Essays on Reward System Strategies Literature review

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The paper 'Reward System Strategies " is a great example of a management literature review. Brown and Purcell (2007, p. 28) define reward management as the processes, policies and strategies that are needed to ensure that peoples values, as well as their contribution in attaining organizational, team and departmental goals, are not only recognized but also rewarded. It further entails the design, maintenance and implementation of organizations design systems with the main aim of satisfying the employees, the organization and the stakeholders. Consequently, reward management is not only about employee benefit, financial rewards and pay but it also entails development opportunities, recognition, increased job responsibilities and learning.

This essay will discuss Cox, Brown and Reilly (2010) argument on the reward strategies and why most reward systems continue to disappoint managers. Cox, Brown and Reilly (2010) argue that organizations continue to be disappointed by their reward strategies. This is because the process of developing a suitable reward system has been challenging for organizations. Additionally, the centrality of the reward systems in association with the employment contract, there is minimal focus on the formulation and implementation of appropriate reward strategies within the organization.

On the other hand, a high percentage of managers has the perception that implementing an appropriate reward system is either challenging or extremely challenging. Brown and Purcell (2007, p. 28) in his report highlighted that the problem lies in external regulatory and environmental changes as well as existing perceived resistance from the line managers. The next session will examine some of the reward strategies that managers have used before discussing some of the challenges experienced by organizations in designing and implementing appropriate reward strategies. Good remuneration is one of the policies that organizations have adopted with the aim of increasing workers’ performance and organizations’ productivity (Hansen, Smith and Hansen, 2002, p.

64). Additionally, with the current global economic trend, most employers have realized the importance of ensuring that workers are motivated through viable reward systems to ensure great performance. Lowry (2006, p. 67) in his study pointed out that skilled workers’ effectiveness can be limited if there is lack of motivation. Other managers make use of performance-related compensation in enhancing employees’ performance and motivation within the organization (Brown and Perkins, 2007, P.

82). Rewards and compensation systems are based on expectancy theory. According to the expectancy theory, employees will be motivated to effectively perform if they believe that there is an existing link between their performances and the way they are rewarded. This is because human beings are rational decision-makers who critically think about their actions and as a result act in a manner that not only satisfies their needs but also assist them in attaining their goals. Cox, Brown and Reilly (2010, p.

250) in his study concluded that compensation system such as profit-sharing results into the great performance as the interests of the employees to those of the organization and team are linked, an aspect that enhances efforts and effective performance. The four mainly applied variable pay schemes include: profit-sharing schemes, group performance-related schemes, employee share – ownership plans and profit-related payments. Employee share ownership plans enable employees to play a role in the company they work for through the stock shares that are awarded to them. On the other hand, profit-sharing plans result in employees being rewarded with a certain percentage of the company’ s profit as a result of contributing to the success of the company.

According to Lowry (2006, p. 67), the rewards can take various forms which include shares or cash or both. However, group performance-related schemes entail rewarding a team or a group of employees in the form of cash for attaining an agreed target. The aforementioned schemes are designed with the purpose of enhancing organizations performance. This is because the employees’ interests are aligned with the company’ s financial performance.


Brown, D., and Perkins, S. (2007). Reward strategy: The reality of making it happen. World at Work Journal, 16(2), 82–93.

Brown, D., and Purcell, J. (2007). Reward management: On the line. Compensation and Benefits Review, 39(3), 28–34.

Corby, S., White, G., and Stanworth, C. (2005). No news is good news? Evaluating new pay systems. Human Resource Management Journal, 15(1), 4–24.

Cox, A, Brown, D, and Reilly, P. (2010). Reward Strategy: Time for a More Realistic Reconceptualization and Reinterpretation? Thunderbird International Business Review Vol. 52, No. 3.

Hansen, F., Smith, M., and Hansen, R. (2002). Rewards and recognition in employee motivation. Compensation & Benefits Review, 34(5), 64–72.

Lewis, P., Saunders, M. N. K., and Thornhill, A. (2004). Family breakdown: Developing an explanatory theory of reward system change. Personnel Review, 33, 174–186.

Lowry, D. (2006). HR managers as ethical decision-makers: Mapping the terrain. Asia Pacific Journal of Human Resources. Retrieved from on November 3, 2012.

Moynihan, D, P. and Wells, S. (2010) Designing Compensation Plans to Manage Today's Risk Environment. Compensation & Benefits Review. Retrieved from on on November 3, 2012.

Purcell, J, Kinnie N, Swart. J et al (2007) people management and performance. Newyork and London: Routledge.

Zingheim, P., & Schuster, J. (2000). Pay people right! Breakthrough reward strategies to create great companies. San Francisco, CA: Jossey-Bass.

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