How a Reward System Enhances Team-Work and Individual Efforts in Organizations

The term reward is used interchangeably with the term compensation. They both mean one and the same thing.

There are basically, four main objective of reward system in an organization; to help understand the various influences on design and implementation of the reward system, helps to show the relationship between motivation and reward, it also differentiates between salary, incentives, commission, profit-sharing and gain-sharing in an organization, and finally, to familiarize with various non-financial rewards while defining reward system.

Reward strategy consists of three components:


  • Organizations reward values
  • Reward management structure
  • Reward management process.


The organizations reward values refers to what the organization stands for.

Whereas reward management structure stand for strategy features to

which is performance based or profit related pay and the administration policies in this regard.

Finally reward management process is basically how strategy can be communicated and the extent to which employees are involved in the design and implementation of the strategy.

Thus the stronger the alignment between the core reward values, structural features and processes, the more effective the reward strategy will be. Whereas inconsistency between what the organization says and does in its reward strategy may lead to employee discontent and grievance. It is therefore necessary to consider the following issues in the process of managing change in relation to reward management.

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