ASSIGNMENT TO:-
DR. SHAMIM AL AZIZ LALIN
ASSISTANT PROFESSOR
DEPARTMENT OF BUSINESS ADMINISTRATION
NORTH EAST UNIVERSITY BANGLADESH
ASSIGNMENT BY:-
MAIMUNA BEGUM
ROLL NO: - 0562220004083503
DEPARTMENT OF BUSINESS ADMINISTRATION
NORTH EAST UNIVERSITY BANGLADESH
DATE OF SUBMISSION:- 19 NOVEMBER, 2023
1.Contrast intrinsic and extrinsic rewards.
Intrinsic rewards actually fulfills employee’s intrinsic factors or motivators and thus motivates
him. Examples include; giving challenging task, involving in decision making process, giving a higher
rank in hierarchy etc all these rewards do not required to have increased salary as well and employee
may be working at higher management rank without an increase in the salary and still more motivated.
Extrinsic rewards actually fulfills employees extrinsic factors or hygiene factors and thus do not let
him start thinking about leaving the company. Examples include; pay rise, bonuses, paid leaves, annual
recreational plans etc.
2.How do financial and nonlinancial rewards differ?
Financial and non-financial rewards are two types of incentives that employers use tomotivatetheir
employees. Financial rewards are tangible rewards that provide financial gain to theemployee, such as
pay, bonuses, incentives, profit sharing, etc1. They are also called extrinsic rewards. Non-financial
rewards, on the other hand, are intangible rewards that do not provide financial gain to the employee, but
rather focus on appreciating employees through benefits, recognition, autonomy, etc. They are also
called intrinsic rewards.
Here are some examples of financial and non-financial rewards:
Financial rewards: Pay, bonuses, incentives, profit sharing, stock options, retirement benefit etc.
Non-financial rewards:Recognition, appreciation, autonomy, flexible work hours, career
advancement opportunities, employee empowerment, etc
While financial rewards are important to meet the basic needs of employees, non-financial rewards are
essential to satisfy their psychological and emotional needs . Research has shown that non-financial
rewards such as verbal praise and public recognition are fantastic ways to boost overall morale, bolster
your team and give them a real sense of value which, in turn, will help engage and fulfill them .It’s
important to note that non-financial rewards are not always free. For example, providing employees with
autonomy or flexible work hours may require additional resources or planning 1. However, the benefits
of non-financial rewards can be significant in terms of employee satisfaction, motivation, and retention.
3. What is a membership based reward?
Management based rewards are those rewards which are paid on the basis of being a member of an
organization. In other words if you are a member of a particular organization you are most likely to get
such kind of rewards. These rewards are allocated in return of employee’s membership in an
organization such that it goes to all employees irrespective of their performance. But management based
rewards are not performance based they are given to all employees in general.
How does it differ from a performance-based reward?
1. Performance based rewards are allocated on the basis of performance of an employee whereas
membership based rewards is given to all employees who are members of an organization
2.Performance based rewards are given in the form of commissions incentive systems or piece rate play
plans whereas membership based rewards majorly paid in the form of benefits and services being
provided to the employees of an organization.
4. What is compensation administration?
Compensation administration is a segment of management or human resource management that focuses
on planning, organizing, and controlling the direct and indirect payments employees receive for the
work they perform . It is a strategic management tool of compensation management and HR
management to match productivity with the cost of labor and employees to get satisfaction of their worth
and values 2. The ultimate objectives of compensation administration are efficient maintenance of a
productive workforce, equitable pay, and compliance with federal, state, and local regulations based on
what companies can afford.
What does it entail?
