Return of Piecemeal Pay? We Need a Balanced Reward System
Janice Johnson-Lorde, Student (MBA), Trinidad and Tobago, Member
: One must always remember that reward for performance includes other aspects. Leventhat (1991) suggested that management consider a total reward system that outlines WHAT as well as the HOW in order to reward employees for their contribution to achievement of organizational goals.
Some contributions are intangible but valuable to the firm. So a base pay may be good, but contingent pay along with related services as well as non-financial benefits will bring a good balance to a reward system.
Different people are motivated differently and thus it is important for managers to know the workforce and what is required to attract and retain their efforts and loyalty.
Also market rate analysis and job evaluation processes are critical to reward/payment decisions because the value of employees extends beyond the internal value and includes the market price for their talent. Because of this, performance alone cannot determine pay.