What Are the Main Objectives of Reward Management Systems, and How Has Best Practice Influenced the Development of Them?

Abstract

As companies place greater emphasis on human resource management, reward management systems are increasingly being introduced to motivate employees and improve individual and organisational performance. The purpose of this paper is to discuss the objectives of reward management systems, best practices of reward management systems and how these practices can positively or negatively impact on the development of objectives. In addition to this, the drawbacks of reward power and transformational leadership from a gender perspective will also be explored. Using some typical examples, such as the bankruptcy of Enron, this paper concludes that managerial power and transformational leadership approaches are flawed and exaggerate the power of leaders in corporate decision-making. Companies should adopt both benchmarking and 360-degree feedback and focus more on ethical corporate culture, effective leadership and flexible compensation management systems to maximise the positive outcomes of best practice in compensation management systems.