1. Controls of wage and salary bills.
2. Establishes the fair and equitable remuneration for various categories of staff.
3. Utilizes of wages and salaries as an incentive to greater employee productivity.
4. Maintains of a satisfactory public relations image.
5. How do gemmental influences affect compensation administration?
Compensation administration is a sector of management.This focuses on planning, organizing, and
controlling the direct and indirect payment employees receive. One example that the government
influence on compensation administration is Fair Labor Act which requires minimum wage, and overtime
pay. Exempt employees include professional and managerial employees Nonexempt employees who are
eligible for premium pay (time and one- half) –when they work more than 40 hours in a week. Equal Pay
Act requires that men and women hired for the same job be paid the same. The government requires
employers to deduct funds from employees’ wages for federal income taxes, social security and state and
local income taxes.
If the government is the employer, it can establish pay levels by setting legal rates and may create jobs for
certain categories of workers thus reducing the supply of workers and affecting pay rates.
6. What is job evaluation?
Job evaluation is a systematic process of determining the value or worth of a job with other jobs in an
organization. It is a method for comparing jobs to provide a basis for grading and pay structure. The
objective of job evaluation is to price the job rather than the man. Job evaluation is concerned with
assessing the value of one job to another to build a sound wage or salary structure
Discuss the three basic methods of job evaluation
Three common methods of a job evaluation are the ranking method, the classification method and the
point method.
The Ranking Method
The ranking method is a typical hierarchy in a company. Jobs are ranked in the order of duties and
power. This is often seen in smaller companies with fewer than 40 employees. The top of the
hierarchy is considered the most important level; the person who sits at the top has the most authority.
As you go down in the ranking method, duties become less specialized and jobs considered less
valuable or expendable. Salaries are typically generated in order of job importance to the company.
An example of the ranking method might have the vice president of operations over the marketing
director. Under the marketing director might be the sales representative followed by a clerk and a
receptionist.
The Classification Method
The classification method creates a grading system for each job. The job position might be generic,
such as creative associate, but the person filling this level of competency has specific skills and
specific duties. For example, you may advertise the job with pay commensurate with experience and
education. The classifications would then break down that experience and education into three levels:
level one, level two and level three.
Level three might be the most educated person with a four-year university degree and three years of
applicable experience. Level two might have the requirement of a two-year degree and two years of
experience. The level one candidate has no degree but has two years of experience in the related job
activities.
The Point Method
The point system is used in large organizations and is usually more expensive to establish, but after it
is established, it is easier to implement. It defines roles in a similar way to a ranking system but across
various types of skill sets in a large organization. This method often considers 11 to 28 factors that
define the level of expertise, importance and need of a specific job. For example, knowledge and skills
might be one factor important to a company. Another might be the work environment, while another is
communication skills.
7. What are the advantages and disadvantages of (a) individual incentives, (b) group incentives
and (c) organization wide incentives?
Individual incentives refer to incentives given to individual employees for their additional contribution
towards organizational objectives. Under it, incentives are calculated on the basis of individual
performance that can be measurable in quantitative terms. This is a most popular form of incentive in the
industry under which employees are rewarded individually for their additional contributions.
Advantages of Individual Incentives:
1. Employees are individually motivated for a higher level of performance in the organization.
2. Organizational ability will increase due to individual’s satisfaction at work.
3. Individual incentives will result in greater job satisfaction and organizational productivity.
4. Individual incentive reduces organizational expenses.
5. Individual incentives can be easily administered and applied.
Disadvantages of Individual Incentives
1. Since the individual incentive is provided with an additional output, employees tend to increase
their output as far as possible and they give less importance to the quality.
2. Goal conflict occurs between individual goals and organizational goals.
3. The quality of work life is reduced.
4. The living standard of employees will be uncertain.
5. Individual incentive does not promote teamwork,
6. Bonuses are nor directly linked to employees performance.
Individual incentive plans can create a sense of healthy competition within an organization, as
employees push themselves to excel to keep pace with or surpass top-performing colleagues. There’s no
blame game with individualized incentive plans. Employees succeed or fail based on their own merit,
with staffers understanding that they are in control of their own earning potential.
