Reward Systems : To set up goals, appraise and reward employees in large companies

Abstract: Background and purpose: Aspects such as the character of the organization and the composition of the work force have an impact on the company’s choice of how to reward and evaluate the employee. In large companies with employees from different professions and at different levels problems connected with the evaluation and the compensation of the employee may arise. The purpose of this thesis is to examine how this type of companies evaluate and reward the employees. Further we will look into the problems that may arise connected to the evaluation and the compensation of the employee. Results: In the process of evaluation the greatest difference between the employees from different professions and operations can be found in the goals that are set and the measures that measure the fulfilment of the goals. In regard to the evaluation of employees at different levels the greatest differencecan be found in the character of the measures. When rewarding employees companies tend to have a homogeneous policy for employees from all operations and professions. The difference is greater between employees at different levels. As the number of operations and levels of the company increases it gets harder to set goals that are relevant to each operation and individual as an increasing number of aspects related to these operations must be considered. In addition it is difficult to design rewards which are cost efficient and valued by all employees. These difficulties arise as individuals’ preferences are affected by their working environment and as different preferences are created in different operations and at different levels.