Reward Management and Training and Development in Banks
Introduction
A company’s reward system is considered as an important tool in attracting, retaining and motivating employees. A total reward package includes base pay, performance based pay, compulsory employer-provided benefits and discretionary employer-provided benefits. The reward system is made up of compensation, incentives and benefits provided for the employee as a reward for their contribution to the organization (Sims 2002).
Compensation is defined by Sims (2002) as the human resources management function that deals with every type of reward individuals receive in exchange for performing organizational tasks. Defined in its broadest sense, compensation is any reward or payment given to a person for services performed. It includes, but is not limited to direct or indirect financial rewards. Compensation encompasses all of the rewards or payments – tangible and intangible, monetary and non-monetary, physical and psychological – that an organization provides its employees in exchange for the work perform (Caruth and Handlogten, 2001 p. 1). The second major component of a total compensation system is indirect monetary compensation or benefits. This component consists largely of items of monetary value an organization provides to employees in addition to salaries and wages, the first component of a compensation system (Caruth and Handlogten, 2001 p. 153). An incentive is any financial reward given to an employee for accomplishing specific results of a quantitative or qualitative nature. Incentives provide for variable rewards dependent upon the results accomplished, amount of work produced, or measurable performance (Caruth and Handlogten 2001). Indirect monetary benefits, together with direct monetary benefits are used to attract employees. Indirect monetary compensation also helps a company retain the employees it hires. Benefits provide a sense of security, they improve an employee’s general feelings of satisfaction about the organization (Caruth and Handlogten 2001).
Training and development programs are part of the company’s total reward system. Training according to Sims (2002) is an attempt to facilitate learning on job-related knowledge, skills and behaviours. It also helps the employees to correct and improve their performance deficiencies. Development on the other hand, aims to equip the employees with the required skills to perform their present and future jobs. Development of employees refers to increasing the knowledge, skills, and competencies of employees, which enhances their performance capacity and capability. Development also refers to increasing an organization’s efficiency, improving its effectiveness, enhancing its renewal capacity, and improving its competitive practices (Gilley & Maycunich 2000). Training and development is an important organizational activity. The aim of this activity is to develop the knowledge, skills and abilities of employees in order to ensure that they will perform their present jobs as well as future assignments effectively. Training and development can be used as a reward for employees who have showed potential and can be a corrective tool in order to correct employee behaviors.
Justification
In today’s business environment, organizations find themselves competing with each other for labor force. Employees have become more mobile and at the same time, the labor force is slowly becoming scarce. It is up to the organizations to come up with various strategies to attract and retain employees. This situation is also evident in the Banking Sector. Now more than ever, the importance of attractive rewards and compensation system is highlighted. Employers need to come up with compensation packages that include not only monetary rewards and compensation but benefits such as opportunities to be trained and to further develop the employees’ knowledge, skills and abilities. The researcher realizes this problem and because of this, decided to conduct a research about the topic.
Research Methodology
This research will make use of both quantitative and qualitative research methodologies. According to Newman and Benz (1998), a qualitative research involves an interpretative, naturalistic approach of the subject matter. Qualitative research is about studying things in their natural settings. A researcher conducting qualitative research attempts to make sense of, or interpret, phenomena in terms of the meaning people bring to them. Qualitative research involves different methods of gathering and collecting of empirical materials such as case study personal experience, introspective, life story, interview, observational, historical, interactions, and visual texts. This method of data collection is about exploring issues, understanding phenomena and answering questions. The quantitative paradigm is based on positivism which takes scientific explanation to be nomethetic (i.e. based on universal laws). Its main aims are to measure the social world, to test hypotheses and to predict and control human behavior (Newman and Benz 1998). Quantitative research is based on the assumption that the world can be investigated using scientific method and that there is an independent reality. Quantitative research is based on the belief that measurable influences (independent variables) affect measurable outcomes (dependent variables) in a cause-effect manner. Quantitative studies are studies in which the data can be analyzed using conventional statistical methods (Peat 2001). As its name implies, quantitative research is concerned with quantities – how to measure phenomena and how to express those measurement. A researcher who takes a quantitative approach to investigating a topic aims to learn more about it. Taking a quantitative approach to research implies asking questions about the phenomena that can be counted. Researchers who take a quantitative approach often work within positivism, as this paradigm frames the world as a collection of apparently independent phenomena to be counted, measured and otherwise catalogued as the prelude to deducing the rules or laws underlying them and giving them coherence (MacNaughton et al 2001). This is a method of data collection, that usually emphasizes on words rather than numeric in the collection of data and analysis whereby questionnaires, surveys and experiments are carried out (Bryman and Bell, 2003).
References
Caruth, D. and Handlogten, G. (2001). Managing Compensation (And Understanding It Too): A Handbook for the Perplexed. Westport CT: Quorum Books.
Gilley, J. and Maycunich, A. (2000). Beyond the Learning Organization: Creating a Culture of Continuous Growth and Development through State-Of-The-Art Human Resource Practices. Cambridge MA: Perseus Books.
Sims, R. (2002). Organizational Success through Effective Human Resources Management. Westport CT: Quorum Books.
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