Group incentives make a strong sense where employee’s tasks are interdependent and thus require a
collective effort for the completion of such tasks. Especially, this system of incentive is useful in project
teams where one worker’s contribution is almost impossible to reflect in measurable units. Under this
plan, a productive plan is set as standard performance for a group of employees and the reward is
provided by assessing the performance of the whole team.
Advantages of Group Incentives
Creating a group incentive plan can help foster relationships between staff members, encouraging them
to find ways to work together in a collective environment in order to achieve group goals. The approach
can build a stronger team, encourage brainstorming and create a vested sense of project ownership
across the board.
1. Group incentive is suitable for employees who perform interdependent and interrelated tasks.
2. Group incentive enhances group work so that the jobs can be performed effectively.
3. Group incentive helps to enhance team spirit at work.
4. Group incentive encourages a sense of cooperation and responsibility.
5. Group incentive facilitates on-the-job training as the group members have interest in getting new
people trained as quickly as possible.
6. Group incentive encourages employee participation in the group, job satisfaction and quality of
work life at organization’s environment.
Disadvantages of Group Incentives
If team members perform at vastly different levels, creating a group incentive can set the stage for drama
in the workplace, particularly if some staff members feel compelled to work harder than others to carry
the workload. This can lead to resentment, infighting and even a hostile work environment.
1. No reward is solely on individual’s own effort.
2. Due to group/team focus, individual job performance will not be improved.
3. A group incentive plan may be less effective as compared to an individual incentive plan
because, under it, the individual does not see his/her effort leading to the award.
4. Since overall performance depends on team effort the conflict and disagreement may be seen
in the workplace among teammates.
5. The problem of self-deception can occur.
6. Usually, group members expect greater than average rewards, which lead to internal conflict
within the team.
When the incentives are provided to all employees of the organization, it is called organizational
incentives. This kind of incentive is used to motivate all employees at work for organizational
effectiveness. The primary goal of organizational incentive is to direct the efforts of all employees
toward achieving organization’s overall mission, vision, objectives. This incentive plan produces a
reward for all employees working in a particular organization.
Advantages of Organizational Incentives
1. Organizational incentive enhances organizational effectiveness.
2. Organizational incentive helps to enhance teamwork.
3. Organizational incentive encourages employee participation at work.
4. Organizational incentive adds a new dimension in organizational productivity and job
satisfaction.
5. Organizational incentive ensures employee relations among the employees as well as between
the employees and management
Disadvantages of Organizational Incentives
1. Since the incentive depends on organizational performance, employees may not be motivated at
the individual level.
2. It will be complex to determine the amount of incentive among different levels of employees
3. 3 .Organizational incentive plan does not provide an instant incentive to employees.
4. Organizational incentive does not depend on individual performance.
8. What is broad-banding and how does it work?
Broad banding is defined as a method for evaluation and construction of job grading structure or typical
salary band of an organization that falls between by spot salaries against numerous job grades or bands,
Broad banding is to establish what is required to pay for a specific positions and incumbents within the
existing positions.
How Does Broadbanding Work?
The basic working of broadbanding is to classify the roles and designations of the employee in a
company and manage the business's overall structure. The working protocol of the broadbanding system
can be categorised into three main roles.
1. Setting up the Growth Plan
A proper growth plan for the company must be set, and every employee must be allowed to choose their
respective fields in which they have a skill and passion. Therefore, the employee's work, which
positively affects the growth rate, will determine the salary payout for that individual employee.
2. Explaining the Management Structure
However, there must be a management structure for the employees' work and their roles. Mostly
everything must be generalised and recorded responsibly. Each employee needs a supervisor, manager
or leader to guide them properly and nourish their growth rate.
3. Evaluating the Salary Based on Job Interview
Most of the basic part of the salary must be evaluated during the job interview of the employee. This is
because the job interview plays a great role in determining the individual's skill and passion and
assuming the future growth rate of that particular individual within the company.
