7.1 Quality Reward System

The 2 minutes video below provides over-view of quality reward system.

Quality Reward System

It is in every organisation’s interest to achieve its goals, ensure effectiveness, quality of the process and growth. Reward system is set up by an organization to reward performance and motivate employees or individuals or group   levels for   their positive contributions to the growth of the organization.

Why it is a necessity for ensuring and improving quality processes that institution should have a strategic reward system for its employees? The reason is very simple. Each activity reflects certain quality level of employees’ work which the institution, leadership and work environment must recognize and retribute appropriately. As such, recognition and rewarding mechanisms always strengthen institutional quality culture and overall quality processes.

Reward systems are central to the Human Resource Management function. Their purpose is to attract talented individuals, motivate them and retain those that have a better fit with the organization.  In many institutions, performance reviews for human Resource Management include a section on how well they reward and recognize strong performers in their respective departments or divisions. Knowing that they will be measured on how well they have used the available tools for motivating employee results tends to help reluctant managers focus on using the programs.

Reward systems have a direct impact on employees and on institution and is the major link in the exchange process between individual workers and the organization.

Reward systems can also be seen as the procedures, rules and standards associated with allocation of benefits and compensation to employees. Rewards are intended to motivate certain behaviours but for it to be effective, it must be timely and tied to effective performance.

The role of Reward Systems

Reward systems in organizations are used for a variety of reasons such as:

  • increased level of staff performance at work – reward systems serve a very basic motivational function,
  • staff remain more focused on the job,
  • depict more positive staff attitude,
  • effectiveness of teamwork habits,
  • higher level of satisfaction and staff feeling to be more valued,
  • higher engagement levels,
  • loyalty and commitment to their employer for long term,
  • contribute towards institutional growth.

How to prepare efficient Reward System?

The successful employee reward systems include all 4 elements – combing appreciation, recognition, benefits and reward. And institutions should provide a clear, written policy and guidelines, including:

  • Employee eligibility requirements.
  • The approval processes.
  • The types of awards that will be provided.
  • The frequency of award presentations.
  • The performance goals that will be measured.
  • The thresholds for awards.
  • When defining the decision-making process and the levels of approval required to receive an award, authority and responsibility for program administration should be distributed as widely as possible in the institution.

The institution should communicate both the criteria and examples of the types of work behaviours that warrant an award. This communication will help all employees understand how to judge the desired outcomes. It will also ensure timely recognition, which is necessary for the Reward system to be effective.

Key steps to effective reward system:

How do organizations choose the best Reward System for their organization?

Every organisation is unique. To ensure sustainability of organisation Reward System it is crucial to insure strong connection between organisation Reward System and organisation vison, values, strategy and mission.

A motivated employee can be a significant factor in organizational success. When they are motivated to work at higher levels of productivity, the organization as a whole run more efficiently and is more effective at reaching its goals.

Some employees may not be as motivated as others by an institutions’ incentives, so institutions should offer a variety of incentives and recognition opportunities to meet various employee needs. For example, some employees may be motivated more by time off than by money while other employees may find bonus incentives more attractive. Because job types, job levels, work locations and working environments differ, offering a variety of both cash and noncash incentives is usually most effective in making the program meaningful to all participants.

For a recognition program to be effective it should meet several criteria. The program should be well-funded, aligned with organizational goals, appropriate for employees’ achievements and timely. The methods of presenting awards must be managed well, with managers themselves playing key roles. The process for choosing and recognizing employees should be straightforward, and the program should be reviewed and evaluated regularly.

SUFFICIENTLY FUNDED – The key to success for a recognition program is leadership’s commitment of resources. During the budgeting process for the year ahead, the institution should earmark funds for the program and establish methods for distributing the funds to departments, divisions, or subsidiaries. Leadership must dedicate the resources—including the time it takes to plan and execute a program—and must enable employees and supervisors to run the program.

Through this process, department leaders can see that the distribution is fair and equitable, and that the money is allocated and immediately available to fund the program once it is announced to employees.

ALIGNED WITH GOALS AND VALUES – Reward programs are most successful when they are aligned with the institution’s mission, vision, values, and goals. Employees can tell if there is—or is not—a clear connection between what management says is important and what is actually rewarded at work.

APPROPRIATE – Employees must understand the rationale for a reward program and should be convinced that the awards are in line with the achievement and the degree of effort they represent. A recognition system will falter if employees feel that their work is trivialized or even insulted by inconsequential incentives or insincere gestures of appreciation. Awards should be consistent with the employee’s achievement and meaningful to the person receiving it. An employee who completes a two-year project should be rewarded in a more substantial manner than an employee who does a quick favour.

Program participants must believe that the recognition system is just and objective. Thus, all employees who meet the criteria for receiving an award should be included and recognized. And employers must make certain that the awards are in keeping with the institution’s culture; what works in one environment may not work in another.

TIMELY – The reward or recognition should be delivered as close as possible to the time of the desired behaviour to strengthen the link between the employee’s action and the result to the institution.

Although some institutions designate a specific day or week for employee recognition, recognizing employees in real time rather than waiting for a future event is considered the better practice.

ARTFULLY CARRIED OUT – The manner of delivery can make or break a program. The reason for the award—the behaviour that is being reinforced—should be spelled out. Awards should be presented in a sincere and heartfelt.

Further reading (sources):


OECD – Performance-Based Rewards for Teachers: A Literature Review: https://www.oecd.org/education/school/34077553.pdf

Fostering Quality Teaching in Higher Education: Policies and Practices: http://www.oecd.org/education/imhe/QT%20policies%20and%20practices.pdf