Sunday, December 29, 2019
Reward Management Free Essay Example, 2000 words
Significant Rewards for Significant Motivation Jack Welch, the most well known and outspoken CEO of GE wrote very clearly about differentiation and rewarding employees when he said: Ã¢â¬Å"When people differentiation is real, the top 20 percent of employees are showered with bonuses, stock options, praise, love, training, and a variety of rewards to their pocketbooks and souls. There can be no mistaking the stars at a company that differentiates. They are the best and are treated that wayÃ¢â¬ (Welch, 2005, Pg. 41). A bonus is a lump sum payment which is significant enough for an employee to motivate him/her. Clearly a hundred dollar bonus would do little to motivate an employee who makes $100,000 per annum but a $20,000 bonus would be certainly useful. None of the sources given declare the exact amount of bonuses per salary bracket at GE but Grote (2002) says that the useable figures for realistic and motivating bonuses are between 9-12% of the personÃ¢â¬â¢s yearly income. This is a significant amount and we should use this value as a guide for making our rewards at the end of a quarter for those employees who show their commitment to the company and its values. By making our company values the primary method of judging employees performance we can directly link our mission statement of being profitable to how our employees perform. We will write a custom essay sample on Reward Management or any topic specifically for you Only $17.96 $11.86/pageorder now In terms of links to the mission of the company to the reward system, Welch (2005, Pg. 16) says that Ã¢â¬Å"Every decision or initiative was linked to the mission. We publicly rewarded people who drove the mission and let go of people who couldnÃ¢â¬â¢t deal with it for whatever reason. Ã¢â¬ GEÃ¢â¬â¢s own mission when Jack Welch was running the company was to be the most competitive company in the world which fits with the two pronged approach of rewarding and doing the utmost to keep the best talent within the company and letting go of those who do not perform to a certain level. Rewards by Selection The process of establishing who must be rewarded is a rather delicate question and often creates a huge debate for the senior management groups. The method at GE separates all employees into three categories as shown below: Action Taken A B C Employees are Evaluated and placed Top 20% of the company Middle 70% of the employees Bottom 10% of employees Short term strategy Rewarded and awarded Motivated and trained to come to higher standards Warned and motivated Long term strategy Considered for and given leadership positions Moved within the company or within departments to find best fit Removed from service GEÃ¢â¬â¢s policies make it quite clear that all the attention is not given to the top 20% or the bottom 10% of the pile.