Rewards And Payments In Managing Human Capital


Now days the Reward and payment system is a most important part of Human Resources Management. Human recourses management means managing people at work place. A human recourse managers maintaining their staff by using managerial techniques like, planning, organizing, directing, and controlling. Every organization consist a human recourse management for the well being of the employees. The employees are the important asset of an organization management must realize that's important. Keeping employees is very difficult. For reducing the employee tern over from the organization, the managements are using fare reward and payment. All the people are working for the money. But some rewards are non monitory. The payment and reward

This system is mainly divided in to two monetary rewards and non monitory, such as pay wages or salaries, fringe benefits and incentive schemes. Medicals, education, housing, pension plans are some of the examples of non- monetary rewards. In today's world the payment and reward are the first benefit to the employees. On the basis of their performance the employees get more and more salary is keep on the employee pay rolls. The employer case all the benefits going is the direct expenses even the non monitory benefits. Even though the introduce this techniques for boosting the production and encouraging the workers in their organization. The large scale organizations are giving Moore cash to the employees for getting the good result. (Noe, A. 2000)

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In this highly competitive world the organizations facing more problems in the outside and inside the management wants to keep an equilibrium in between this problems. Here we can available highly skilled workers and high perfuming technologies in the labor market. In the business organization, the managements are provide well equipped atmospiar for getting more results. More than the payment they just giving some more that's for getting good result. The payment and reward giving for getting good results. <

The main aim of the payment system to improve the performance of for achieving desired objectives. The payment systems followed by the organizations some important terms are considered. That is called the wage mix. In this case they considered two main factor internal and external factors. Compensation, organizational policy worth of job, employees performance ,skill and ability. This matters are come under the internal factors. The external factors the condition of employees market ,wage rate of areas. Etc . the payment and rewards are broadly divided in to two that's are briefly discussed below.



The core theme of monetary benefits is to the payment by cash given to the employees for completing a performance for the organization. The workers are doing their works for getting the money .this money using for getting the good life, the money is controlling world. All matters are directly related to the money, so monitor benefits are very important one in the world. According to Abrahm maslow " the human thinking always about the forward .if one they attain the any objectives next time the want more things. In his concept the employees motivating factors change in all stages."

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This means the persons thinking and needs are always change because the needs and wants of the human beings are unlimited. That are at ones a person attain the basic needs that called physiological needs. That include basic life needs , food air drink, shelter, sex sleep. After attaining a person the basic needs he will think about the safety needs such as protection, affection, order, law, .etc.. That's are the main default of the human beings. After getting the safety needs the human beings are naturally think about Belongingness and love needs( family ,affection, relationship,).Then probably the humans change their needs in to Esteem needs ,in this stage the personal growth and fulfillment. Finally the persons reach their needs and wants on the self actualization.

One example of monetary incentives is mutual funds provided through company pension plans or insurance programs. Because it has been recommended that employees, depending on their age, have various wants pertaining to incentives, traditional incentive packages are being replaced with alternative to magnetize younger employees. Managers are constantly glance for the classy means for to make a exclusive workplace where the employees can work to their optimum level to create better results.

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The managers are dealing many peoples in their every working days. An employer should consider the stages of each person. Do not give more than expectation, and never give more than the expectation of the employees. The manager must consider the actual stages and the return of the employees. Equal pay for equal works and provide more chance to the decision making . if the employer giving more motivation by means of the money that not very faire to the organization. Because that directly affect the organizational profits and loss. In some organizations they give more share of money than any one in their expenses. the employees benefits given by different organization are following.

Monetary benefits consist of ;


Profit sharing is new term this means the some share of the organizational profits given to the organizational employees. In addition to the employee wages the share of profit receive by the employees. This is a system is provide some share of net profits.thi is for to work more by the employees in the organization ,ones they getting the share of profit from the employer they will try to improve their works and try to get the more profit. This methods the management fix some rate of profit that should reach to the employees . this techniques give more advantage to the management, by means of ,don't want any supervision in the work place, the employees control the use of materials.

