CHAPTER 2

STRATEGY 1
PERFORMANCE BASED REWARD MANAGEMENT
REWARD MANAGEMENT:
Reward management in a context of performance management is an integrated reward system that insures
equitable avenues to employees for fulfillment of their financial and non financial need and recognition
for their contribution to attainment organizational goal .

Characteristics:

Reward emphasizes not only financial compensation but also non financial reward like
enrichment of job, work autonomy/freedom, company sponsor family tour.
Reward must be offered in proposition in respective employee contribution/services in fulfillment
organizational responsibilities and achievement of organizational goal.
Reward must be integrated implying that there must be balance and comprehensiveness in design
and application of the reward management strategy.
Reward should be capable of delivering dual result i.e. fulfillment of motivational need of
employees and achievement of organizational objective and goal .
Reward should be performance driven and create performance excellence
through
institutionalization of performance management system .

SIGNIFICANCE OF REWARD IN PERFORMANCE MANAGEMENT:

Reward
Reward
Reward
Reward
Reward
Reward
Reward
Reward
Reward
Reward

as
as
as
as
as
as
as
as
as
as

a source of organizational effectiveness.

medium between organization and employees .
avenues of multiple motivation fulfillment .
a factor of motivation.
performance guide.
source of differentiation.
a source of employee involvement.
a source of innovation.
a source of competiveness.
a source of organizational harmony.

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THEORETICAL FOUNDATION OF REWARD BASED PERFORMANCE MANAGEMENT:

Reward theories have practical implication for the architecture of reward based performance mangment
policies a briefly describe. These theories include
1.
2.
3.
4.
5.
6.
7.
8.
9.

Lawler's reward and job satisfaction model

Sweeney,mcfarlin and inderrieden's pay and job satisfaction .
Macnally's three compensation strategy.
Hay guide chart profile method.
Broad banding
External and internal factor that influence reward system.
Individual factor that influence reward system.
Incentive technique.
Behavioral theories of reward.

LESSON OF REWARD THEORIES:

Eight practical lesson that have implication for design and execution of the reward
based performance management strategy are drawn from the following theories .

Reward is more of a psychological phenomena rather that physical.

There is an element of contingency in reward strategy.
Reward is susceptible to force of multiple factor.
Reward is a comprehensive strategy.
Job enrichment is the higher end of reward strategy.
Fairness of reward is dependent upon objective measurement.
Compensation is a multi layered system.
Reward-motivation-reward is cyclical process.

REWARD
BASED
PERFORMANCE
INTERVENTION AND DRIVERS:
INTERVENTION:
MANAGEMENT:

NURTURING

MANAGEMENT

REWARD-BASED

STRATEGIES,
PERFORMANCE

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nurturing reward-based performance management is not only an immensely challenging task, but a task
which has been rarely achieve in practice. An essential objective of this strategy is providing the base
format to design and implement and integrated reward system that is most important and compatible with
internal and external environment of an organization. A set of trend drivers assists in realization of this
intervention. These are

Setting objective of reward strategy.

Track past and present reward system..
Determine and applying reward methodology.
Determine reward components .
Determine components in Monterey reward.
Design of reward system. Consultation and communication on reward based
on performance management.
Implementation of reward based performance.
Evaluation of reward based performance management.
Refinement and reinforcement of reward based performance management

INTERVENTION
2:
CAPTALIZING
ON
REWARD
INSTIUTIONLIZING .OF PERFORMSNCE MANAGMENT:

STRATGEY

IN

the second intervention is committed to the general cause of institutionalizing the policy and practice of
performance management. principal objective of present intervention is capitalizing on matured reward
strategy to institutionalize practice of performance management in the organization. This intervention also
consists of ten drivers which are .
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Reward for institutionalization of performance management.

Reward as fellow up performance excellence .
Reward of centre of performance excellence.
Integrating reward system with measurement management.
Integrating reward with competency management.
Melding with culture strategy.
Leadership is ultimate from of reward .
Career is a form reward.
Reward as a source of employee involvement.
Using process centric reward system institutionalization for of performance management.

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Bibliography
KANDULA, S. R. (2007). PERFORMANCE MANAGEMENT. INDIA: PRENTICE HALL OF
INDIA PRIVATE LIMITED.

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