Perfect Alignment

A reward strategy that leads to positive outcomes is one that provides equal weight age to both employee and employer perceptions, and is close to the organisational reality.

- Hareendrakumar V R And Dr Suresh Subramoniam

In every organisation, both the employer and the employees are equally concerned with the reward strategy, as it is a factor that protects their interests and existence. Employees naturally expect a fair reward for their contribution and, as social partners of the business, they have every right to get a proportionate share of the business gains. However, employers who are responsible for providing a good rewarding system would have their own perceptions, which many a time contradict employee expectations. This makes it tough for HR managers (HRM) to formulate a total rewarding strategy that can equally satisfy both parties. A reward strategy that does not match the perceptions of employees may not contribute to the positive attitudes and behaviours that lead to better performance. An objectively formulated reward strategy may not be a success despite its fairness, unless it is accepted by the employees.

Through the employee lens

Reward perception is a reality at any workplace—in every organisation, employees have their own perceptions regarding the benefits offered to them in recognition of their skills, experience, or performance. Perceptions vary with personal, environmental, and situational backgrounds and are an outcome of their experience and expectation. But they may not always reflect reality. They are subjective, override objective elements, and play a major role in shaping business performance. Perceived fairness with respect to rewards simply means that the employees value it as being fair. Most often, an objectively formulated reward system may not be valued even though it has maintained, a reasonable level of fairness in the distribution of outcomes. So, it is obvious that it is not the quality of reward but its perceptual acceptance that brings results.