Examples of profit sharing :-

In the carborundum universal. Ltd. Edapplly one of the chemical industry of India. They giving to their share of profit to their employees for getting their desired out put and reduce the cost of productions. They mainly produce the carbon wheels for different purposes. In this units they tested this strategy after 1995 for getting good result. In that period the spread their business in to all the part of the world, they got many orders in that period the management know that they cant produce more product. But they got many materials and labors. that time the management introduce profit sharing method, they introduce many system but that were failed but in the case of profit sharing they get expected, their sales increased cost of production decreased and the eligible for meeting any demand from any were in the world. Through that they getting more profits in to the organization and more over the employees are very satisfied in their works.

Their schemes are following,

PROFIT THRESHHOLD; A desired share establish for their goal achievement like that give to the employees get some profit when they archive £100000 in profit in a year.

PERCENTAGE OF PROFIT: The Carborundum universal .ltd . establish to give some share of profits .That is the employees may get 10 percentage on each £ 100000 will be set side the profit sharing program.

This scheme shown the company profits gradually increase in recent year even to give some share to the employees.


The employees stock ownership plan is the system which are using in co operative sector business that means the employees make one fund for the well being of the employees this funds use for buying the securities of their organisation by the helps and support of the organisational management can sell the securities to the other person with high rates. His doing as normal share of the organisations. By this schemes the employees can get the participation of the management. And the managerial point of view the employees will work more than their usual works. These funds can use the employees for their well beings and this funds can use in future of the employees. When they getting their pensioned other things.

The Employee Stock Ownership Plan is mainly used in hospital services and the restaurants because their doctors and valuable staff are very important one for their business. The patients are coming only by the reason of the good treatment of the doctor. One of the leading co operative multi speciality hospital of India (MIMS) Malabar institute of medical since. Is following this system. They bought number of doctors in different part of India and give some portion of share in the organisation. This means they get ownership in the organisation. This doctors are getting the salary and other allowances as a employees and getting the profit as a owners. By the systems they maid India's best hospital in a small town. This hospital get the best hospital award in continues 2006 and 2007 years.

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The employees benefits in this case are discussed below, there are many reasons that an ESOP may be more desirable than providing stock-based deferred compensation through an ordinary tax-qualified stock bonus plan. These include an ESOP's ability to:

acquire a block of securities in a single transaction;

allow a shareholder to sell employer securities to the plan and defer paying tax on any gain;

immediately distribute dividends on employer stock held by the plan (rather than accumulating them for at least two years as required under other types of defined contribution plans), and

obtain a deduction for its sponsoring employer for any dividends that it pays on employer securities held by the ESOP.


This means to share the total cost of the production and other overheads by the management and the employees .this concept introduced by the manufacturing organisation for reducing the cost of productions and increase the total revenue in to the business. This screams provide a deep awareness to the employees by their own that should reduce the un usual breaks, strikes, and the they limit the use of materials.

Examples of salon plan;

Nabula Politheens MEXICO estd 1995

Institutionalising, a reward system based on measurable performance and incentives for environmental improvements, serves as a potential mechanism to enhance a firm's environmental performance. Our main purpose is to integrate the principles of environmental management and the Scanlon Plan as a means to achieve this. Specifically, our paper advocates the utilisation of Scanlon Plan principles for environmental performance. The Scanlon Plan features (1) collectiveness and cooperation, (2) employee participation, (3) quantifiable performance and bonus measures and (4) an equitable reward system; all components that would enhance environmental performance.

4 Annual Bonus, project bonuses

In the case of reward and payment the annual bonus, or project bonuses are very important in each organization. This is a reward as well as motivation to their efforts . the management wants more output with their available human recourses . the employees gets some more amount than their salary by annually or after completion of a projects. This is a expense in the case of organizations. But this is a motivating reward to the employees. By introducing this system the management can get the desired out put with their desired period of time. In all most all the governmental organization are using this system to their employees. some fixed month or units of output is fixed and after attaining that object they will get some more money than their salary. Such schemes known as bonus plans.

