The way it rewards employees is an essential foundation for effective employee management. Money is not in any way, form or form the only motivator of the employee. However, very little cash demotivates powerfully. Studies have shown that material reward is much more potent than monetary compensation.
To determine what reward is appropriate, consider the question which employee’s reward level will attract, retain and motivate the employee of the caliber required. If an employee achieves something, which results in a one-time help for the company, a unique reward is usually appropriate.
This type of award should not be established as a lasting option for stable income amendments when, in fact, these changes must be carried out for the constant and regular completion of tasks, excellent execution and essential modifications in the due diligence or Improved evaluation of a state. Remember that the business rewards programs must be established and employees must understand it well for them to know where to stand.
The business reward program should not reflect the impression that these are changes in the underlying salary. It must be established for employees so that they do not expect anything more than what they have to receive. Make it clear that the extra payment is only for an extraordinary achievement and that’s it. In general, the reward program can be a cash reward or a non-monetary marginal benefit. It may even have no real economic value, such as a personal letter of recommendation.
If you have to use a commercial type of employee reward program, award rewards based on the results. An employee can get a fixed amount for specific results. In theory, this gives the employee the best reward for maximising performance. In fact, employees tend to put a ceiling on their profits and, in this line, to their effort. However, the fundamental idea here is that management should only award an employee a reward that is attached to an individual achievement.