Company offers compensation to its employees in return for the work they perform. There are some who believe that compensation and pay is one and the same thing but the fact is that compensation is much more than the money given by an employer. Compensation practices of any organization has far-reaching consequences on its competitive advantage and rewards play a major role in attracting, motivating and retaining competent employees. Rewards and pay, both are important to both new as well as existing employees.
Reward received is a great motivator for most people. With a job evaluation system, you can ensure that all important deliverables of the job are captured and can be incorporated into a rewards program that is easy to deliver. Reward helps people to satisfy their ego or self-esteem requirements. Organizations need to develop a rewards strategy that is based on the business plan and cycle of the business. A strong movement is seen towards rewards that are tied to performance. Here the bonus is not a part of her or his basic pay but has to be re-earned every year with their performance.
Today most organizations are making considerable changes in their employee rewards program to better fit the dynamic, exceedingly competitive business environment.