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Reviews the development of the concept of reward management within the context of other apparently innovative approaches to pay and the role of government policy from the 1960s to the 1990s. These are largely seen to have been ineffective and reward management to be another new wine in an old bottle.

The reading and discussion on case will enable participants to appreciate importance of reward management in performance management system for both employee and organizational good; to develop insight on the effect of perceived discrimination on the motivation of employees; to internalize the effect of perceived unjust, subjective, non-communicative, non-transparent policies on the behavior and productivity of employees and overall organizational culture and climate; and to comprehend the importance of HR and OB issues with respect to performance management system for the benefit of employee morale, motivation and organizational culture.

The effectiveness of an employee is the key factor for the employer. All the profit that the company or the organization makes depends on the employees’ productiveness. The case needs to be understood in the overall context of performance management system (Ferreiraa and Otley, 2009) with focus on elements of appraisal and compensation via rewards and recognition as per objective standards. Performance management systems (PMSs) is a more general descriptor if the intention is to capture a holistic picture of the management and control of organizational performance. Performance management policies and practices refer to the processes of setting, communicating and monitoring performance targets and rewarding results with the aim of enhancing organizational effectiveness (Fee, McGrath-Champ and Yang, 2011). PMS includes both the formal mechanisms, processes, systems and networks used by organizations, and also the more subtle, yet important, informal controls that are used (Chenhall, 2003; Malmi and Brown, 2008). Otley (1999) proposed a framework which highlights five central issues which need to be considered as part of the process of developing a coherent structure for performance management systems. The five areas addressed by this framework include identification of the key organizational objectives and the processes and methods involved in assessing the level of achievement under each of these objectives, formulating and implementing strategies and plans, as well as the performance measurement and evaluation processes, process of setting performance targets and the levels at which such targets are set, rewards systems used by organizations and the implications of achieving or failing to achieve performance targets and types of information flows required to provide adequate monitoring of performance. While the case touches upon all the aspects of the PMS framework, it revolves round the reward episode and elaborates on the way it affects all stakeholders, those who got the benefit, those who felt discriminated and those were mere observers to the episode. Objective performance appraisals are needed to ensure that every employee produces the best performance and that the work performed is rewarded with reasonable increases in pay scales or special additional allowances or incentives. This system carries crucial importance as it helps managers to decide which rewards should be handed out, by what amount and to whom. Additionally, performance appraisals may increase an employee’s commitment and satisfaction (Wiese and Buckley, 1998) The case readers need to notice that when organizations fail to follow objective appraisal or reward standards, the same rewards become a cause of contention. The reward which was handed over to the employees in this case was in addition to the annual appraisal. Though the role of rewards has been well-recognized in motivating the employees to continue performing at high level and encourage others to strive for better performance, what needs to be recognized that rewards’ per say does not serve purpose. They need to be dealt within the context of performance management system. Using rewards to favor or discriminate a few employees by using subjective standards backfires and does no good as the person who is favored cannot take pride in it and is not motivated to perform better or equally well as he/she also knows that the work has no relation to the reward, it is personal favor, on the other hand, the one who is discriminated feel discouraged and demotivated to perform. Rewards have the potential to both help and harm the organization if dealt in a callous and careless manner. Use of rewards to favor or discriminate certain people due to subjective preference can be suicidal for the organization and irreparably damage the trust of the employees in the management. It has been well stated that fairness and objectivity are the core principles using an assessment of the nature and size of the job each is employed to carry out (Torrington et al., 2005). If any organization decides to include rewards as a motivating mechanism, it needs to cull out unambiguous and transparent criteria for rewarding. If employees perceive procedural or distributive injustice from the management, it is not only detrimental for the employee’ relations and teamwork, it also tarnishes the reputation of the organization and jeopardizes the culture of the organization. Reward management needs to be closely related to performance appraisals, job evaluations and overall performance management systems. The current case elaborates on one such instance where unjustified inequity in reward system not only disturbed the employees concerned but it had bred a negative image of the organization among other employees too, organizational citizenship was replaced with contempt and feeling of apathy.

Post graduate students and working professionals can benefit from this study.

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Human resource management.

While the business process management (BPM) literature highlights the significance of aligning employee appraisals and rewards practices with business processes, little is known about the realization. The purpose of this paper is to concretize the impact of process-oriented appraisals and rewards on business process performance and to provide empirical evidence on how organizations actually align their appraisals and rewards practices with BPM.

A mixed-method approach has been employed by combining survey results with case studies to offer first-hand evidence. Survey data have been used to quantify the real impact of process-oriented appraisals and rewards. Next, case studies with 10 organizations have allowed us to gain deeper insight into organizational practices for making appraisals and rewards more process-oriented.

The survey proves that process-oriented employee appraisals and rewards positively affect performance if different employee levels are involved. The case studies reveal similarities and differences in alignment efforts across organizations, based on pattern-matching and a multidimensional analysis, resulting in four alignment patterns.

The findings extend knowledge about appraisals and rewards within a business process context by providing a quantification and pattern refinement, which specifically advance a BPM-facilitating culture.

Managers and executives benefit from the recommendations for a gradual BPM adoption to improve the success of their business processes and their people-related practices.

The authors offer one of the first in-depth, cross-disciplinary studies that intend to bridge between the disciplines of BPM and human resource management (HRM).

