Reward management and performance related pay Essay

Reward management and performance related pay - Essay Example In today's fast-paced modern world, the job market seems to be getting more and more diverse, wide and inclusive of a great number of potential factors, that could affect the way one sees his job. Human Resources Management is one such area that is gaining importance by the day. Human Resources Managers work towards the fundamental problem of creating a balance between the expectations of both, employers and employees.The job market is getting highly competitive and retaining good talent is becoming an arduous task, owing to the better attractive offers being offered to talented workforces. As they say, grass on the other side of the fence is greener and therefore, employees find themselves being pulled across by alluring competitors. Under such circumstances, the compensation or pay packet goes a long way in determining the loyalties of employees. For instance, if the talented employee in question is unsatisfied with the compensation he receives from his current job, he would obviou sly consider the competitor's job that offers him greater potential and pay.Most employees prefer jobs that offer challenges and on successful dealing and completion of these challenges, would prefer better pay packets. At the end of the day, pay is a huge motivator or factor in diminishing quality of output. Therefore, jobs that offer growth potential, in terms of the hierarchical setup and the pay raise, experience great amount of success in maintaining stability in terms of employee retention and in cementing employer-employee relationships. "..the pay package is one of the most obvious & visible exchanges of the employment relationship; it is the main issue in the exchange between employer & employee, expressing the connection between the labour market, the individual's work & the performance of the employing organisation itself" (Hegewisch, 1991: 28). Therefore, the solution to this problem faced by employers in the process of reducing employee attrition rates and retaining talent, is performance-related payments and issuing rewards for quality output of work! Objectives of Employer and Employee In an organisation, both the employers, as well as, the employees possess varied objectives and expectations from each other, the job and the outcome. The objectives of the employer varies significantly from that of the employee, in formulating and pursuing the mutual contract. Here are the objectives of the employer, when he formulates and enters into a payment contract with his employee: Detainment: Employers look towards retaining the talent they spot in employees, without allowing competitors to take over the same. Therefore, they endeavour to satisfy their talented employees by formulating and putting forth a good payment contract. No one would want to lose a good employee due to under-payment levels. Thus, one of their many objectives is to retain talent and reducing the attrition rates. Steer clear: Employers attempt to steer clear of competitors and emerge victorious in alluring and maintaining some of the most skilful talent, which directly affects the positive quality of work output. Thus, they look to maintain an upper hand amongst competitors, by entering into a decent payment contract with their employees. Intelligent dealings: Employers try to attract the best possible talent within their limitations in providing payment. When they enter into the payment contract, they attempt to make the most in terms of attracting the best