Financial Rewards

Reward and recognition relates to how Employees are rewarded in accordance with their value to their Organisation and is one of the essential parts of Human Resource Management

Reference to the term ‘financial rewards’ is typically understood to describe all financial means of pay provided by an Employer to an Employee in return for their individual effort and contribution, skills, and work done. Pay is such a fundamental concept in the employment contract that not much time is spent thinking about what it means and in the majority of cases it is relatively straightforward.

The level of pay however is a key aspect of the Employer Employee relationship. The level and distribution of pay can have a significant impact on the efficiency within the Organisation as well as overall levels of morale and productivity within the workforce. It is therefore crucial that Organisations develop pay systems that are appropriate for their needs, which provide value for money but at the same time reward Employees equitably based on the work performed.

Pay systems provide the basis for the organisational financial reward system. Traditionally base or fixed pay systems refer to the payment of a wage or salary amount to an individual on a regular basis in return for work performed. The level of pay does not generally change during the year and payment is not linked to the achievement of a minimum level of productivity.