Rewards are incentives which organisations give to employees as motivation to attain their outcomes. They encompass offering meaningful recognition, offering rewards proportional to performance, allowing workers to select rewards and applying various rewards to meet various requirements (Rudman, 2020). Rewards should be consistent and transparent.

Consistency

This principle asserts that rewards should be consistently administered. This insinuates that all employees should get similar rewards for similar performance levels. This principle ensures that the rewards and fairly offered without favouring any employees. This encourages the employees to strive for greater performance since they know that the organisation will recognise and reward their efforts. Consistency also assists in building organisational trust since employees know they will receive fair treatment regardless of their seniority or position (Rudman, 2020). This assists in developing a positive work environment which encourages productivity and collaboration.

Transparency

The transparency principle refers to the idea that employees should understand the reward system, the reward-receiving criteria, and the reward’s value. According to the principle, organisations should communicate the reward system and the criteria to employees clearly and openly. This ensures that all employees understand the criteria, the systems and the reward they could receive (Rudman, 2020). Transparency also ensures that rewards are fairly distributed and that employees are appreciated and valued. This results in higher trust between the organisation and employees and assists in motivating employees and increasing their engagement.

Importance of principles of rewards to organisational culture and performance management

Consistency and transparency in rewards are critical to organisational performance and culture. Consistency ensures that employees receive fair treatment and rewards, while transparency allows the employees to understand ways they will reward. Consistency and transparency can assist in creating an engaged and positive work atmosphere, driving organisational performance.

Consistency in rewards assists in creating a sense of fairness among employees. When all employees get rewards for exemplary work equitably and fairly, it boosts their engagement and motivation. This is because employees feel appreciated and valued for their efforts, encouraging them to continue working harder and remain committed to the entity. Besides, consistency assists in eliminating any likely inequality feelings, which could result in workplace resentment and conflict.

Transparency assists in creating understanding and trust among employees. When employees clearly understand the reward system, such as ways their performance is measured and allocated, they can better plan and set their career goals. This ensures that the employees know about all actions and plans that the organisation is making. This ensures that all employees are on the same page and that the team members operate in unison towards common objectives. It also makes employees feel valued because they know their hard work will be noticed and appreciated (Rudman, 2020). This could create a positive work atmosphere and foster commitment and loyalty to the entity.

Generally, transparency and consistency as reward system principles are critical to creating an atmosphere where employees feel respected and valued and can succeed and contribute to the organisation’s success.

Reference

Rudman, R. (2020, August 10). Performance planning and review | Making employee appraisals work | Ri. Taylor and Francis. Available at: https://www.taylorfrancis.com/books/mono/10.4324/9781003116684/performance-planning-review-richard-rudman