Reward Management


In today's era of globalisation and hyper competition, each and every organisation is developing strategic measures in order to maintain winning edge in the tough trading business environment. With this context, reward management is given a crucial importance to gain the leading heights of success in an impressive manner (Agwu, 2013). It is considered as one of the most important motivational technique which benefits the employees to boost up their level of morale and commitment towards organisation's success. It reflects giving attractive monetary and non monetary incentives to the overall workforce to gain employee job satisfaction and enjoyment in a significant way. With this context, the present report highlights the essential aspects of reward management and the crucial HR practices adopted by Tesco to enhance its performance and productivity in the corporate global environment.

HRM practices and its significance for the business

It is a growing and mandatory phenomenon to implement appropriate and exotic HR practices. Doing this enables the corporation to maintain coordination and cooperation within its overall workplace thereby avoiding disputes and conflicts. This assist the company in gaining significant increment in its total productivity and profit margin.

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With regard to the present case scenario, the crucial HR practices adopted by Tesco are listed below :-

Recruitment and selection process (R&S)

The HR managers of the company lays a significant concern over implementing a systematic and ethical R&S process in a significant way. They emphasizes on planning an appropriate recruitment plan which attracts the eligible and potential candidates effectively. Furthermore, for the selection process, the management of the company focuses to conduct a systematic procedure in the following manner:-

  • Conducting preliminary interview to short list the eligible candidates on the ground of their age and educational qualification (Ajila and Abiola, 2014).
  • Preparing a series for written exams to evaluate the short listed candidates on the basis of their logical and analytical skills.
  • Conducting final round of personal interview to select the prospective applicant on the basis of his\her attitude towards the organisation's performance.
  • Conducting such R&S process enables Tesco to select the right applicant for the right job designation.

Implementing fascinating motivational practices

In order to gain the highest level of employee job satisfaction, the concerned organisation lays its significant concern over implementing attractive motivational techniques. Considering this fact, the company seeks to apply strategic human resource practices where it emphasises on treating the employees of its organisation as the core asset for the company rather than cost. Also, it focuses to provide various monetary and non monetary incentives to boost up the morale and commitment level of its employees towards company's goal (Aktar, Sachu and Ali, 2012).

Providing appropriate training programmes

The HR department of Tesco focuses to provide its workforce with knowledgable and effective training sessions. Doing this helps the employees to improve and enhance their knowledge, skills and competencies impressively. It also benefits the organisation to increase its overall production and performance level in the hyper competitive world.

Significance of HRM in Tesco

  • Helps the company to maintain winning and competitive edge in the international economies.
  • Allows it to beat the tough line of its core competitors in a significant way.
  • Helps to build exotic strategic alliance to gain global exposure effectively. Boost the commitment and morale of its key employees.

Introducing reward management and its significance

It is a well known fact that human resources are valuable element for the business enterprises. They are responsible to plan, organise, manage and execute various policies framed to attain organisational objectives of TESCO. Companies whether are small and large are interested to hire skilled and efficient manpower to increase their profitability. The performance of an organisation and customer loyalty mostly depends upon its human resources (Armstrong, Brown and Reilly, 2011).

After recruiting qualified professionals next responsibility of organisation is to motivate and retain them. Therefore, modern world business entities like TESCO adopt reward management system. It is concerned with formulation and implementation of strategies that aim to reward employees fairly and equitably. This can be recognised as motivational practices to praise subordinates for their achievement and efforts for concerned business enterprise. TESCO sets goals and establishes rules for its employees to follow to achieve those objectives. As the employees are aware about set standards they perform accordingly and in return they acquire rewards for high performance.

In contemporary world, human resource management has become complex and rigid in nature. Corporation like TESCO needs to undertake various measures to encourage human resources to perform tasks with dedication (Armstrong, 2013). Skilled managers and employees are essential to acquire desired outcomes for the company. Therefore, reward management policy plays crucial role in following manner:

Firstly, it motivates employees to make better use of their skills and abilities in favour of TESCO. They are encouraged to use both conventional and innovative techniques to perform assigned task.
Reward system helps to retain skilled and qualified professionals in the organisation. The employees are able to strengthen performance and productivity of cited company in target market.
Moreover, effective reward management policies attracts new candidates to enter into TESCO premises. It also avoids cost of hiring and training new employees for the concerned corporation.
In addition, it builds loyalty and honesty among managers or employees towards the organisation so that it attains greater benefits (Baer, Oldham and Cummings, 2013).

