a whole (Walmart, 2013). Most valuable rewards to the employees Considering the above concepts of reward management the most valuable rewards that could be applied by Wal Mart include both financial and non financial rewards. The financial rewards include bonuses. When the organization has performed well at the end of each financial year, the employees should be rewarded just to appreciate their efforts (Axson 2010). This will help to improve the morale of the employees so that in the next financial year they will offer their skills to ensure the organization maintains its performance standards so that they can be rewarded again if they improve the competitiveness of their organization. Another most valuable reward that can be applied by the organization is performance related rewards. The company should be able to reward the employees individually if they have performed well. If there is a department or a team in the organization which performed well is rewarded as a group and not as an organization (Bacal 1999). This will help to improve internal competition among various teams and this will benefit both the organization and the employees through rewards. Promotions are also most valuable rewards for the organization. The best performing employees for some time should be rewarded through promotions. This will help to motivate all the employees of the organization so that they can improve the performance of the organization in turn (Bacal 1999). Promotions will also minimize the operating costs of the organization since it involves less training requirement, unlike when organization does outsourcing. This is one way through which Wal Mart could achieve its cost leadership strategy. Finally, another most valuable reward which should be applied by Wal Mart is sponsorships programmes which will help to improve the skills of the employees through training and development (Benedict 2003). This is one way which will equip employees with the skills to accomplish their tasks maximizing the resources of the organization. This will help to maximize the output and minimize the output. Reward management system and business strategy Reward management is the process of developing a rewarding strategy which is not discriminative and can compensate all the employees effectively. The recommended reward strategy in Wal Mart is the total rewards management strategy. This is the strategy which ensures that all the employees are rewarded equitably according to their ranks in the organization (Benedict 2003). Total reward strategy can help to improve the performance of the organization since it rewards the employees equitably without any discrimination, hence it helps to eliminate any vices such as conflicts among the employees. Since the strategy of the Wal Mart is to remain competitive by considering the cost leadership strategy, total reward strategy helps to motivate the employees to improve their performance (Chenhall 2005). When the employees are motivated, they can be able to increase theory productivity, which helps to attract and retain customers increasing the market share of Wal Mart. In addition, through motivation of the employees they will offer their best skills and be innovative and this helps to develop better ways of performing their tasks which will be cost effective enabling the organization to achieve its cost leadership strategy. Rewarding helps the organization achieve its strategic goals by ensuring that the employees are motivated. Through motivation, the employees will be able to improve their productivity which will in turn enable them to offer products and services which will satisfy the needs of the customers (Cokins 2009). In addition, motivation will help to increase the sales of the organization leading to increased market share, thus the organization will be able to achieve its strategic goal of being the market leader. Further, through rewards, the employees will be motivated hence they will utilize the resources of the organization effectively leading to competitive advantage through cost leadership strategy. Conclusion Any organization which wants to improve its competitiveness in the global market should be able to motivate its employees. One way to motivate the employees is through rewarding them. A reward is something which an employee receives in appreciation of his or her efforts. Rewards can be financial or non financial rewards. Financial rewards include bonuses and financial gifts while non financial rewards are not monetary and they include promotions, recognition and sponsorships. At Wal Mart, the most suitable rewards systems include promotions, bonuses and sponsorships. Rewards are provided by an organization when there is need to improve productivity of the employees, improve the reputation of the organization, attract and retain best human resources skills and reduce the cost of organizational operations. Through rewards, the employees are motivated and can be innovative to develop alternative ways of accomplishing their tasks, hence the organization can be able to achieve its cost leadership strategy. Recommendations In order to improve the morale of the employees at Wal Mart, they should be given some financial loans so that they can improve their social wellbeing. The employees will pay these loans in installments. Further, the organization should provide free transport. The employees should enjoy free transport by the organization so that they can be at work on time. This will help to cut down the expenses of the employees which lead to motivation. Finally, the organization should provide recreational facilities such as the gym where the employees can meet and socialize during their free time. This will help the employees to interact and share ideas which will improve their morale. References André de, W & Paul, J 2013, The bonus as hygiene factor: the role of reward systems in the high performance organization Evidence-based HRM: A Global Forum for Empirical Scholarship, Vol. 1, No. 1, pp. 16-40. Armstrong, M 2007, Employee reward management and practice, Great Britain, Bell & Bain. Aguinis, H 2012, Performance Management, 3rd edn, London, Prentice Hall. Axson, D 2010, Best Practices in Planning and Performance Management: Radically Rethinking Management for a Volatile World, 3rd edn., New York, Wiley. 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