Abstract
Reward is one of the most important things in Human Resources Management. It can be defined as the compensation people receive for their contribution to an organization or firm. It deals with the implementation of strategies in order to reward people fairly and equitably. How can compensation be analyzed? This subject has been studied by many theoreticians and we'll try to examine it.
First of all, there are external and internal factors that influence reward design. Concerning the external factors, political and economic factors are essential. For example, in China, the remuneration of some CEO must be approved by the government, whereas in the UK, the remuneration committee takes the decision. There are also cultural values. Some jobs are highly paid, others not. The labour market is also important especially in terms of supply and demand. Finally, a trade union can have a huge influence for the reward attribution. In some countries, their role is essential (France). In China, it is not allowed.
As far as internal factors are concerned, factors such as the product market conditions and the employer's cost structure, the organization's reward strategy (paying the market rate or not), the location of the organization (salaries are not the same in Nottingham and London), the job size and the individual characteristics (experiences, qualifications, skills and performance) have to be taken into consideration.