Analysing role of reward management in modern business growth

Reward management is a significant and most crucial aspect for modern business growth and development. Companies are adopting different strategies for enhancing employee performance in the business aspect. Tesco has adopted well defined means of human resource practice which has helped the company in enhancing the motivation of the employees and developing effective impact on business success as well (Dodd, 2015). Application of theoretical model will effectively help in analysing the impact of theories in actual business practice. Tesco has effectively adopted the concept of soft HRM in actual business practice to attain high and effective growth in the market.

The Harvard model of HRM is one of the most effective means of measure adopted by the companies for enhancing business options by involving employees in the internal business operations. According to the selected study employees are the significant asset of the organization and adopting effective strategies for their enhancement helps in attaining high productivity and output in terms of revenue, brand recognition and employee retention as well. According to the stated model significant aspects of the HR practices involves:

Situational factors

Tesco has adopted effective and well defined means to analyse and understand the situational factors for the business. The company effectively analyse the business objectives, philosophies, legal aspects and management strategies to analyse and understanding the needs of employees and develop strategies for the same. Factors associated with social aspects, leadership needs, working conditions, market competition etc are also considered in this segemnt for understanding the needs and demands of the business (Gungor, 2011).

Stakeholders interest

Analysing the needs and demands of stakeholders is also a significance aspect for the business growth. Tesco closely understanding the needs and demands of its stakeholders especially employees for attaining high and well developed business results. Moreover, it helps in strengthening the internal business position of the company as well. Reward management of the company is established and starts to develop at this stage of the process.

HR policy

Companies then focuses on developing HR policies and strategies as an integrated result of situational analysis and stakeholders interest for the business. Policies related to employee influence, working system, reward Management etc. are developed at this stage of the business operations. This help companies in effectively defining the business strategies and drafting policies for employee enhancement and development in the organization. According to Kahn, Farooq and Ullah (2010) reward system I closely designed and developed at this stage of the process and impact of the same in effectively analysed on HR outcomes for the business. At this stage of business operations Tesco focuses on developing and communicating HR policies to employees for developing high impact on employee performance.

HR outcomes

The HR outcomes are defined by analysing the employee commitment and contribution in the organizational success. According to Karami, Dolatabadi and Rajeepour (2013) at this stage of business companies analyses the results of the overall business operations through factors such as employee retention, cost effectiveness. Profitability etc. Reward system of the business is a crucial aspect which helps in defining HR outcomes for the company. The company focuses on effective designing of reward management which helps the business unit in creating favourable business results. Analysing effective means of rewards is a crucial aspect for the same. Pratheepkanth (2011) analysed that unsatisfactory HR outcomes are often associated with reward managemnt policy of the business as it helps in developing a base for employee motivation and productivity in the business.

Long term consequences

The overall impact of the overall process on the business results in helping business to attain favourable business results. High profitability, employee satisfaction, brand recognition etc. are the results of the same. According to Saeed, Nayyab and Lodhi (2013) every business unit in the current competitive scenario focus on developing an effective and well developed market position in the economy. A well developed reward management system has a positive impact on employee motivation and retention as well which results in providing positive business results for the organization.

Strategies of reward management

TESCO uses different reward management strategies in order to motivate and retain skilled professionals in the organisation. These can be classified as intrinsic motivation and extrinsic motivation policies. The strategies are specified in favour of TESCO as follows:

Intrinsic reward strategies

It is a framework that tends to satisfy personal satisfaction level of a professional whether it be manager or employee. This includes following factors to encourage human resources of the company:

Recognition:- According to this strategy, employees are recognised by their respective mangers in form of letter of appreciation, reward, certificate, momentum or oral appreciation. It satisfies need urge for the professional to make efforts for improvement and execute tasks effectively. Even pat on the back is effective to boost morale of an employee as it provides self-esteem and happiness to them (Yapa, 2012).

