Characteristics of an effective reward scheme

By Sumudu Rajaguru

When consider the organization’s development, reward system takes main part of. However, the reward system has to be set up properly and the below explains the characteristics of a good reward system.

Performance Based

Reward has to be based on performance and better performance needs to receive better rewards. Because this supports employee motivation and achieves good results.

Transparent and predictive

Transparent means everyone in the organization should have a clear idea about the reward system. And it has to be distributed transparently. Another important factor is everyone should have a chance to predict the rewards then the real motivation comes to achieve the goals. A transparent reward system also fulfils the self-esteem and?recognition?needs of the employees.

Cost Effective

This is simply like give and take. Rewarding can’t exceed the benefits received by the organization. That means it should adhere to the cost-benefit ratio. After the reward system is in place organization should have the capability to achieve more and employees should have the capability to earn based on their achievements.

Need-Based

The reward system should match the requirements of the employees. Because it has created motivation for employees to achieve more.

Unbiased

Reward has to be unbiased and fair. Everyone should be equally rewarded. If not there can be a lot of conflicts within the employees.

Competitive

The reward system must be competitive with other organization’s provisions. The reward must be revised timely. Reward?management?must be enough to earn a living standard. It should be able to accommodate the lifestyle change. In the absence of competitiveness, employees may leave the organization and join the other organization. A good reward system will attract and retain competent employees.