Question:
Describe about the importance of the reward management system of Union Bank and Trust company?
Union Bank and Trust Company is a best service providing company in banking sector and investment services. This company has a well-developed business strategy including the consideration marketing community, developing new services, teller referrals etc. The reward management system of the company is also very well developed but there are still chances of improvement. For improving reward management system of the organization, training should be provided as the reward.
This report basically describes the importance of the reward management system of any organization. The report is a case study on the Union Bank and Trust company. It tells how a reward management program works in an organization and this affects the growth of an organization. The reward management system describes about what actually reward is and what are the issues associated in implementation of any reward management system programme. The overview of the Union Bank and Trust company is described in the report with the business strategy of the organization. The reward management strategy of the organization helps in understanding how reward management system of the organization is a vital factor for growth of the organization. The suitable model of the reward management system is drawn which may help in improving the reward management system of the organization.
Sometimes reward is also known as remuneration. The reward can be said as the benefits from the tangible services and returns paid to the employees. The reward basically is paid to an employee for its good performance in an organization which motivates the employees to work for company more enthusiastically (Thorpe, 2000). This also helps the employees to become more dedicated towards their work for the employees. The reward system in an organization works in two ways. One is that it motivates the best performers in the organization to work with more dedication and other employees get motivated for improving their performance in the organization. This creates a healthy competition between the employees to perform best in the organization.
The reward system is basically of two types, extrinsic and intrinsic. Extrinsic reward system basically indicates the transactional or tangible reward and intrinsic reward system indicate the reward from employment and work. The examples of extrinsic reward system are salary, benefits and incentives pay while the intrinsic reward includes better environment to employee for work.
Mainly three reasons are associated with reward management: to motivate, secure and retain people in organization, to realizing the employees that they are really valuable to organization and to reduce the complexity of employment relationship as this is a very critical relationship (Snell, 2010).
As described above, the reward management system is completely related to create enthusiasm among the employees and create a healthy competition among them which helps the organization to complete the tasks properly and effectively. But there are various issues associated with this reward management programme also. The main issue behind this is that, if the reward management programme is not managed properly then it may lead to a harsh competition among the employees which will affect the overall team associated to the project. The other main thing that should be considered is, if a single employee is getting reward every time then the employees may end up thinking that the organization is behaving partially with them.
Sometimes it may happen that the managers can’t predict whether the employees are matching the expectations of the organization or not. This may become a very complex situation which may lead to unfair decision. Thus, the proper execution of reward management system is very necessary for an organization (Shields, 2007).
The Union bank and trust company, established in 1917, provides its services in the banking sector very well. This is a local bank and is situated in Nebraska. The organization is providing its services in personal and business banking, investment, lending, wealth management, retirement services etc. The organization commits that they are full of helpful and warm personalities. The organization works on the three main principles stability, longevity and leadership. The organization aims to provide the broad base financial services to their customers.
The organization believes in providing the excellent customer service, diversification and employee satisfaction.
The business strategy of the organization mainly developed around the personal and business banking as well as the investment services. The business strategy of Union bank and trust company includes community marketing, product building, Teller referrals, pre-approved products and premier services. A large commercial banks have various branches in all over the country. Similarly, Union bank and Trust Company, has various branches and every branch managers are free up to some extent to tailor the local marketing strategies. This leads to serve the community.
The organization provides various efforts to build various types of services which are helpful for the customers as well as the organization which leads to the success of the bank. The organization also reviews the products which are already developed by the bank. This leads to refine the pre-developed services for the customers. Teller referrals actually plays a very important role in the success of any bank. With the referrals teller, the bank can get many new customers. The organization also follows the teller strategy for making the bank successful. The organization provides various types of exclusive services to their special customers. The bank builds various personal services for those customers who are premier customers of the bank. These services are according to the need and requirement of the premier customers.
The reward management system for employees of Union bank depends on the factors like Employees performance, reward basics and internal and external reward factors. Bank employees’ performance is a very important factor to be considered. The Union Bank and Trust Company pays the reward to employees on the basis of their overall performance in the organization. How the performance of employees affect the organization, the organization evaluates this factor by the three dimensional job accomplishment, quality of the job as well as the productivity of the employees. Organization calculates the performance of employee by following formula:
Employee Performance= (Job Quality + Job Accomplishment + 1.5 * Productivity)/4.5
The above formula clearly mentions that the organization considers the productivity of the employees on priority (Rao, 2014). The job accomplishment basically defines how the employees are able to complete the job assigned to them; quality of job actually describes how fine the job is done by the employee and the productivity relates to how innovative the employee is?
All the above factors are based on the percentage, like the percentage of the work completed by the employee, the satisfaction level of manager, team leader or customer and how much productivity employee shows in his work.
