Evaluation of Reward Processes

Need to Evaluate Reward Processes

It is one thing for organizations to institute reward processes and it is another thing for them to evaluate whether the reward processes are being effective.

In other words, organizations need to constantly evaluate whether their reward processes are serving the purpose for which they were instituted. For instance, despite high salary and perks, if the attrition rate is high, then organizations must check whether the reward systems in place are effective to guard against attrition. Next, there are many organizations that have good reward systems but are not doing well in the marketplace. Third, if quality talent is migrating to other companies, then the affected organizations must review and evaluate their reward processes. The easiest way to do this would be to obtain feedback from the employees about whether they are satisfied with the rewards and whether their contributions are being matched by the rewards.

Ways to Evaluate Reward Processes

These satisfaction surveys and assessments done in a confidential manner can be effective sources of evaluation of the reward processes. The key aspect here is that blind surveys must be carried out which means that the identity of the employees must not be revealed or know to anyone except for the HR personnel. The other aspect about evaluating the reward processes are the exit interviews conducted when employees quit the company. These exit interviews can have questions about whether the organization’s reward processes are adequate and whether the rewards are too low for the contributions of the employees.

The evaluation of the reward processes can be done from the organizational perspective as well which means that instead of only asking employees about the adequacy of the reward processes, organizations can conduct market rate surveys and engage consulting firms to evaluate their reward processes. For instance, an external evaluation of the reward processes in an organization is objective and unbiased and hence, can be used to improve or fine-tune the reward processes. Apart from this, matching reward systems with performance is usually the key to reward systems. An evaluation of this can be done by checking whether the high performers are being rewarded or whether quality talent is languishing because of lack of rewards for their performance.

Role of Organizational Politics

In many organizations, politics plays an important role in the rewards process and hence, this is a crucial aspect that cannot be ignored. Without saying so much as that politics should be avoided, the intention here is that there must be a balancing act between the competing interests for rewards and the desirability of rewarding talent.

In other words, while the practice of playing favorites by managers cannot be ruled out completely, efforts must be made to ensure that a proper evaluation of rewards for the employees is done which precludes those who are victims from not leaving the company.

Closing Thoughts

The bottom line of any organizational process is whether it is effective and efficient. Hence, as with other organizational processes, reward processes must be evaluated for their effectiveness periodically. Only then would organizations have an idea whether their reward processes are doing the job.


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