Reward System Research Paper

There is no doubt that, starting a business, every leader aims to progress and to thrive. An established enterprise is expected to be profitable and successful.  Every prosperous businessman will tell you that the guarantee of success is the quality staff recruitment as employers clearly understand the importance of the staff for the enterprise. The employees dealing with customers can lead their business either to success or to a failure. Therefore the worthy remuneration of labor is very significant in any business.

Base-pay reward system is the most widespread pay scheme among the employers. Its simplicity and stability attracts the majority of people among employers and employees. Still, it also has its strong and weak points.

One of its greatest advantages is the certainty of employees in their salary. Having their wage rate guaranteed they are sure that they will get their money regularly. At the same time the employees’ pay may change according to their performance. It is also a plus as it gives an incentive to employees and encourages them to work better and more efficiently. Employees are motivated both by financial and non-financial recompenses. Rewards do play a significant role in the employees’ performance.

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There is another widespread reward scheme – time-rate pay system. However, it is not as profitable for a company as the base pay as it does not encourage the staff to aspire to achieve the goals of the enterprise. The method of giving rewards according to the achievement of established goals contributes much to the successful work of the company as people are interested not only in their own promotion but in the promotion of the whole company as well. Management by objectives stipulates joining of efforts of managers and employees in achieving well-defined objectives. Very often managers fail to determine the main goals of the company and to come to agreement with the personnel about them. Management by objectives presupposes exact written statement of objectives for the concrete period and the time for their control and achievement. The objective should be achievable, that is people should clearly realize that they can attain the goal. Then they are motivated and can use their energy sparingly. Otherwise, if the aim is initially unachievable, people won’t even try to attain it. The employees should realize that they can influence on the situation, can change it and rule it, that the achievement of the goal is in their hands.

Being so effective, base-pay reward system still has its complications. Compared with time-rate pay, it is more difficult to be administered and needs special staff to be recruited. Besides, in comparison with time-rate pay it creates more difficulties for employers in planning the budget of the company.

To make a conclusion, we see that though base-pay reward system has some weak points, it remains the most reliable and the safest pay system. It satisfies employees and gives an incentive to work better. The pay, based on the achievement of established goals, contributes much to the success of the company. The time-rate pay system is easier and simpler, but it does not contribute to the prosperity of the company as it does not stimulate workers to achieve goals, established by the managers of the company.


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Howell T. Marvin. (2006). Actionable Performance
Measurement: A Key to Success. ASQ Quality Press; Pap/Cdr edition
The Art of Motivation: An Incentive Industry Primer
Retrieved August 19, 2007 from


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