Example :- In UK the leading gas company British gas giving to their employees in very Christmas and new year some more money than their salary and their incentives. This is helps to the employer to keep the employee satisfactions. And that increase the employees worship towards their company

5 Gain sharing . Merit plans

This is an important system of reward in the case of the business organisation. This means to share the profitable benefits equal to the employees and the management. This like a team together the owners and the employees but one benefits to the management. They sharing only the gains only not sharing the loss and risk in behind the business. This system they give more rewards those perfumed well in the organisation. This means the sharing the returns only to the employees. This will helps to management get more profit in the organisation. The employees always try to get the profit for the organisation.


(e.g., Christmas and performance-linked), and additional paid vacation time. Conventionally, these have supported to preserve a positive motivational environment for associates . ( pfeiffer 2001).


The non monitory incentives means give more satisfaction without the means of monitory .or the objective of non-monetary incentives is to remunerate associates for excellent job performance through opportunities. Non-monetary incentives contain elastic work hours, training, pleasing work environment, and sabbaticals.

In this field the management decide to improve the performance and the out output. the introduce the non monitory encouraging activities for the employees of the organization. This will helps to management the employees on the high satisfaction ally. The peoples are going to retired after getting the old age. The main aim of this process is mainly increase the results and the keeping employees are on happy. There are many types of techniques are using the management. Without paying money. Monetary and non-monetary incentives differ in their roles, effectiveness, and appropriateness, based on the type of incentive. .( Deeprose.1993) argues that" incentives really hinder associates and companies by declining associates' motivation, interest, and job satisfaction". This is just the opposite of what incentives were produced to accomplish. Incentives must consider the workers for whom they were made. Equilibrium between monetary and non-monetary incentives should be used to satisfy the various needs and welfare of employees.


In conclusion, the management using more techniques for reducing the cost of production. In the case of manufacturing the land labor capital is the important thing, among this the labor power is extremely important one, the land gets the rent, capital gets interest and the labor get wages ,the wage and salary is currently very described one, the payment and reward is manage by the human resource management . the payment and reward given to the employees for his contribution of production process. When giving any amount to the labor the management must consider the result of that employee in the organization. There is a direct relationship in between the reward and performance. If the performance is fare in the production process the labor is eligible for getting the reward. If the reward on the basis of the performance the employees should perfume very well and they getting more satisfaction. In the managerial point of view that also fare become they getting more money to their investment within before their expectation. That leads to improve the organizational performance and their wealth.

More over the rewards on the basis of the performance reduce the employees tern over ratio in their industry, and they can keep their existing employees in the business . that will lead to get more advanced employees for their specialized field. The management must considered the employees are the real asset of the organization . that will leads to reduce the work breaks and strike in their business . the management must develop a suitable payment and reward to the employees. That must to describe to the employees for their awareness. This schemes must acceptable by the management because the management wants to reduce cost of production. For example :- Holland and Barrette. Ltd introduce the sales commotion for their staff by this techniques the employees always try to get more sales for the organization. The main reason the workers get some share of sales. This policy helps to increase the sales of the organization. Another reason for this they mainly deal healthy foods that's naturally extracted and it very attracted to the consumers, sometimes this the customer not aware about the product ,the sales mans playing good role in this business. In recent years the company gets more net profits. Now the managements and the employees are making good business for the their wellbeing's.



1 . Noe, A. (2000) Human resource management: gaining a competitive advantage. 3rdEdition. McGraw-Hill/Irwin

Edition: 3 - 2000

2. Deeprose How to recognize & reward employees: 150 ways to inspire peak performance

Edition: 2007 american management assosiation

3 . pfeiffer. Data Conversion: Calculating the Monetary Benefits By Jack J. Phillips,

Published on 989 market street, san francisco, CA 94103-1741

4. Smart .C. Higher Education: Handbook of Theory and Research:

5. Jackson.H. and Robert L. Mathis, John Human Resource Management 12th edition

6. Lesieur .G The Scanlon plan: a frontier in labor-management cooperation

 (Massachusetts Institute of Technology)

7. Profit sharing by American employers: examples from England, types from ...

  By National Civic Federation. Profit sharing dept. 1921



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