Reward

Reward

Rewards are a system whereby something is given, usually financial rewards or employee benefits in recognition of effort, commitment and other reasons for the performance of the employee. Some financial rewards will be bonuses and performance related pay. Financial rewards can be referred to as tangible or extrinsic benefits. However, there are also non-financial rewards such as work life balance and the opportunity to develop skills. These rewards can be referred to as intrinsic or intangible benefits. Mckenna (2000) defines reward system as managers giving something back to employees in order to attract, retain and motivate people in a desired direction. Mckenna also says that rewards are aimed at employees in return for the effort and contribution they make to achievement of organisational objectives.

John Lewis

John Lewis rewards employees in many ways. This is to try and make it a better place to work and to create a better spirit. When I worked in John Lewis for work experience, they rewarded me non-financially by giving me regular feed back on performance; this is a way they give appraisal. This helps make the environment a happier place and therefore, employees can work to the best of their ability. John Lewis also has a policy which is to pay staff according to the market rate for the job they are doing, and that is justified by performance. Added to that is the annual bonus, pension scheme and the discounts. This again makes employees more willing to work which can lead to a better performance as the bonuses will be shared between them. Wood (2011) tells us that in 2011, “Shop workers received a bonus worth more than nine weeks.” So John Lewis’s staff gets both non monetary and monetary rewards.

Fairness a key factor in John Lewis. Ferrell (2012) describes is the attribute of being “equitable and impartial.” There are many advantage of being a co-owner which is that you get to share of the profits and they get a year bonuses every year, but to ensure fairness, it is the same for every partner. John Lewis also has policies to ensure equal opportunities are fair for everyone. This can motivate employees if they all know they have an equal chance of appraisal or promotion. John Lewis differs from other companies for many reasons, firstly it is owned by employees and they receive a share of the profit for bonuses.

Chief Executives

There are many opinions for and against Chief Executives receiving large bonuses if there organisation has underperformed. Some may argue that they should receive large bonuses because it is arguably the most important role in an organisation. This is because they have to make important decisions to influence the direction of the organisation. There job may therefore be one of the most stressful and in order to keep motivated and willing to work, large bonuses maybe required. Their job is more difficult than others. However, since they are the most important role in an organisation and they are the ones making the key decisions, but if bad decisions are made and the company has underperformed, they should not get bonuses in my opinion as the blame is mostly their fault. The fact that they already are on high salaries means bonuses are not necessarily needed for them, so if the company does under perform that year, they should not get bonuses. There are advantages and disadvantages for both.

 Bibliography

McKenna, E.F. (2000) Business Psychology and Organisational Behaviour: A Student's Handbook. 3rd ed. East sussex: Psychology Press Ltd.

O. C. Ferrell, J.F.Fraedrich (2012) Business Ethics: Ethical Decision Making & Cases. 9th ed. Mason, OH: South-western Cengage Learning.

Wood, Z and Kowelle, J. (2011) John Lewis to share nearly £200m in bonuses after successful year [online]. theguardian. Available from: http://www.guardian.co.uk/business/2011/mar/09/john-lewis-staff-share-200m-pound-bonuses [Accessed: 9 March 2011].

http://www.johnlewispartnership.co.uk/resources/faqs/employment.html