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Evaluating the Quality of Rewards Systems

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  • Petr Petera

Abstract

This paper deals with the issue of desired characteristics of rewards systems and outlines possible ways of their evaluation. Aims of the rewards systems are analyzed and desired properties, components and updating procedures that should be put in place are identified. Rewards system is understood as a tool for supporting business's goals, attracting, motivating and retaining competent employees. It is stressed that rewards system is an important but not the only tool for reaching the mentioned goals and it should be used congruently with other tools (e.g. proper job design, recruiting, training, creating positive workplace). An encyclopedic preview of rewards types is given, their various classifications are introduced and it is underlined that type of chosen reward should match with the objective that is supposed to be accomplished. Finally, the impact of rewards on motivation and behavior is addressed and a framework for analyzing of incentives (variable payments for performance) is proposed.

Suggested Citation

  • Petr Petera, 2011. "Evaluating the Quality of Rewards Systems," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2011(3), pages 66-91.
    • Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:3:id:26:p:66-91
    DOI: 10.18267/j.efaj.26
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    1. Bruno S. Frey & Margit Osterloh, "undated". "Yes, Managers Should be Paid Like Bureaucrats," IEW - Working Papers 187, Institute for Empirical Research in Economics - University of Zurich.
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    JEL classification:

    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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