PERSONNEL ADMINISTRATION

I. LESSON DISCUSSION:
MOTIVATIONAL FACTORS
These factors are related to the nature of work (job content) and are intrinsic to the job itself. These factors have a positive influence
on morale, satisfaction, efficiency and higher productivity.

Some of these factors are:

1. The job itself: To be motivated, people must like and enjoy their jobs. They become highly committed to goal achievement
and do not mind working late hours in order to do what is to be done. Their morale is high as evidenced by lack of
absenteeism and tardiness.
2. Recognition: Proper recognition of an employee's contribution by the management is highly morale boosting. It gives the
workers a. feeling of worth and self-esteem. It is human nature to be happy when appreciated. Thus, such recognition is
highly motivational.
3. Achievement: A goal achievement gives a great feeling of accomplishment. The goal must be challenging, requiring
initiative and creativity. An assembly line worker finishing his routine work hardly gets the feeling of achievement. The
opportunities must exist for the meaningful achievement; otherwise workers become sensitized to the environment and begin
to find faults with it.
4. Responsibility: It is an obligation on the part of the employee to carry out the assigned duties satisfactorily. The higher the
level of these duties, the more responsible the work would feel and more motivated he would be
5. Growth and advancement: These factors are all interrelated and are positively related to motivation. Job promotions,
higher responsibility, participation in central decision-making and executive benefits are all signs of growth and
advancement and add to dedication and commitment of employees

EMPLOYEE REWARD AND RECOGNITION SYSTEM

In a competitive business climate, more business owners are looking at improvements in quality while reducing costs.
Meanwhile, a strong economy has resulted in a tight job market. So while small businesses need to get more from their employees,
their employees are looking for more out of them. Employee reward and recognition programs are one method of motivating
employees to change work habits and key behaviors to benefit a small business.
REWARD VS. RECOGNITION
Although these terms are often used interchangeably, reward and recognition systems should be considered separately.
Employee reward systems refer to programs set up by a company to reward performance and motivate employees on individual and/or
group levels. They are normally considered separate from salary but may be monetary in nature or otherwise have a cost to the
company. While previously considered the domain of large companies, small businesses have also begun employing them as a tool to
lure top employees in a competitive job market as well as to increase employee performance.
As noted, although employee recognition programs are often combined with reward programs they retain a different purpose
altogether. They are intended to provide a psychological—rewards a financial—benefit. Although many elements of designing and
maintaining reward and recognition systems are the same, it is useful to keep this difference in mind, especially for small business
owners interested in motivating staffs while keeping costs low.
DIFFERENTIATING REWARDS FROM MERIT PAY AND THE PERFORMANCE APPRAISAL
In designing a reward program, a small business owner needs to separate the salary or merit pay system from the reward
system. Financial rewards, especially those given on a regular basis such as bonuses, profit sharing, etc., should be tied to an
employee's or a group's accomplishments and should be considered "pay at risk" in order to distance them from salary. By doing so, a
manager can avoid a sense of entitlement on the part of the employee and ensure that the reward emphasizes excellence or
achievement rather than basic competency.
Merit pay increases, then, are not part of an employee reward system. Normally, they are an increase for inflation with
additional percentages separating employees by competency. They are not particularly motivating since the distinction that is usually
made between a good employee and an average one is relatively small. In addition, they increase the fixed costs of a company as
opposed to variable pay increases, such as bonuses, which have to be "re-earned" each year. Finally, in many small businesses
teamwork is a crucial element of a successful employee's job. Merit increases generally review an individual's job performance,
without adequately taking into account the performance within the context of the group or business.

DESIGNING A REWARD PROGRAM

The keys to developing a reward program are as follows:

 Identification of company or group goals that the reward program will support
  Identification of the desired employee performance or behaviors that will reinforce the company's goals
 Determination of key measurements of the performance or behavior, based on the individual or group's previous
achievements
 Determination of appropriate rewards
 Communication of program to employees

In order to reap benefits such as increased productivity, the entrepreneur designing a reward program must identify company or
group goals to be reached and the behaviors or performance that will contribute to this. While this may seem obvious, companies
frequently make the mistake of rewarding behaviors or achievements that either fail to further business goals or actually sabotage
them. If teamwork is a business goal, a bonus system rewarding individuals who improve their productivity by themselves or at the
expense of another does not make sense. Likewise, if quality is an important issue for an entrepreneur, the reward system that he or
she designs should not emphasize rewarding the quantity of work accomplished by a business unit.