Reviews reward management practice in the construction industry, based on a postal survey of larger construction firms. The research results provide little evidence of thorough‐going use of reward management to encourage and reinforce organizational change. Collective agreements survive for manual employees. Non‐manual employees are loosely grouped in broad‐banded grading structures with significant scope for managerial discretion in the treatment of individual salaries. However, there is little evidence of developed performance management systems. The absence of more formalized reward systems may provide a short‐term benefit in allowing considerable flexibility but may have negative implications for long‐term productivity, the control of wage costs and the availability of skills. Given the uneven gender balance, existing pay systems could also give rise to claims for equal pay.

This paper aims to investigate the combined effect of two interventions, perspective taking and incentives, on auditors’ professional skepticism (hereafter skepticism) when auditing complex estimates. Specifically, this paper examines the different ways that perspective taking (management versus inspector) and incentives (absent versus reward versus penalty) combine to impact skepticism.

This paper uses an experiment with 177 experienced Big 4 auditors. The experiment used a 2 (management vs inspector perspective) × 3 (absent vs reward vs penalty incentives) between-subjects design.

In the absence of incentives, adopting a management perspective raises situational skepticism when measuring skepticism as appropriateness of management’s fair value estimate while adopting an inspector perspective raises situational skepticism when measuring skepticism as need for more evidence. The authors find some evidence that incentives complement perspective-taking by enhancing those aspects of skepticism for which perspective-taking performs poorly. When assessing management assumptions, auditors adopting an inspector perspective enhance their skepticism more substantially than those adopting a management perspective, and this enhancement is greater with rewards than with penalties. However, this study does not detect an interaction between incentive type and perspective-taking on auditor skepticism in relation to gathering additional evidence.

This paper extends the literature by shifting the focus from a single perspective to a comparison of two perspective-taking approaches and discusses how each of these approaches enhances different aspects of skepticism. This paper also illustrates the importance of the interplay between perspective-taking and incentives in enhancing auditor skepticism.

The purpose of this study is to investigate the impact of reward systems on team performance and analyze how satisfaction with rewards can result in better working performance and cohesiveness in the job environment.

Data was collected from 32 single members of different teams working in 10 selected banks from the Middle East and North Africa region.

The analysis from empirical findings reveals that there is a positive link between reward systems and team performance. More particularly, profit sharing has positive effects on team performance and collective bargaining reward systems affect significantly team cohesiveness. These links create an opportunity for employers to use reward systems as a motivating factor to direct team behavior toward more employee retention.

This study contributes to the teamwork performance research stream by empirically studying how rewards improve team performance and cohesiveness in Eastern contexts. Studies in such contexts are relatively rare.

Customer‐contact employees are a critical asset of service organizations due to the interactive nature of service delivery. Customer‐contact employees are boundary spanners who attempt to serve both internal and external constituents. Attempting to serve two masters can result in role conflict and the present effort presents and tests a framework for understanding possible antecedents and consequences of such role conflict. Survey data collected from 200 telephone service employees in an insurance company revealed at least partial support for the following hypotheses: role conflict emerges when there is a discrepancy between what employees think customers expect of them and what they report management rewards them for doing; role conflict, in turn, is related to employee attitudinal (e.g. job satisfaction) and behavioral (e.g. absenteeism) outcomes; and role conflict mediates the relationship between service orientation discrepancy and employee outcomes. Implications of the results for the management of service employees and service quality are presented.

A major requirement and practice in human resource management of an organisation is the award of appropriate reward packages to employees. This paper aims to examine the importance attached to reward packages by personnel of quantity surveying firms (QSFs) and the level of adoption of the packages with a view to develop important ones that can enhance quality of performance and reliability of the employees.

Questionnaires were administered on registered quantity surveyors employed in QSFs in the study area, which was Lagos State, Nigeria. Mean item score and chi-square were used to examine the significance of importance attached to available reward packages by employees, whereas factor analysis was used to highlight and group identified available reward packages.

Basic pay, that is salary and wages, is the most important and mostly used reward package, whereas the least are service recognition and profit sharing. Most of the reward packages were found to be important to the development of QSFs, and the variables were extracted and grouped into eight components.

As much as basic pay is a global and traditional reward system, managers and directors of QSFs should ensure that personnel with long-term commitment to the mission and vision of the company are duly recognised and rewarded accordingly. More so, profit from the proceed and benefits of the company should be shared in an appropriate manner, especially if employees are involved in securing jobs from clients.

How can managers optimally distribute rewards among individuals in a job group? While the management literature on compensation has established the need for equitable reimbursements for individuals holding similar positions in a function or group, an objective grounding of rewards allocation has certainly escaped scrutiny. This paper aims to address this issue.

Using an optimization model based on a financial rubric, the portfolio approach allows organizations to envision human capital assets as a set (i.e. a team, group, function), rather than independent contractors. The portfolio can be organized and managed for meeting various organizational objectives (e.g. optimizing returns and instrumental benefits, assessing resource allocations).

This research introduces an innovative portfolio management scheme for employee rewards distribution. Akin to investing in capital assets, organizations invest considerable resources in their human capital. In doing so, organizations, over time, create a portfolio of human capital assets. The findings reduce large variances in rewards distribution yet serving employee and management considerations.

The research has tremendous implications for managers who can mitigate serious equitable rewards distribution issues by creating a process that exemplifies rewards distribution using four different rewards allocation scenarios based on varying managerial prerogatives.

This research is a unique model that addresses a pressing human resource issue by solution based on a usable and feasible optimization mechanism from financial portfolio theory.