The basic reward model of the organization includes the motivation of the employees, creating the enthusiasm among the employees towards the job etc. The company researches various factors and creates various new types of rewards which can effectively be provided to the employees for various achievements in the organization (Perkinson, 2011). These rewards psychologically help the employees in various factors. Employees feel psychological improvement within them towards the work. The employees feel more enthusiasm towards the work, both who get the reward and who don’t get the reward.
The organization also considers the internal and external factors for the reward management system in the organization. The internal factors are those factors which influence directly to the organization. For example. if a marketing manager performs very well in attracting the customers, this will directly increase the number of customers in the bank. External factors are the factors which don’t directly influence the organization e.g. if the employee indirectly become the reason of benefit for the organization.
The organization pays both extrinsic and intrinsic rewards to their employees. The extrinsic reward system includes the incentive, salary hike, other gifts and the intrinsic reward system includes the transferring of the employee on his desirable place and hike in the position. The company also has various reward system for volunteer staff who don’t work for organization on permanent basis but they work on the brokerage. They don’t work on the basis of permanent salary. For these types of brokers, the company decides various levels, according to those levels the company decides the brokerage. This also includes various gifts according to the performance of the broker (Palermo, 2011). The above reward management system is followed by the organization.
As described above, the current reward system of the organization includes various factors and considerations for developing the reward management system of the organization. As we consider the banking sector, the above reward system described by the organization are very much appropriate for the organization. The above reward system has a part of incentives. Incentive is a reward factor which is so organized that the employees don’t stop at any level of performance. An employee gets the incentive as a reward for the amount of work he does which means the employee can earn as much as he wants to by improving his performance (Mitchell, 2012).
Salary hike reward system is appropriate for every type of organization. If the employee will work on the same salary every year then of course s/he will get bored and depressed from his work. It is very necessary to hike the salary of the employees every year according to the performance of employee. This leads to create an enthusiasm towards the work and the employees don’t get bored in the company. The other system described in the reward management system of the organization is the other surprises. These surprises include various gifts from the organization for their employees. These gifts can be a holiday trip for the employees as a reward, or other daily life items. These types of gifts make the employees feel that the employees are very much valuable for the organization. This also makes the employee feel that they are really cared by the organization and the employees start working by having a feeling that the organization is their own and hence, the performance of the employees increases as well (Miranda, 2010).
The intrinsic reward system has its own value in the organization. Every employee needs a fresh environment to work. Every employee has its own choice of environment or working condition. In banking sector, with a lot of rush of work, employees eagerly want their desired place to work. Thus, every employee may get influenced and work with more dedication for getting this type of reward by the organization.
It should be considered that the banks don’t have any right on the brokers as they work according to their own convenience. Thus, for getting more profit from the brokers the reward system is really a very important tool. This motivates the brokers to work more for the organization. According to the organization’s strategy, the organization has made various levels for the brokers in the organization. Every broker wants to reach on the top level. Thus, every broker works enthusiastically to achieve that position (Mcnamara, 2014). The organization also provides various exciting gifts to the brokers of the organization.
Thus, the above described reasons make the reward management system appropriate for the described organization. However, there are still various changes that can be done or various types of new reward systems that can be added in the organization which help the organization to work successfully in this competitive market.
As described above, the current reward system of the organization is very much appropriate for the organization but still there are various chances of improvement in the reward system of the organization. The reward can be provided to the failed employees by various means such that these employees can also get motivated from those rewards. Some organizations expel the employees who do not perform well without even giving them a single chance but this can be handled in other way also. The company should provide special training as reward for the employees who could not perform well in the organization. This will work in various ways so that the employees do not feel that they are not getting ignored for their bad performance. The underperforming employees also feel that they are important for the organization and they work more enthusiastically for the organization.
The suitable model for the employees reward management may be as follows:
Figure: Suitable Reward management model for organization (Prabakaran, 2014)
The above diagram is showing a model for the reward management system for the organization. This model is clearly indicating that by providing the reward to the employees they get motivated from the reward and they start working enthusiastically and the performance of the employees get improved and they start contributing more effectively towards the growth and success of the organization.
The above model clearly describes how the reward management system works in the organization. According to the above model, the described reward systems also required some changes like the organization should study in depth for implementing the above described reward systems like the system of incentive can be made better by making it on the basis of level rather than on the basis of percentage but the benefits should also be enhanced. This is because the employees will get more enjoyment in the job while attaining those levels (Leitchfuss, 2010).
For making the healthy competition, a team contribution and helping factor should also be included on the top priority. The employees then start helping the other employees which will create a better environment in the organization. The diversification of employees will also become beneficial for the organization. The assessment of the employees should be done in the proper way. If this is not implemented fairly, it may lead in grouping in the organization and the employees will no longer have faith in the organization.
The most valuable reward for the underperforming staff is both professional and personal training programme as this will help in enhancing their personal and professional skills. These training programmes may actually help both good performing and underperforming staffs. But these are much important for the underperforming staffs to enhance their level of performance. Rather than expelling the employees enhancing skills is a better option as the employees are very much familiar with the company’s culture and environment and company spends a lot of money for the initial training of the organization and organization needs to provide those training to the new recruited employees also (Kerr, 2008).
