Reward Management

Running head: REWARD MANAGEMENT
Reward Management
Name of the student:
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Executive summary
Reward management is required to utilize the various forms of rewards to an effective note. The
study identifies that reward management demands a good understanding of tools to be used for
policy implementation, and to make it useful for the individual and the company. However, the
study finds the effective collaboration between the company’s stakeholders as useful for a policy
program. Nestle, as found in this study, is different from many major international brands in
taking care of a policy program. Nestle does this with technology in SAP, and with the help of
the people who work collaboratively for a project.

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Table of Contents
Introduction......................................................................................................................................3
AC 1.1 Assessing the key perspectives and the environment that inform the reward decisions.....4
Using appropriate analysis tool to identify the internal and external factors..............................4
Internal Factors........................................................................................................................5
External Factors.......................................................................................................................6
Business drivers influencing reward decisions............................................................................7
AC 1.2 Examples of different ways of gathering and presenting reward intelligence................9
2.0 Understanding of key reward principles and the implementation of reward policies and
practices.........................................................................................................................................11
AC 2.1 The principle of total rewards.......................................................................................11
AC 2.2 How should equity, fairness, consistency and transparency relate to reward policies
and practices..............................................................................................................................13
AC 2.3 Explaining ways in which the reward policy initiatives and practices are implemented
in Nestle.....................................................................................................................................13
3.0 An understanding of the role of line managers in making reward decisions...........................16
AC 3.1 Line managers contribute to reward decision-making..................................................16
AC 3.2 Contribution of both extrinsic and intrinsic rewards to improving employee
contribution and sustained organization performance...............................................................17
5. Conclusion.................................................................................................................................19
References......................................................................................................................................20

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Introduction
Reward management is about using strategies, implementing policies and practicing
processes to give value to employees' contribution to attaining the organizational goals and
reward them for their achievement to keep their motivation level high (Malik, Butt and Choi
2015). The definition suggests that the practice is a huge task to be managed regularly by a team
of expert taking care of its different related tasks. In this, some people contribute by identifying
feasible strategies whereas many others take care of designing a process to implement these
strategies. In activities ranging from identifying strategies to implement it, a Company has to and
should invest in designing a rewarding process, identifying the process to follow and
implementing the process with the help of a dedicated team including also the Company’s
leaders (Malik, Butt and Choi 2015). Studies suggest ample of benefits in implementing a
suitable and logical reward system in an organization. In spite of this reward, management is a
debatable topic. This is more due to differing views on whether an intrinsic or extrinsic form of
motivation to be considered in reward management or both. As according to many scholars
intrinsic motivation is much more impactful than an extrinsic in influencing the employees’
performance (Eisenberger, Malone and Presson 2016). Understandably, the team of experts such
as the human resource managers will have to consider whether it is okay to rely solely on
intrinsic factors of motivation or the both in practicing logical and valuable reward management.

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This study also has the purpose to study reward management both in general and in the
context of Nestle. Nestle being a major Multinational Company having an existence in countries
across the globe is bound to have countered with challenges in numerous forms. There may be
some rewards less meaningful to employees. For example, saying “thank you” to an employee on
his or her performance casually or while not in a gathering might not be a matter of joy to the
person. People like to be rewarded in front of others to feel the pride of what they have achieved.
This just an example. Indeed, there can be many such reasons affecting the impact of reward
management. Therefore, this study can be regarded as an important project considering reward
management influences the performance of an employee and so of their employer. Additionally,
the discussion to be held in this study could be beneficial for the Graduates in their professional
career ahead.
AC 1.1 Assessing the key perspectives and the environment that inform the reward
decisions
This section analyses the key perspectives about reward management and the
environment that inform the reward decisions.
Using appropriate analysis tool to identify the internal and external factors
Before discussing the internal and external factors influencing the reward management it
is primarily important to know about the “Total Rewards” system. Total rewards more
specifically fulfill the entire demands of employees, which are feasible to the financial and
management capacity of an organization. Total rewards on a broader aspect have five different

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components. These are compensation, benefits, professional development, recognition and work-
life balance (Guthrie, Massingham and Tam 2015). With the help of these components, the
internal and external factors impacting reward management can be identified. These are (Guthrie,
Massingham and Tam 2015):
Internal Factors
 Employer
Employee turnover or attrition can be a big issue if not kept under control. It is because an
employer has to invest huge money in recruiting and nurturing its people. Additionally, this is
very challenging to find quick replacements for those who have left a Company considering
labor shortage being a global issue (Mone and London 2018). Studies suggest that a motivated
employee is a valuable asset for a Company (Mone and London 2018). These few reasons
suggest that reward management should essentially be a part of Organisational Practices.
 Job Evaluation
Job evaluation is one of the practices of modern organizations. It helps to evaluate the
performance and contribution of employees. To assess the performance there is performance
evaluation in the form of “Performance Appraisal” practiced either annually or half-yearly in
worldwide companies (Omollo and Oloko 2015). There can be many reasons for performance
appraisal into the practice. One of the reasons can be the perceptions of employees, which let
them think of being rewarded for achievement and good performance. They according to Omollo
and Oloko (2015) seek values to be given to their performance, so that, they could fairly
differentiate their importance to a Company from those who are new to this.