Reward

"A reward system consists of financial rewards and employee benefits, which together comprise total remuneration"  Martin, et al, 2010

The two types of reward are financial and non-financial, with businesses using the latter more and more now as an important method of reward strategy. Financial rewards include pay rise, performance related pay, bonuses, overtime and incentives. These are all tangible and extrinsic. Non-financial rewards include recognition, an opportunity to develop skills, career opportunities, work/life balance and flexible working hours. These are all intangible, intrinsic and difficult to value. Reward systems work by an employee undertaking work in exchange for a reward from the employer. It is all the monetary, non-monetary and psycological factors that benefit the employee. Rewards are important to satisfy the employee's 'psycological contract' to ensure that there is fairness in the workplace. The reward system must also support the corporate strategy and maintain equity. One of the main factors of rewarding staff is to motivate them to work harder. This comes into Locke's Goal Theory, where the employee works towards something.

In the organisation I work for, Chelsea Football Club, there are a few reward systems in place. First of all they offer bonuses for attending five matches in a row. This relates to the expectancy theory. It'll make emplyees want to show up to every game and therefore keep attendance up so the company are not short on staff and can perform to full capacity. Another way it offers a reward is by entering staff with a high attendance rate into a draw to win tickets for the Cup Final, which again relates to the expectancy theory. This is done in a fair way by picking names out at random to ensure everyone is treated equally. 

Should Chief Executives receive large bonuses even if the organisation has underperformed?

For:-

• May not be the fault of the chief executive that the organisation has underperformed, it could be due to poor management or staff being unmotivated, and could be missing work. It is not the chief executives job to ensure staff morale is up.
• They have far more responsibility and carry a lot of pressure when making important decisions and deserve the extra pay for this.
• They have worked up the ladded in the organistion throughout their career to be where they are and reap the rewards of all that hard work.

Against:-

• If the organisation does not reach its target then they have failed and should not be paying out more in huge bonuses when they are not deserved.
• It does not show equality to reward the chief executive and no other staff.
• The chief executive could get complacent and just take the reward which they know they'll get no matter how the company performs, and just care about themselves rather than the company.
• it could be the chief executives fault that the business has not performed well and would be completely unjust if he was still rewarded.

In conclusion, companies reward employees to motivate them to work and keep morale up as well as ensuring fairness and equality in the workplace. These rewards can be financial or non-financial.