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5 Components of Rewards

This document discusses the components of an effective rewards system for employees. It identifies six key components: 1) Wages and salaries, which are the primary motivator for employees; 2) Additional benefits such as health insurance and paid time off; 3) Work life balance policies that provide flexibility; 4) Recognition of good performance to encourage high performance; 5) Career development opportunities like training; and 6) References for further information. The rewards system aims to motivate employees and keep them performing efficiently using both monetary and non-monetary incentives.

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Muhammad Bin Ashraf
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388 views

5 Components of Rewards

This document discusses the components of an effective rewards system for employees. It identifies six key components: 1) Wages and salaries, which are the primary motivator for employees; 2) Additional benefits such as health insurance and paid time off; 3) Work life balance policies that provide flexibility; 4) Recognition of good performance to encourage high performance; 5) Career development opportunities like training; and 6) References for further information. The rewards system aims to motivate employees and keep them performing efficiently using both monetary and non-monetary incentives.

Uploaded by

Muhammad Bin Ashraf
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Contents

Introduction:....................................................................................................................................2

Wages and Salaries:.........................................................................................................................2

Additional benefits:.........................................................................................................................2

Work Life Balance:..........................................................................................................................2

Recognizing Good Performance......................................................................................................2

Career Development........................................................................................................................3

References:......................................................................................................................................3
Components of Reward System
Introduction:
The rewards system is compiled of both monetary and non-monetary benefits which are
offered to employees to keep them motivated and work efficiently to obtain such benefits. These
benefits are classified as follows: compensations, benefits, flexibility, performance recognition
and career development. These are also known as five pillars of reward system. ( What Are the
Components of a Total Rewards System?, n.d.)

Wages and Salaries:


It is the most integral part of reward system and the strongest amongst all pillars. Because
the first thing employees are attracted with is handsome salary. It is up to the organization on
how these payments are made and on what basis. Some organizations have a variable pay
system, others have wages per hour or other than piece rate work. These are the different
strategies applied to keep employees motivated. Furthermore, overtime payment is also paid to
employees which can be a percentage higher than normal pay rate to encourage the employees.

Additional benefits:
These are the benefits that are also known as fringe benefits, and it can be both in
monetary and non-monetary terms depends on each company’s policy. The benefits included in
this pillar are free medical insurance, paid holidays and leaves, monthly allowance on fuel
charges and other transportation charges, educational offers for their children and many more is
covered under these benefits. Most companies give their employees a fixed amount that can be
used on one or combination of benefits offered. (Workforce Management Software News, Blog,
and Resources, n.d.)

Work Life Balance:


The organization also makes sure that employees have ample time for their own personal
routine and hence they devise a plan of schedule of work for each employee according by
providing some flexibility for those employees who have elderly person to take care of or for
people with children. This will not only help to foster the morale of workers, but employees will
also feel that they are being given importance which will boost their morale and work more
effectively.

Recognizing Good Performance


It is also considered a normal practice in any organization that the employees who are
performing well as an individual or as a team are rewarded. This will create a healthy
competitive environment and makes sure no one is slacking and those employees who are
already working hard get recognized for their work done. However, it shall be made sure that
criteria to obtain these rewards are attainable otherwise it will lose its purpose. The rewards can
be in form of bonuses or other form such as free holiday packages. (Team, n.d.)

Career Development
This can be done by improving the skills of your employees and to improve their skills. It
may be required for the company to arrange several training sessions, seminars, get themselves
affiliated with technology and giving further technical assistance to groom themselves. This will
not only increase employee’s loyalty but also their sense of devotion towards the company which
would help the organization to accomplish their objectives.

References:
What Are the Components of a Total Rewards System? (n.d.). Retrieved from HRSoft:
https://hrsoft.com/what-are-the-components-of-a-total-rewards/

Team, R. (n.d.). The Five Components of Total Rewards. Retrieved from Red-Redial.net »
Online Website Reviews: https://www.red-redial.net/five-components-of-total-rewards/

Workforce Management Software News, Blog, and Resources. (n.d.). Retrieved from
Workforce.com: https://workforce.com/news/five-components-of-a-total-reward-strategy

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