TYPES OF REWARD PROGRAMS

There are a number of different types of reward programs aimed at both individual and team performance.
1. Variable Pay
Variable pay or pay-for-performance is a compensation program in which a portion of a person's pay is considered "at risk."
Variable pay can be tied to the performance of the company, the results of a business unit, an individual's accomplishments, or
any combination of these. It can take many forms, including bonus programs, stock options, and one-time awards for significant
accomplishments. Some companies choose to pay their employees less than competitors but attempt to motivate and reward
employees using a variable pay program instead. Good incentive pay packages provide an optimal challenge, one that stretches
employees but remains in reach. If too much is required to reach the goal, the program will be ignored.
2. Bonuses
Bonus programs have been used in businesses for some time. They usually reward individual accomplishment and are
frequently used in sales organizations to encourage salespersons to generate additional business or higher profits. They can also
be used, however, to recognize group accomplishments. Indeed, increasing numbers of businesses have switched from individual
bonus programs to one which reward contributions to corporate performance at group, departmental, or company-wide levels.
According to some experts, small businesses interested in long-term benefits should probably consider another type of
reward. Bonuses are generally short-term motivators. By rewarding an employee's performance for the previous year, they
encourage a short-term perspective rather than future-oriented accomplishments. In addition, these programs need to be carefully
structured to ensure they are rewarding accomplishments above and beyond an individual or group's basic functions. Otherwise,
they run the risk of being perceived of as entitlements or regular merit pay, rather than a reward for outstanding work.
3. Profit Sharing
The amount given to an employee is usually equal to a percentage of the employee's salary and is disbursed after a business
closes its books for the year. The benefits can be provided either in actual cash or electronic transfer. A benefit for a company
offering this type of reward is that it can keep fixed costs low.
The idea behind profit sharing is to reward employees for their contributions to a company's achieved profit goal. It
encourages employees to stay put because it is usually structured to reward employees who stay with the company; most profit
sharing programs require an employee to be vested in the program over a number of years before receiving any money.
4. Stock Options
Employee stock-option programs give employees the right to buy a specified number of a company's shares at a fixed price
for a specified period of time. They are generally authorized by a company's board of directors and approved by its shareholders.
The number of options a company can award to employees is usually equal to a certain percentage of the company's shares
outstanding.
One benefit in offering stock options is a company's ability to take a tax deduction for compensation expense when it issues
shares to employees who are exercising their options. Another benefit to offering options is that while they could be considered a
portion of compensation, current accounting methods do not require businesses to show options as an expense on their books.
5. Group Based Reward System
As more small businesses use team structures to reach their goals, many entrepreneurs look for ways to reward cooperation
between departments and individuals. Bonuses, profit sharing, and stock options can all be used to reward team and group
accomplishments. An entrepreneur can choose to reward individual or group contributions or a combination of the two. Group-
based reward systems are based on a measurement of team performance, with individual rewards received on the basis of this
performance. While these systems encourage individual efforts toward common business goals, they also tend to reward under-
performing employees along with average and above-average employees. A reward program which recognizes individual
achievements in addition to team performance can provide extra incentive for employees.

Role of Compensation and Reward in Organization:

Compensation and reward system plays a vital role in a business organization. Since, among four Ms, i.e Men, Material,
Machine and Money, Men has been most important factor, it is impossible to imagine a business process without Men. Land, Labor,
Capital and Organization are four major factors of production.
 Every factor contributes to the process of production/business. It expects return from the business process such as Rent is the
return expected by the Landlord. Similarly Capitalist expects Interest and Organizers i.e Entrepreneur expects profits. The labor
expects wages from the process.
It is evident that other factors are in-human factors and as such labor plays vital role in bringing about the process of
production/business in motion. The other factors being human, has expectations, emotions, ambitions and egos. Labor therefore
expects to have fair share in the business/production process.

II. REFERENCES:
 https://www.inc.com/encyclopedia/employee-reward-and-recognition-systems.html
 Institutional Manual C/A+CT College

III. REQUIREMENTS:
Instruction: Write your answer on One Side of yellow pad paper. (5pts. each)

Let’s assume you are the owner of San Miguel Corporation. One of the student Amara Daya is having her thesis about how
businesses do gives motivations, rewards and recognitions to their employees. She asked your good office to answer questions
regarding her topics.
Below are the questions regarding motivation and employees rewards and recognition system.
1. Are you motivating your employees through monetary rewards? Explain your answer.
2. Are you rewarding, recognizing or criticizing your employees individually or try to motivate them as a team?
3. What types of rewards and recognition does your organization offer?
4. What are the eligibility/performance requirements for your reward and recognition program?
5. How does your organization communicate with employees about your reward and recognition program?
6. Who oversees the administration and implementation of your reward and recognition program?