Reward Practices Used In The Organization


Background of the study

Employees are assets of the organization, it is necessary that they retain in the firm for longer duration. In the globalized era people are getting high employment opportunities and they can move to other brands easily. To enhance retention rate of workers it is essential for the entities to motivate its workers so that they stay in the corporation for longer period. Rewards system is the best way that can help in encouraging people and enhancing their level of performance. Human resource managers of the companies provides incentives, performance appraisal, promotional opportunities etc, so that skilled person work in the organization for longer period. Present report is based on the case study of Lincoln Electric. It will discuss the reward practices used in cited firm and alternative practices that can help in managing employee's performance in the entity.

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“To analyses reward practices used in the organization and their implication for the management of employee; Study of Lincoln Electric company”.


To understand the conceptual framework of reward system.
To identify the implications of reward practices for management of employees of Lincoln Electric.
To analyses the rewards practices used by the Lincoln Electric and alternative practices that can be used to manage employee performance.
To suggest ways for improving current rewards and performance of Lincoln Electric company.


Rewards practices are the best way of enhancing employees performance. With the help of this study Lincoln Electric will be able to gain information about alternative strategies or practices that can support in improving performance of its workers. That would help in making effective strategies so that people perform their duties well and company becomes able to accomplish their goal significantly.


1. Rewards practices used at Lincoln Electric Company

In current working situation reward and recognition is plays a essential role in an organisation. Reward and recognition is based on performance management where effective reward practices helps in attracting result driven by the professionals. Rewards and recognition is created a render impact on the performance level of the cited organisation or individual performance. In an organisation effective rewards practices aid to increasing their performance level and working efficiency. In mentioned organisation provide monitory rewards practices will be applied. In an organisation their are various monitory rearward practices which would be affected the whole organisation performance. Whereas, monitory rewards practices like company provide some incentives, compensation towards there work performance and on their perk benefits which are given by the mentioned company. ( Sousa, & Luís, (2013).

Individual Incentive Plans

In their organisation management provide individual incentive plans for their according to performance. In an any organisation distributing rewards system is based on only performance. Individual incentive plan are made for making organisation effective and aid to generating higher performance of each and individual .

Annual bonus

This is one the reward practices which is given by the said company in per annum. In this reward practices company review over all performance level on the year basis. Where company set their performance management according to their working practices. Which would be done by the individual employees. Annual bonus is add on in salary which would be given by the end of month. ( Kang, & Shen, (2015).

Competency based

In this reward practices company mention performance level as according to their based on competency. In this reward system company identify who has a best and unique competency rather than other ones. So in that situation said company distribute reward for acceding to their his competency based which would be create great impact on the whole organisation performance. It will help to increasing organisation working efficiency and individual performance.

Profit sharing

In this reward system company provide such amount for regarding profit sharing. Here a part of profit is distributed in between concerning employees who gave effort for making them. It is based on only situation based where in that case there is no profit is there so in that situation company does not distribute any king of profit sharing amount.

Team based pay

this reward system is based on team based efficiency. In this reward system team performance s get to achieve high reward and compensations. Which would be in term of monitory. Where it help to increasing individual moral and encouragement. ( Rafiq, Sarwar, & Naqvi, (2016).

Pay for quality

This reward system is based on individual quality performance, whereas in an organisation pone who individual who did work with some high quality and effectively who will get pay of quality reward. In that situation this reward practices is based on individual quality performance where individual get monitory benefits from the behalf of his quality. In this situation high efficiency of working quality is render impact on the whole organisation. Where it laid to help in generating high performance level of the said organisation . ( Chomal,& Baruah, (2014).

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Lincoln Electric employs compensated piece-work system that is closely interrelated with the employee performance (Khan and, 2013). It impacts positively on the workers and they feel motivated thus, they like the workplace environment. By this way they put their best efforts and utilize their skills well. It assists in improving performance efficiency of workforce. Lincoln Electric review the performance of its workers time to time and on the bases of this, cited firm provides bonuses and cash benefits to its employees. That makes them loyal and they put their best efforts for the well fare of company. Sometimes this reward practice impact negative on other persons because favoritism take place and people think that company do not notice good performers, it just gives benefits to their favorite persons. By this way people start feeling demotivated and they become negative towards the organization (ErastusYamoah, 2013). That impacts on their performance and level of efficiency of those employees get down. Profit sharing practice of company is very effective that enhance satisfaction level of workers, due to this policy maximum people are very satisfied with the company and they are working since long time in the Lincoln Electric. Satisfied workers perform their duties well and t hey contribute well in accomplishing goal of the cited firm.

