Reward Management

Reward Management:
Pay is an important feature of human resource management - after all, it is the main
reason why people work. It is a sensitive and controversial area that has been extensively
debated at both practical and theoretical levels. In the US the term 'compensation' is used
to encompass everything received by an employed individual in return for work. For
example, Milcovich et al (2001: 6) state that:
"Employees may see compensation as a return in exchange between their employer and
themselves, as an entitlement for being an employee of the company, or as a reward for a
job well done”.
The reward or compensation people receive for their contribution to an organization

includes monetary and non-monetary components. Remuneration does not simply
compensate employees for their efforts - it also has an impact on the recruitment and
retention of talented people.
The term 'reward management' covers both the strategy and the practice of pay systems.
Traditionally, human resource or personnel sections have been concerned with levels and
schemes of payment whereas the process of paying employees - the payroll function - has
been the responsibility of finance departments. There is a trend towards integrating the
two, driven by new computerized packages offering a range of facilities. These are
described later in this chapter.
There are two basic types of pay schemes, although many organizations have systems
which include elements of both:
• Fixed levels of pay. Wages or salaries which do not vary from one period to the
next except by defined pay increases, generally on annual basis. There may be
scales of payments determined by age, responsibility or seniority. Most 'white-
collar' jobs were paid in this way until recently.
• Reward linked to performance. The link may be daily, weekly, monthly or
annualized. Payment for any one period varies from that for any other period,
depending on quantity or quality of work. Sales functions are commonly paid on
the basis of turnover; manual and production workers may be paid according to
work completed or items produced. Catering staff typically rely on direct
payment from satisfied customers in the form of service charges or tips
(gratuities).
Both methods work smoothly, provided that scales are easy to understand and the
methods of measuring completed work are overt, accurate and fair. However, there has
been considerable dissatisfaction with the management of pay on both sides of the
employment relationship. In recent years, attempts have been made to remedy the
situation through new systems and a greater reliance on performance-related pay.
Reward Management System in Bank ALFALAH LIMITED
Reward Management:
Reward Management elaborates how people are rewarded in accordance with

their value to an organization. It is concerned with both financial and non-financial
rewards. A reward system of an organization consist of integrated policies, processes and
practices for rewarding its employees in accordance with contribution, skill and
competence and their market worth.
In Bank Alfalah the elements of reward management system are consists of

Basic Pay: the fixed salary or wage which constitutes the rates for the job. This rate is
varied in a skill based or competence based system according to the individual’s skill or
competence. The rates are fixed by managerial judgment of what is required to recruit
and retain the employee.
In Bank Alfalah there is no any concept of individual performance related pay

except to the Business Development Officer. Business Development Officers are those
who are hired at contractual basis. They are assigned different targets. If they exceed to
the targets they can enjoy the individual performance related pay otherwise they are fied.
There is no concept of bonuses, commission or over time related pay. The official
timing of bank is 09.00 AM to 06.00 PM but almost all of the employees have to work
till near 08.00 PM. However, for this additional work they are not getting any additional
bonuses / over time.
SALARY, ALLOWANCES AND BENEFITS FOR
PAKISTAN BASED STAFF
Staff monthly salary is disbursed before the end of each month. Salary and allowances of
each employee is a confidential matter.
Advance against Salary:
Employee in need of funds for an emergency may be allowed advance against salary for
the current month to be adjusted in full on disbursement of salary it is only in case of
emergency.
Accommodation:
As the discretion of bank's management, furnished or unfurnished accommodation up to

reasonable value may be provided to senior officers. Other staff members when
transferred out of city given additional allowances.
Furniture Facility:
It is given to confirmed range of officers which can't be disclosed, but they should have
minimum two years of experience.
Fuel Allowance:
At the discretion of the management, officers posted in business units like BDO, car
finance, home finance etc. are given fuel up to certain liters.
Mobile Phone Facility:
Officers having their functional requirements are given mobile phone facility up to
certain limit subject to their own mobile phone.
Title Allowance:
Branch managers, product heads, asset executive in charge, area managers are given title
allowances till such time they hold these positions.
Bank Car Facility:
This facility is given to some executives who can't be disclosed.
Profit Bonus/Special Cash Prize:
Profit bonus will be paid to employees based on respective bonus circular and special
cash may be paid on outstanding performance.
Provident Fund:
All permanent employees are eligible for membership of this fund. Contribution is 8.33%
of monthly salary.
Cash Awards on Passing Institute Of Bankers Diploma Exams;
There 3 stages of IBP diploma exams and for each stage there rewards based on
completing in 21st attempt, 2nd attempt and 3rd attempt.
Suggestions:
• They should increase the non financial benefits to increase the employee
commitment and retention, because at this time their major problem is increasing
employee turnover which can be solved by changing reward structure.
• Employees should be given performance related pay which will enhance their
motivation and morale.
• Provide fair and equitable compensation to each employee and to ensure that the
value of each job relative to all other jobs within the Company is established and
maintained on a fair and equitable basis.
• Provide annual performance appraisal for employees to improve their job
performance and to encourage them to aspire for promotions to jobs with greater
responsibilities i.e. fairly compensate employees based on individual
accomplishments and annual performance appraisals
• Ensure that salaries are competitive and in line with salary levels that prevail in
the industry.

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Reward Management:

The reward or compensation people receive for their contribution to an organization

Reward Management elaborates how people are rewarded in accordance with

In Bank Alfalah the elements of reward management system are consists of

In Bank Alfalah there is no any concept of individual performance related pay

Advance against Salary:

As the discretion of bank's management, furnished or unfurnished accommodation up to

Mobile Phone Facility:

Bank Car Facility:

This facility is given to some executives who can't be disclosed.

Profit Bonus/Special Cash Prize:

Cash Awards on Passing Institute Of Bankers Diploma Exams;

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