This paper studies an example that demonstrates how the company’s rewards system does not align with its goals and objectives. It analyzes the case and discusses the adverse consequences of the company’s compensations policies. The paper suggests the solutions that may help the firm to improve its system of rewards and enhance the level of employees’ satisfaction and working conditions. It proves that ensuring the workers’ commitment is crucial for the company’s performance.
Rewards System Analysis
Ramdhani, Ramdhani, and Ainissyifa (2017) point out that rewards system is a part of corporate culture, which, in its turn, is designed to achieve the organization’s goals. It means that the rewards system can be effective only if it aligns with the company’s objectives. For example, an IT organization offers low salaries for software engineers and does not provide additional compensations, but its goal is to produce high-quality products and offer customer support.
In this case, the employees do not receive awards for their work, which results in a high turnover level. Consequently, the company cannot ensure the continued high-quality level of its services, as the new software engineers need time to acquire the necessary skills. Moreover, they may not be able to sustain the operation of the older products as they may lack knowledge of the tools used in their development. It means that the company’s rewards system is poorly developed and does not contribute to its goals.
The example shows that the company tries to reduce its investment in the working force but does not consider the impact its rewards system has on the engineers. The studies show that the workers are not motivated to make an effort and enhance their performance if they know that it will not lead to reward (Chuang, Jackson, & Jiang, 2016). It is also clear that the company’s corporate culture needs improvement; as if the employees are not satisfied with the working conditions, they are not loyal to their employers and decide to leave the job.
Kim, Song, and Lee (2016) underline that organizational commitment can decrease staff’s turnover intentions, but the firm should develop the strategies for its enhancement. It is impossible for a company to follow its objectives and be effective without the employees’ dedication (Lim, Loo, & Lee, 2017).
Methods of Improvement
To improve the situation, the organization may use different solutions aimed to enhance its rewards system. For example, if the company does not have the budget to increase the employees’ salaries, it should develop an alternative method of compensation. The first step for the firm is to investigate what factors that cause the high turnover rates. Besides the low salary, they may include long working hours, poor relationships between the organization and its employees, an unsafe work environment, and the lack of opportunities for personal growth.
It is crucial for the company’s authorities to have a meeting with the team of engineers to discuss their concerns and suggestions. If the workers are unsatisfied with the working conditions, the firm can allow them to work from home, have a flexible schedule or leave the office earlier. The organization can also provide other benefits, such as training sessions or retirement programs. These measures can improve the firm’s rewards system while supporting its objectives and decrease the level of turnover.
Conclusion
The rewards system is a significant part of corporate culture. The provided example shows how it should align with the company’s objectives to improve its performance. If the employees are unmotivated and unsatisfied with their conditions, it is vital for the organization to enhance their commitment by offering rewards or compensations. Apart from increased salaries, they can include flexible work hours, training sessions, and retirement programs.
References
Chuang, C. H., Jackson, S. E., & Jiang, Y. (2016). Can knowledge-intensive teamwork be managed? Examining the roles of HRM systems, leadership, and tacit knowledge. Journal of Management, 42(2), 524-554.
Kim, J. S., Song, H. J., & Lee, C. K. (2016). Effects of corporate social responsibility and internal marketing on organizational commitment and turnover intentions. International Journal of Hospitality Management, 55, 25-32.
Lim, A. J. P., Loo, J. T. K., & Lee, P. H. (2017). The impact of leadership on turnover intention: The mediating role of organizational commitment and job satisfaction. Journal of Applied Structural Equation Modeling, 1(1), 27-41.
Ramdhani, A., Ramdhani, M. A., & Ainissyifa, H. (2017). Conceptual framework of corporate culture influenced on employees commitment to organization. International Business Management, 11(3), 826-830.