Trust and empowerment:- TESCO need to empower its employees by providing authority to take some essential decisions on their basis. It develops trust among individuals to plan and execute effective strategies in favour of concerned business entity. It forms reliance among company and manpower to work together for development of cited business organization.

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Extrinsic reward

It reflects the physical and monetary way of rewarding an employee within an organisational structure. Tesco makes use of the following reward systems to gain employee satisfaction in an effective way

Bonuses:- It is the most exotic reward system which tends to increase the level of motivation, trust and confidence within its employees in a significant way. Tesco provides its employees with such a reward on the basis of the individual's performance within the organisational structure. However, such a reward system may result in creating inferior complexity among other employees which may cause disputes and conflicts within the workplace. It is upon the standard care of Tesco to provide attractive bonuses to the employees on the grounds of their performance. For this the company should develop the system of score card and should give scores to individual performance of the employee on a daily basis. Doing this would result in creating non-biased decision which will avoid the root cause of disputes within the company (Agwu, 2013).

Salary and remuneration:- These are the basic needs of the employees which helps in developing their significance in the business. Reward management process of the company helps business units in determining the skills and efficiency of the employees and developing effective salaries and remuneration accordingly. This is a basic consideration which business units provide organizational employees against the services they provide. Salary increment is one of the most common strategy used by business units for enhancing employee motivation and effectiveness as well.


On the basis of above report is can be clearly analysed that reward management is one of the crucial and most significant aspect of business operations. It help companies in creating a well developed impact on the growth and development of business operations while maintaining an effective brand image in the market. Different strategies and methods are implemented by the companies for enhancing reward management strategy in the business.


  • Agwu, M. O., 2013. Impact of Fair Reward System on Employees Job Performance in Nigerian Agip Oil Company Limited Port-Harcourt. British Journal of Education, Society & Behavioral Science. 3(1). Pp. 47-64.
  • Ajila, C. and Abiola A., 2014. Influence of rewards on work performance in an organization. Journal of Social Science. 8(1). pp. 7-12.
  • Aktar, S., Sachu, M. M. and Ali, M. E., 2012. The impact of rewards on employee performance in commercial banks in Bangladesh: An empirical study. IOSR Journal of Business and Management. 6(2). pp. 9-15,
  • Armstrong, Brown and Reilly, 2011. Increasing the effectiveness of reward management: an incentive based approach. Human Relations. 33(1). pp. 106-120.
  • Armstrong, M., 2003. Employee Reward. 3rd ed. CIPD
  • Baer, M., Oldham, G. R. and Cummings, A., 2013. Rewarding Creativity: When does it Really Matter?. The Leadership Quarterly.14. pp. 569-586.
  • Dodd, G., 2005. Canadian employees moving towards total rewards approach to Compensation. [Online]. Available through: <htttp://>. [Accessed on 5th May 2016].
  • Gungor, P., 2011. The Relationship between Reward Management System and Employee Performance with the Mediating Role of Motivation: A Quantitative Study on Global Banks . Procedia Social and Behavioral Sciences. 24. pp.1510-1520.
  • Kahn, K. U., Farooq, S. U. And Ullah, M, I,. 2010. The Relationship between Rewards and Employee Motivation in Commercial Banks of Pakistan. Research Journal of International Studies. 14. pp 37-54.
  • Karami, A., Dolatabadi, R. H. and Rajeepour, S., 2013. Analyzing the Effectiveness of Reward Management System on Employee Performance through the Mediating Role of Employee Motivation Case Study: Isfahan Regional Electric Company. International Journal of Academic Research in Business and Social Science. 3 (9). pp. 327-338.
  • Pratheepkanth, P., 2011. Reward System And Its Impact On Employee Motivation In Commercial Bank Of Sri Lanka Plc, In Jaffna District. Global Journal of Management and Business Research. 11(4).
  • Saeed, R., Nayyab, H. H. and Lodhi, N. R., 2013. An Empirical Investigation of Rewards and Employee Performance: A Case Study of Technical Education Authority of Pakistan. Middle-East Journal of Scientific Research. 18(7). pp. 892-898.
  • Yapa, S., 2002. An examination of the relationship among job satisfaction, rewards and organizational commitment. Journal of the management science. 1(1)/. pp. 46-66.
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