The most valuable reward for the good performing employees is position hike or desired place to work as each employee works in a company with a dream to be at a higher position and also the location where the employee is working, matters a lot. These rewards also return the company in multiplication as a skilled and well performing employee may work more efficiently and may deliver more at the higher position and he will have the right ability to share his experience of success with his co-workers which will motivate them in working more for the organisation (Azasu, 2012). If a skilled, hardworking and smart employee is on the higher position, then other workers or employees of the organization also follows that employee.
The reward management system has a great impact on the organization’s business strategy. A business strategy will be successful only if the employees of the organization performs well. Without proper contribution of the employees, the business strategy doesn’t have any meaning. For proper execution of the business, strategic performance of the employees matters a lot, and for improving the performance of the employees reward management system plays a vital role.
The developed strategy is really very much appropriate for the organization’s business strategy. As described in the business strategy of Union bank and Trust Company, community marketing is one of the main factors that organization considers. Community marketing strategy is mainly developed by the branch manager. Our reward program says that the skilled person should be on the higher position. Thus, the skilled employees should be rewarded with the position hike which works in both ways, the company gets a skilled manager as well as the employees are also rewarded.
The other business strategy of the organization includes the teller referral. The teller referral depends on the broker, if the brokers are getting good rewards then of course they will refer the organization to the other people also (Armstrong, 2010).
Our assessment of the employees for reward program includes the productivity on the priority which leads to increase in productive skills among the employees who will are able to suggest new services which can work well both for customers as well as the organization.
Thus, the reward management system of the organization is clearly related to the business strategy of the organization.
Conclusion
The above report is the result of various studies and research. This report basically describes the importance of reward management system for the organization and how reward management system helps in the growth of the organization by the example of the Union bank and Trust Company. Union Bank and Trust Company basically provides its services in personal and business banking as well as in the investment services. Organization has a well-developed reward management system which motivates the employees to work enthusiastically. The reward management system of the organization may be improved by including various new systems and programmes in the reward management system. These systems may help in increasing the faith of employees towards the organization. The suitable reward systems described in the report are completely satisfying the business strategy of the organization. Thus, these reward system programmes may help the organization in growing in this high competitive market.
References
Armstrong Michael (2010). Armstrong’s Handbook of Reward management Practise 3r ed. China: Kogan Page
Azasu, Samuel (2012). A survey of Reward management practises in the Swedish real estate sector 23 (11), pp. 23-25
Gungor, Pinar (2011). The relationship between reward management system and employee performance with the mediating role of motivation: A Quantitative study of global banks [online]. Available From: https://www.sciencedirect.com/science/article/pii/S1877042811015576 [Accessed: 17th February 2015].
Kerr, Steve (2008). Reward Systems 1st ed. London: Harvard University Press
Leichtfuss, Reinhold (2010). Retail Banking Winning Strategy and business Model Revised [online]. Boston Consulting database 22 (1), p.1-16 Available From: https://www.bcgindia.com/documents/file37897.pdf [Accessed: 17th February 2015].
McNamara, Carter (2014). How to Reward Employee Performance [online]. Available From: https://managementhelp.org/employeeperformance/rewarding.htm [Accessed: 17th February 2015]
Miranda, Kay (2010). Five Successful Bank Business Strategies [online]. Available From: smallbusiness.chron.com/five-successful-bank-business-strategies-2628.html [Accessed: 17th February 2015].
Mitchell, Barbara (2012). The Big Book of HR. 3rd ed. London: Career Press.
Palermo, Tommaso (2011). Adopting performance appraisal and Reward System JOCM database 24 (1), pp. 23- 29
Perkinson, Stephen (2011). Introducing the Reward Management System [online] 23(8) p.1- 25 Available From: https://shop.cipd.co.uk/shop/bookshop/media/cms/pdf/bookstorepdfs/reward-management-2nd-edition—a-sample-chapter.pdf [Accessed: 17th February 2015].
Prabakaran, J. (2014). A study on Workers reward management system in banking sector [online] 16 (7), pp. 23-25 Available From: https://iosrjournals.org/iosr-jbm/papers/Vol16-issue7/Version-3/D016732325.pdf [Accessed: 17th February 2015].
Rao, Narayan (2014). Reward System and Organizational behaviour [online]. Available From: https://nraomtr.blogspot.in/2011/12/reward-systems-and-organizational.html [Accessed: 17th February 2015].
Shields, John (2007). Managing Employee Performance and Reward 1st ed. Cambridge: Cambridge University Press
Snell, Scott (2010). Human Resource Management 4th ed. London: Cengage Learning
Thorpe, Ricchar (2000). Strategic Reward System 2nd ed. London: Prentice Hall.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download