2. Alternative rewards practices

In order to make effective functions and operations, there are other reward practices which can be used by Lincoln Electric Company. In this aspect, the company enable to motivate their employee to accomplish targets and goals (Wang, Poirier and Sarazin, 2014). These also assist to satisfy immediate necessities of men such as food, clothing and shelter. These are essential needs of a person which found in higher level. They are as follows:


This is mandatory element which need to be taken at workplace. In this aspect, workers require make immediate feel limited (Shu, Zhang and Chen, 2014). In this aspect, all employees are voice out their opinion and ideas to make versatile on their approaches to solve conflicts and problems within Lincoln Electric Company. In addition to this, the company can also emphasize on flexibility in term of working hours. In respect to able towards the work, employee need to concentrate on their own pace which will permit take care of their obligations.


Recognition is coming from different resources. It is responsibilities of manager to give proper recognition to each employee so that they are able to demonstrate various benefits and outcomes at workplace. It is also right for the manager to give away praises. In Lincoln Electric Company, it can be come in informal appreciation for all those people who possess excellent expectations (Keutel, Michalik and Richter, 2014).


When Lincoln Electric Company train their people, it means they are rowing preciously. They are also faced problems as bigger challenges. Training is also gives good types of feeling, ideas and motivation to push employee towards the goals and objectives at workplace. This is because, it possesses effective skills and knowledge to work at workplace.


Sickness is the major problem of absenteeism within the organisation. It makes conflicts and politics within Lincoln Electric Company. Thus, they are hate to coming towards the company. Most employees are understands to manage relationship with various people at workplace (Okumura and Araujo, 2014). In respect to this, team is simply made strengthen trust, respect and accountability with each other. Thus, they are able to make feeling of friendship with each other at workplace of the chosen firm. Beside this, employee of the company also take team building activities which also assist to maintain belongingness with various people.

Chance to contribute

Employee can also greatly motivates through making feel success within the business environment (Shu, Zhang and Chen, 2014). This is because positive outcomes of Lincoln Electric Company is depends on workers only. In addition to this, it also allows head projects as well as getting consensus for major decision-making. It can be affect to the business and their performance to deal with various outcomes. As results, goals can be made to deal with different elements.

Fringe benefits

Fringe benefits are given with including allowances, leaves, plans for health insurance and many other perks which assist to make effective results and performances. With the help of perks, the company can encourages to their employee for take part in objectives and goals (Wang, Poirier and Sarazin, 2014). With the help of these activities, they are feeling love to determines effective results and performance at workplace of Lincoln Electric Company.

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It can be inferred from the study that employees of company are satisfied from the manner in which they are being treated and have thus, shown traits of being motivated as well as engaged in the work being carried out. It has been ascertained that there is a mutual understanding which has been developed between the employees and the management. On the basis of same there is a practice of developing a shared objective, in pursuance to which the work is carried out with a strategic approach. The reward system of the company is completely monetary in nature, and the pay has been made dependent on the performance of each of the worker. However, the growth has reached a stagnant position which requires the company to develop a new system of rewards which shall generate additional benefits. It could be understood from the analysis that there is a scope which the management can explore to further motivate the employees and enhance their performance. Another concern which could be identified is that there does not exist any Union in the company for representing the employees before the management. This shall also prove to be a detriment for the employees in the situation of conflict. Hence, it can be concluded that the company needs to develop a new reward systems which be operated in consonance to the existing system.


On the basis of findings realized on analysis of the reward system being followed at Lincoln Electric Company, it is highly recommended that the following practices be adopted for increasing the overall motivation level among the employees:

The working hours required to be served by individual employees shall be made flexible. This shall enable the employees to attain a work life balance, by being able to fulfil their personal responsibilities along with professional duties. Moreover, this shall also enable the employees to have freedom to finish to achieve their targets as per their own convenience.

The management can initiate a practice of informally appreciating the work of all the performers either through an email or in a ceremony on a monthly basis. Even if this practice is not attached with any form of monetary reward the employees shall be motivated to invest additional efforts for gaining a word of appreciation (Shu, Zhang & Chen, 2014).

The management shall give opportunities to the employee to contribute in the success of organization, in the manner they are having share in the profits. This could be done by encouraging suggestions and opinion of employees on related matters. Moreover in the event of successful implementation of the suggestions, the respective employee shall be applauded for his work. This shall assure creativity and innovation on individual basis.


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  • Wang, L., Poirier, V. & Sarazin, Y., (2014). Kinetic Analysis of the Immortal Ring-Opening Polymerization of Cyclic Esters: A Case Study with Tin (II) Catalysts. Macromolecules.
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