CAIIB ABM Unit 23 - Employees' Feedback and Reward System

CAIIB ABM Unit 23 - Employees' Feedback and Reward System (Year: 2019)

Feedback Through Climate Surveys

Organizations used to measuring employees' perceptions of the prevailing climate in an organization are called climate surveys. The coverage of a typical survey can be as follows:

1. Structure: The feeling that employees have about the constraints on the groups, rules, regulations, procedures, communications channels (layers in decision making), delegation and authority, etc.
2. Responsibility: The feeling of being your own boss, clarity of role and responsibility vis-a-vis superior, subordinates and peers, etc.
3. Reward: The feeling of being rewarded for a job done well, perception about reward and punishment system, perception about pay and promotion, etc.
4. Risk: The sense of riskiness and challenge in the job and in the organization, and any emphasis on taking calculated risk (risk taking is encouraged and bona fide errors are protected) or playing safe is encouraged and accepted.
5. Warmth: The general feeling of fellowship that prevails in the workgroup atmosphere, the prevalence of informal supporting culture and social groups.
6. Support: The perception about helpfulness of managers and other employees in the group, emphasis on mutual support from above and below in the heirarchy.
7. Standards: The perceived importance of implicit and explicit goals and performance standards, the emphasis on doing a good job, the challenge represented in personal and group goals.
8. Conflict: The feeling that the managers and other workers want to hear different opinions, the process of conflict resolution, opportunity to express the views, etc.
9. Identity: The feeling of belonging to the organization and perceived value in the organization and work group, etc.


The wages in the form of compensation is viewed as the main attraction to join or change a job. The compensation should not be so meager that employees do not feel motivated to put in their best. the compensation should be such that it continually attracts talent, it is a major source of retention of the existing manpower and has an edge which motivates them to give their best.

Types of Compensations

Compensation is expressed in terms of money. It would thus include: wages or salary, bonus, cash allowances and benefits such as accident, health insurance cover, employer's contribution to the retirement funds, provision of accommodation, etc. The jobs are broadly classified in four groups and the compensation for them is commonly referred to as shown below:

1. Managerial (top, middle, junior) ... remuneration
2. Supervisory ... salary
3. Clerical or Administrative ... salary
4. Unskilled, semi-skilled, skilled and highly skilled ... wages

Compensation Base

Compensation policy is an important element in personnel management. What is the basis or factors on which compensation gets decided? It could be:

1. Company objectives
2. Market situation or prevailing market rate
3. Internal and external pressures.

A good compensation package should cover factors like adequacy, societal considerations, supply and demand position, fairness, equal pay for equal work and job evaluation.

The administration is bound to protect the workforce from irrationally low wages. Taking this as the prime objective the Indian Government has enacted:

1. The Payment of Wages Act, 1936,
2. The Minimum Wages Act, 1948
3. The Payment of Bonus Act, 1965, and
4. The Equal Remuneration Act, 1976.